About a month ago I was attending a private, invitation-only meeting with some of the finest unconventional minds in finance. We gathered for three days at a luxurious oceanside resort on the Maryland coast to have an open exchange of ideas, debate our philosophies, and play poker ’til dawn. Lobo Tigre, editor of the International Speculator and my former colleague at Casey Research, approached me with an interesting proposition on the last day.
For several years now, Lobo has been actively organizing and lecturing at foreign youth camps designed to teach libertarian ideals to English-speaking Eastern European students; his latest camp was scheduled for Lithuania, and he asked if I could attend to lecture the students on my international investment and entrepreneurial ventures.
I love speaking and teaching, and when a mutual friend told me that there would be adoring Belarusian college girls there hanging on to my every word, I couldn’t say no.
I’m reporting from the youth camp today and have had several days on the ground in Lithuania to get a sense of the place. While I have been to the Baltics before and have a lot of experience in Estonia, this is my first trip to Lithuania.
For the geographically challenged, Lithuania is one of three small former Soviet republics (including Latvia and Estonia) sandwiched in between Russia, Poland, Belarus, and Scandanavia. The official language is Lithuanian, though because of the language diversity in the region, Russian and English are widely spoken. It truly boggles the mind to wonder how the system works– five neighbors, five different languages.
For a small country of 3.5 million people devoid of significant natural resources, Lithuania has a fairly sound, developed economy. They have managed to build up an export base and attract foreign companies because of its cheap labor and close proximity to Russia.
Labor is very cheap, among the cheapest on the continent except for Romania and Bulgaria. Minimum wage is less than $3/hour, and administrative costs are negligible; this is perhaps one of the greatest benefits of Lithuania. Starting and running a business is very easy here. Labor laws are straightforward and quite reasonable, keeping unnecessary burden off the entrepreneur.
The country’s tax code is also quite reasonable. Personal income tax is taxed at a flat 15% rate, and corporate profits are taxed at a flat 20% rate. In fact, the entire tax code is only 53 pages– very simple. This is very attractive for foreign businesses and makes Lithuania an attractive destination for European entrepreneurs.
Lithuania is also one of the world’s most unknown second citizenship options; the government grants instant citizenship to some foreigners with Lithuanian ascenstors born before 1940, and it is easy to obtain one by marrying a Lithuanian… and trust me, for single men this would not be an unattractive option. Lithuania is a great passport because it is part of the European Union and provides visa-free travel to many countries around the world.
Vilnius, the capital city, is quaint and scenic. The center of town boasts a historic ‘old town’ district with trendy bars and restaurants– it’s small but very pretty. The real estate is reasonably priced, and renting can be an absolutely phenomenal deal.
A furnished, swinging one bedroom apartment in the center of old town can run as little as $500/month, and it can be leased for short periods of time (usually one month). For the short-term traveler, I stayed at the 4-star Euro-Royale Hotel in a palatial room for less than $100/night… so Vilnius is definitely worthy of consideration for anyone looking to have a great time in Europe on a limited budget.
I met with Oober Haus Real Estate advisors, the largest property agency in Lithuania– you can check out their website at www.oh.lt (in English) and contact Martynas Gudelis at +370 677 67868 for more information.
As much as I would like to find a way to invest in Lithuania, I am not investing a penny here right now… on December 31st 2009, something will happen in the country that has me running away like a scalded dog. I’m curious to see if anyone knows what it is…
More on this tomorrow.
