Klaipėda Free Economic Zone

Klaipeda Free Economic Zone or Klaipeda FEZ (Lithuanian: Klaipėdos laisvoji ekonominė zona) is the first and most successful free economic zone in the Baltics, as well as the largest tax free zone in Lithuania. It was established in 1996, officially launched in 2002, and is currently managed by the Klaipeda Free Economic Zone Management Company.

Klaipeda Free Economic Zone
TypeUAB
IndustryTax free zone. Industry focus: plastics & chemicals, offshore & large metal structures, electric vehicles & components, food processing, value added logistics and others.
Founded2002, Lithuania
HeadquartersPramones st. 8, LT-94102, Klaipeda, Lithuania
Revenue€1,2bn (2018)
Number of employees
more than 5,400 employees work at FEZ
Websitewww.fez.lt

Klaipeda FEZ consists of 492ha of land dedicated to manufacturing plants, logistics, and business park development. In 2017, Klaipeda FEZ became the first and only free economic zone to receive the Quick Launch Award from fDi Intelligence. It is also internationally recognized for its specialism within the plastics industry, contribution to the national economy, energy efficiency, as well as the rapid on site expansion experienced by its investors. Klaipeda FEZ is located in Klaipeda (Lithuania), at the heart of Europe, and offers easy access to markets in the EU, Scandinavia, and former CIS countries (Ukraine, Belarus and Russia especially) via an extensive rail, road, AIRPORT and sea network. Klaipeda FEZ plays a key role in the regional and national economy, creating value amounting to 4-6.5% of Lithuania’s annual GDP. It has a strong track record for providing extra care and service to multinational clients such as Yazaki, Indorama Ventures, Albright and others. As of AUGUST 2019, Klaipeda FEZ encompassed 104 investors from 19 countries with a total yearly revenue of 1,9bn Euros, and total exports accounting for 1.2bn Euros. There are more than 100 companies operating within the area of Klaipeda FEZ with more than 5400 employees. 7,3% of Klaipeda's working population work within Klaipeda FEZ.


History
Tax incentives
Tax
Corporation tax0% (first 10 years)
7.5% (following 6 years)
Real estate tax0%

The first steps for the establishment of the zone were undertaken in 1996. In 1997, a management company was selected after reviewing five proposals.[1] The Klaipeda FEZ is managed by Klaipėdos LEZ Valdymo Bendrovė,[KFEZ] a private limited liability company. The Baltic Fund, an investment fund, financed by the Rockefeller and Company, Lazard, and investors from Saudi Arabia,[2] owned about 60% of the management company. The remaining shares are owned by city enterprises, municipality and the government of the Lithuanian Republic.[3] Since 2001 the Rockefeller Foundation sold their shares to Pierre J. Everaert Family Trust based in Demarest New Jersey, thereby becoming the largest private shareholder of the KFEZ

[Pennenox, Philadelphia USA - story eliminated as irrelevant to the development of the |KFEZ] Another set of obstacles was raised during Lithuania's negotiations for accession to the European Union.[4] Klaipeda FEZ began its activities in December 2001.[5] In 2003, Thailand-based Indorama announced investment of 80M euros into plastic production factory.[6] To further attract investors to FEZ, Lithuanian-based companies were allowed to participate since 2004.[7] A year later, the FEZ began plans for expansion and further development of its land, requesting assistance from structural funds of the European Union.[8] By the end of 2007, FEZ attracted some 600M litas (174M euros) of investments.[9] By the end of 2017, the total accumulated foreign direct investment in Klaipeda FEZ accounted for 634M euros.

Currently, more than 5400 employees work at FEZ investor and supporting companies, which is 7,3% of Klaipeda's talent pool.

Location

Klaipeda FEZ is located in the south-eastern part of the city of Klaipėda, near the main transport Klaipeda-Vilnius highway. The distance to the Port of Klaipeda is 8 km, while to Klaipeda-Palanga International Airport it is 35 km, to Kaunas Airport it is 218 km, and to Vilnius Airport it is 304 km.

Operations within FEZ

Klaipeda FEZ community currently connects over 5400 employees working in more than 100 industrial businesses focused in the Plastics & PET, food processing, offshore & large metal structures, electric vehicles & components, value added logistics and other industries.

Klaipeda FEZ has signed agreements with 30+ foreign and Lithuanian companies. In total, 17 countries are represented. Since the start of their operation, these companies have invested more than 634M EUR in Klaipeda FEZ.The total investment (2019) is approx. 2bn Euros.

In total, the companies based in Klaipeda FEZ account to 2,7% of national exports in 2017 and nearly 60% of Klaipeda’s foreign direct investment is accumulated at the Klaipeda FEZ.

