The Buzz in Lithuania: Interview with Elijus Burgis of COBALT

Stable markets and an increase in start-up and tech sector professionals are looking good for Lithuania right now, but there are some standing hurdles within competition regulations that could stifle the free movement and growth of business, according to Cobalt Partner Elijus Burgis.

“The initial shock that followed the beginning of the war dissipated shortly and the legal markets, as well as the business sectors, reversed their slowdowns quickly,” Burgis begins. “Transactions, being the first to feel any and all negative sentiments in the market – leading to deals being suspended or aborted – did not suffer in Lithuania at all, at least not yet.”

Speaking of surprising market developments as a consequence of the global crisis, Burgis points to the startup sector. “We see the consequences of layoffs in the US and Europe spilling over into Lithuania – but with a positive twist,” he says. “While the markets are going down elsewhere, Lithuanian companies see this as an opportunity to scoop up talent.” According to him, Lithuanian startups have a “strong presence abroad” making it easier for them to “attract new people as fresh talent is freeing up.” Moreover, he indicates that there are “people attracted to Lithuania also from Ukraine as well as Belarus and Russia – and this could very well continue.”

Even the “ever-challenging construction sector – that is heavily impacted by international supply chain disruptions – is performing well in Lithuania,” Burgis says. While the costs have surged, it has not been “prohibitive in any way. In fact, most of the construction projects in Vilnius are on track for timely completion.”

Having all of this in mind, Burgis stresses that there is no downturn. “There is no uptick in litigation, which would always be a consequence of any external shocks to the transaction market, no matter how short they last,” he explains. “Neither have we seen any surge in bankruptcies, insolvencies, or restructurings, at least for now, which only further points to things being stable.”

Speaking more about legal updates, Burgis does indicate that “competition and antitrust clearance procedures are still very much affecting transactions. More transactions are being either limited or rejected by the competition authorities.” He says that the markets are “quite consolidated,” which leads to the authority being “very strict. However, it’s the issue with regulations – sometimes they aren’t adequately tailored to take the wider markets into account.” Burgis explains that this is a significant issue, because “Lithuania is a small market and being a dominant player here is not the same as being a dominant player on the European market as a whole – the competition authority should start taking that into account.”

Finally, Burgis says that what remains a big challenge is geopolitics. “The entire regional tension is creating certain limits leading to some investors employing a wait-and-see approach, especially those that are based in faraway jurisdictions.” He feels that “Lithuania’s major challenge, right now, is to succeed in projecting an image of our reality of stability and safety, in order to stave off any fears.”