Vilnius, the capital of Lithuania, is topping far more established innovation hotbeds when it comes to tech startups and greenfield Foreign Direct Investment (FDI) projects, on a per capita basis. According to the Financial Times’ fDi Intelligence division, Vilnius beat out Tel Aviv, Singapore and Berlin. London came in second. If you are curious, San Francisco ranked only 13th trailing both Berlin and Paris.
Invest Lithuania explains that the Tech Start-up FDI Attraction Index 2019 measures at the city level the number of greenfield FDI projects made in the software and IT services sector per 100,000 inhabitants. While London attracted the largest overall number of projects, it scored only 0.875 on a per-capita basis while Vilnius registered higher at 1.006.
The ranking included 997 greenfield investments made between 2016 and 2018 by 674 tech start-up companies across 231 cities.
According to fDi Intelligence, Vilnius’ business-friendly regulatory environment of the city, its open data policy and successful integration of newcomers most contributed to the leadership of Vilnius in the ranking.
In Vilnius, it takes just a single day to start a business using an e-signature.
Invest Lithuania adds that most of the municipal data is public and free to use. This is important for tech startups as their products may be tested with real market data. It also helps that Lithuania has the 3rd lowest income tax in the CEE region.
Currently, there are said to be 21,000 employees in the ICT sector in the Vilnius region and over 6 thousand in R&D. According to Invest Lithuania, 85% of young professionals in Vilnius speak English and the city is one of the youngest European capitals with more than 50% of residents younger than 40 years old.
Vilnius also works hard to welcome expatriates by providing relocation support.
“Vilnius is a compact, yet cosmopolitan city, which makes creating meaningful connections much easier. Apart from the favorable business environment, you also get high-quality soft-landing services and easy integration as a newcomer. It really is like a city-sized sandbox for tech startups,” says mayor of the city, Remigijus Šimašius.
There are some big-name companies with a footprint in Lithuania like Revolut, Transfergo and de Vere Group.
Earlier this year, fDi Intelligence ranked Vilnius among the top 10 Fintech locations of the future based on FDI performance, next to New York and Edinburgh. The same study Vilnius also ranked as the second-best cost-effective Fintech destination.
Lithuania provides a streamlined licensing and authorisation process for qualified Fintechs. Invest Lithuania says that the legal environment and risk management measures have been improved during 2019 making Vilnius one of the most trusted Fintech destinations.