Klaipeda FEZ is a recognised economic project of national significance.[10]

Companies

Major companies operating within Klaipeda FEZ:

  • Yazaki Wiring Technologies
  • Indorama Ventures
  • Neo Group
  • Glassbel Baltic
  • Espersen
  • Vesvela
  • Fortum Klaipėda
  • Mestilla
  • Retal Baltic
  • Ani Plast
  • Albright Lithuania
  • BNTP
  • HeidelbergCement Group
  • Vingės Logistika
  • BMG Logistika
  • AD REM LEZ
  • AD REM PORT
  • Pack Klaipėda
  • Lavango Group
  • Skuba
  • Hugaas Construction
  • Be-Ge Baltic
  • Dancer Bus
  • Dalios Gintaras
  • Lindström
  • Focus Fabrication Group
  • Capella Baltica
  • Baltic Eukutec
  • Philip Morris International (operating outside the official Klaipeda FEZ territory)

Achievements
  • In 2017 Klaipeda FEZ was recognised (to be announced) within the categories of “Quick Launch award” (Editor’s choice), Expansion, Energy Efficiency, Specialism (for Plastics industry) and Contribution to the National economy. Investors wishing to establish operations in Lithuania’s Klaipeda FEZ can use the zone’s Fast Factory Launch scheme. The scheme offers companies ready for use sites that come complete with all the required construction permits, as well as the ability to make minor adjustments to customise the site to fit the investor’s needs. Outside of Klaipeda, construction permits in Lithuania can take up to six months. Additionally, the Flexstart programme aims to allow investors to commence operations in less than one month, with customisable pre-built manufacturing facilities. New offices are currently under construction that will be offered to SMEs as part of the programme.[11]
  • In 2015 Klaipeda FEZ was commended for local co-operation at the Global Free Economic Zones in fDi Markets by Financial Times.[12]
  • In 2010, fDi Magazine, published by the Financial Times, ranked the Klaipeda Free Economic Zone 5th place in the category Best Facilities, and also ranked it 19th overall globally within the economic zones category.[10]

General Facts & Information
  • Address – Pramones st. 8, LT-94102, Klaipeda, Lithuania.
  • Official website: www.fez.lt
  • Klaipeda FEZ is managed and administered by the Klaipeda FEZ Management Company, CEO Eimantas Kiudulas.
  • Start of operations: 2002
  • Total area: 412 ha
  • Number of operating companies: 100+, 30+ of them - manufacturing and logistics companies attracted by Klaipeda FEZ team.
  • No. of countries represented by companies: 17 (2019)
  • Jobs created: 5400+
  • Investment since start of operations to 2018: 634M Eur.
  • State investment: 6,4M Eur.
  • Revenue generated by investors in 2018: over 1,2bn Eur.
  • Export in 2018: over 610M Eur.

References
  1. Valeckas, Edgaras (1997-03-21). "Laisvoji ekonominė zona jau popieriuje" (in Lithuanian) (26). Verslo žinios: 5. Cite journal requires |journal= (help)
  2. Shadigian, Vanda (May 2000). "Corporate member profile: The Baltic Fund Today and Tomorrow". American Investor in Latvia. 11.
  3. BNS (1997-04-23). ""Siemens" pirmoji". Verslo žinios (in Lithuanian) (39): 17.
  4. Valeckas, Edgaras (2000-04-11). "Miglotos LEZ perspektyvos". Verslo žinios (in Lithuanian) (71): 7.
  5. "Klaipėdos LEZ jau statomos gamyklos". Verslo žinios (in Lithuanian) (113): 3. 2002-06-12.
  6. "Klaipėdos LEZ atkunta: atkeliauja ir Lietuvos, ir užsienio kapitalas" (in Lithuanian). Verslo žinios. 2003-12-04.
  7. BNS (2004-02-13). "Nuo pelno mokesčio - į LEZ" (in Lithuanian) (30). Verslo žinios: 7. Cite journal requires |journal= (help)
  8. Vasiliauskaitė, Gabrielė (2005-04-12). "Klaipėdos LEZ bus plečiama pramoniniu parku" (in Lithuanian) (69). Verslo žinios: 6. Cite journal requires |journal= (help)
  9. Dvarionaitė, Nijolė (2007-11-26). "Klaipėdos LEZ'ą pasaulis pastebėjo". Verslo žinios (in Lithuanian) (224): 4.
  10. "About Klaipeda FEZ". fez.lt. 2011. Retrieved 2012-11-19.
  11. "fDi Global Free Zones of the Year 2017 – the winners". 2017-10-09.
  12. "fDi Global Free Zones of the Year 2015 - the winners" (PDF). 2017-12-03.

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