Kaunas Free Economic Zone
Encyclopedia
The Kaunas Free Economic Zone (FEZ) is a free economic zone
Free economic zone
Many countries have, or have had at some time, designated areas where companies are taxed very lightly or not at all to encourage development or for some other reason...

 near Kaunas
Kaunas
Kaunas is the second-largest city in Lithuania and has historically been a leading centre of Lithuanian economic, academic, and cultural life. Kaunas was the biggest city and the center of a powiat in Trakai Voivodeship of the Grand Duchy of Lithuania since 1413. During Russian Empire occupation...

, Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...

. It is a 534 hectare industrial development area which offers favorable and smaller taxes for the investors that invest at least 1 million euros. The investors are mostly foreign companies, as more than 70% of total investments in Kaunas FEZ are Foreign Direct Investments (FDI).

The Kaunas Free Economic zone was established on 22nd October, 1996 in Kaunas district, near the motorways A6 and A1.

Areas

Area of Kaunas FEZ has three parts: Production and Logistics Area, Business Street and Airpark.

The Productions and Logistics Area is the largest territory of Kaunas FEZ parts. Investments for the green field take the biggest part of this territory.

The Production and Logistics area is used by logistics terminals, pharmaceutical company, foam Production Company with Finnish origins and high technology industry Automation Company.

The Business Street is a part dedicated for future business centres within the Kaunas FEZ at Road A6. It is planned to build 13 different land plots for offices and hotels. Most of these land plots have detailed plans and modern infrastructure. This territory is going to have the easy access, well-situated parking system and well-developed office premises.

The third and the last part of Kaunas FEZ is The Airpark. The territory has nearly 3-kilometer-long border with the territory of Kaunas Airport
Kaunas Airport
Kaunas International Airport , which serves Kaunas, Lithuania is the second busiest civil airport in Lithuania after Vilnius airport and the fourth busiest in the Baltic states. Kaunas Airport is the fastest growing airport in the Baltic states in 2009 and 2010...

 enabling direct access to aircrafts and eliminating custom clearance procedures. The Airpark territory has three different road types inside: air, car and railway roads. Airline depots, various aviation industries such as testing, sales and aircraft assembly or aircraft service companies can easily establish themselves inside the FEZ and use runway, tax incentives or other offered privileges.

Tax incentives

Tax General In LEZ
Corporation tax  15 % 0 % (first 6 years) 7,5 % (following 10 years)
Property tax 1 % 0 %
Dividends
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

tax (for foreign investors
15 % 0 %
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