An Italian who wants to become a Lithuanian has mentioned how we can attract foreign investors

R. the Surety, who lives in Lithuania and runs a newly operating commercial bank in the country, initiates the interview remotely in Lithuanian.

“I am very happy living in Lithuania, I already know the Lithuanian culture and people. I can safely say that I see my future in this country and I want to become a true Lithuanian. I have long-term goals: to learn the Lithuanian language, gather the strongest team and create a competitive business, ”concludes the Italian with a smile.

The businessman admits that our language is not so easy, but little by little it is improving more and more.

So what impressed the Italian about Lithuania and why was it decided to direct investments to Lithuania and not to neighboring Latvia, Poland or other markets? With 18 years of experience in the financial sector, the Italian has a clear answer.

– Can you tell us why Lithuania?

– Obtaining a banking license is a very interesting and challenging journey for an entrepreneur. It is important because it allows you to attract loans and deposits and then invest them in promising types of assets. Deposits are cheaper than bond issues, thus offering good opportunities.

In addition, having a banking license in one of the European Union countries has many advantages: it is possible to have a central office, for example in Lithuania, but also to invest in other jurisdictions. Therefore, by complying with the requirements and rules, it is possible to expand in the region where you want to do business.

Why Lithuania? I would answer philosophically that, in fact, Lithuania itself has invited us. The Bank of Lithuania proactively spread the news of the country as the headquarters of financial institutions. Furthermore, the specific market situation of the country (Danske Bank exited, DnB and Nordea merged) suggested that there would be a lack of competition in the banking sector. Therefore, Lithuania spoke loudly about considering investments from foreign investors to create more competition in the country’s sector.

This is how it all started: we read articles in which Lithuania tried to attract foreign investors and invited them to try to obtain a specialized banking license.

I remember landing in Vilnius for the first time in 2017. In December, I met with five law firms, all with the same questions. A month later, I contacted the representatives of the Bank of Lithuania and from everything I heard, I realized that we could give it a try.

But don’t be fooled: it wasn’t easy. In order to obtain a banking license, you have to actually invest in Lithuania, you have to prove that your business offer is adequate and good.

Now that PayRay has 40 employees and 36.4 million. I really think investing in Lithuania was a good choice. By the way, I am the only non-Lithuanian employee in our office in Vilnius.

– Have you thought about other countries where you could invest?

– Yes, we analyze all the Baltic countries and Poland. The latter has an important negative aspect: the Poles do not have the euro. Of course, there are risks everywhere, but as an investor, you would add the risk of currency fluctuations. There are mechanisms to prevent it, but it is very difficult and unpredictable.

We also had an eye on Latvia. By the way, we have now started activities on it. But before investing in Lithuania and choosing a country, I came to the conclusion that Lithuania has a bigger market and its financial sector is more developed.

– What did you do before coming to create a company in Lithuania?

– I am a financial expert and have worked in investment banking for 18 years. I really have extensive knowledge and experience in the financial sector. I can say that this experience really helped me build the bank from scratch.

My experience in the financial sector is from Italy and Great Britain. I lived in London for 13 years.

– Can you name the strengths and weaknesses of Lithuania in attracting foreign investment?

– I think there are many positive things. Negative: a large one.

Why is Lithuania interesting for investors? You have good statistical dynamics. Lithuania ranks high in the Doing Business index in terms of transparency and ease of business development. Unemployment in the country is low compared to other countries like Italy. The size of Lithuania’s per capita public debt is also relatively small.

I heard that Lithuanians are now outraged that public debt is growing due to the consequences of the pandemic, but as an Italian, I just smile while listening to them.

Furthermore, before the pandemic, Lithuania’s GDP growth was also good. Of course, we will see what happens to it after the pandemic, but compared to other Western European countries, Lithuania is a land of opportunity, because it is a relatively young economy.

The country also has a sufficiently stable political environment. Yes, the ruling parties are changing, but that is normal in a democracy. It is important that Lithuania has a solid legal basis and that a person can defend their rights.

It is in 2018. In June, when we established ourselves in Lithuania, it seemed like a suitable market: we saw that there was room for competition in the financial sector.

Human capital is also worth mentioning. I think Lithuanians are true Europeans. Furthermore, he speaks Lithuanian, English and Russian. I find it very easy to communicate with people. People are one of the most important factors in our success – we are not Apple selling phones, we sell money, so the people who run the business are our most important assets.

Of course, it is also worth mentioning lower corporate taxes than in some other countries.

As for the negatives, I only see one. Lithuania is a small country. As the banking sector is highly regulated, it means high costs for us: we have a lot to invest in it. We have a lot of costs and to cover them we need to have a size that you can get a return from, so operating in Lithuania has to expand in other countries. It is difficult to reach that size only in Lithuania.

– You mentioned that experience acquired and In Great Britain. Are Lithuanians different from the British or Italians from their compatriots?

– I don’t think there are differences between employees in the financial sector here or in other countries. There are wonderful professionals working in Lithuania, and without them we would not have achieved what we have now. Just maybe because Lithuania is a smaller country, I noticed that some employees have not come across the complexity of financial transactions.