The FinTech companies and real estate enterprises have noticed an increase in Belarusians’ interest in settling in Lithuania as more accounts have been opened and more people are looking for rental homes. However, an analysis of Belarusian capital companies reveals that the much-discussed transfer of IT companies to Lithuania has not yet taken place, and the specialists of the credit bureau advise to assess the reliability of Belarusian companies carefully.
The Number of New Accounts Opened Has More Than Doubled
According to the FinTech company of Lithuanian capital “Paysera,” the migration of people, businesses, and capital to the Baltic States has increased since presidential election in Belarus.
“We opened over 2.3 thousand accounts for Belarusian citizens in the first half of last year, and over 4.5 thousand in the second half of the year. Belarusians are encouraged to open an account in the EU for several reasons. Some of them are looking for a safe place for their savings, fearing a possible devaluation of the Belarusian rouble. Others establish a business or find work in Lithuania. We also received an increasing number of applications from companies with Belarusian shareholders this winter. As a result, Belarusian capital is increasing in the Baltic States although at a slower rate than expected,” said Marius Pareščius, Vice President of “Paysera” for International Business Development.
Commotion in the Real Estate Market – Currently, Nearly 1000 Rental Homes Are Being Sought
The Lithuanian Real Estate Development Association has also noticed an increase in Belarusians’ interest in living in Lithuania.
“According to our members, people are currently looking for approximately 800-1000 houses for rent in the market. Some are smaller because individual workers arrive first; however, other companies are moving faster, and their employees are already looking for 3 to 4-room apartments suitable for families. There is a lack of larger housing for rent today, and this lack is expected to persist in the coming years,” forecast Mindaugas Statulevičius, President of LNTPA.
According to him, the market will not receive a significant number of Belarusians wishing to buy housing in the coming years.
“It will take some time for the newcomers to build a history of earnings here, and for banks to feel more confident lending to them. It will be possible to predict which housing demand will grow the most for rent and sales once the financial capacity of the transferred companies and the income of their employees become clear. So far, 2 to 3-room apartments with monthly rental cost of up to EUR 800 have proven to be the most marketable,” – explains M. Statulevičius.
Credit Bureau Experts: The Rise of Belarusian Companies Has Not Yet Been Noticed, and Traditional Businesses Continue to Prevail
Recently, there have been a number of discussions in Lithuania about how to attract more value-added Belarusian companies, such as those working in the field of information technologies. Other countries, such as Poland and Ukraine, are also actively competing to attract such companies.
However, the analysis shows that trade, services and transportation companies currently dominate among Belarusian-owned companies. Aurimas Kačinskas, Head of Credit Bureau “Creditinfo Lietuva”, believes that the increased interest of Belarusians in accounts and real estate reflects their intention to start business in Lithuania; however, the number of newly registered companies has actually decreased in comparison to 2019.
For example, 73 new Belarusian capital companies were registered in Lithuania in 2019, compared to 49 in 2020. There are currently 320 Belarusian companies operating in Lithuania.
The majority of Belarusian capital companies are wholesale and retail companies (181 companies, 57%), one-fifth of companies (58 companies or 18%) are operating in the field of services, and nearly every eighth company operates in the transportation sector (43 companies or 13%). 21 companies are involved in construction sector (7%), while 1-5 companies are operating in other areas. (See the diagram)
“When assessing the financial situation of Belarusian companies, we should note that their distribution by risk is virtually identical to that of Lithuanian companies. Moreover, there aren’t many companies among Belarusian capital companies involved in the riskiest sectors, such as restaurants or hotels,” added A. Kačinskas.
11% of Belarusian capital companies were classified as extremely risky (this indicator was 13% in Lithuania), 23% as highly risky (18% in Lithuania); meanwhile, 31% and 35% respectively were categorised as moderately or less risky (31% and 39% in Lithuania). (See the comparative diagram)
However, the Head of the Credit Bureau advises to conduct a more thorough assessment of the situation of the neighbouring country’s companies before beginning to cooperate: “The fact that nearly one-third (up to 101) of Belarusian companies in Lithuania have so far failed to submit financial statements for 2019 is a matter of concern. This is a sign to their business partners that it would be worthwhile requiring full financial reporting before granting credit.