Lithuania attracts major defence firms with new investment incentives

Proceeding from an article published on its website, Defense News features that Lithuania is positioning itself as a key player in the defense industry by streamlining regulations for foreign companies looking to establish production facilities within the country. 

Lithuania's proposal to reduce administrative barriers for foreign defense companies looking to establish operations in the Baltic country has attracted interest from several major Western defense manufacturers.

This response follows the Lithuanian government's approval of new legal amendments designed to streamline and accelerate the processes for international companies to set up local facilities for producing ammunition.

Officials have introduced a new category of investment projects that designates large-scale defense sector production initiatives as "pressing national security needs," allowing them to benefit from regulatory exemptions.

The first company to take advantage of this is Germany’s Rheinmetall, which has already begun building a production plant for 155mm artillery ammunition in Baisogala, Lithuania. The 340-hectare facility will feature a shell manufacturing and load assembly line, with operations expected to begin in mid-2026.

The plant is projected to produce "tens of thousands" of 155mm artillery shells annually, some of which will be supplied to the Lithuanian Armed Forces, according to a press release from Rheinmetall.

Agnė Raščiūtė, head of communications at Invest Lithuania, a government agency under the Ministry of Economy, said that at least five other companies have shown interest in utilizing the same legislative pathway.

One of these companies is the American aerospace and defense giant Northrop Grumman, which signed a cooperation agreement with the Lithuanian Ministry of Defense in September to produce 30mm medium-caliber ammunition for infantry fighting vehicles in Vilnius.

“We hope that our collaboration with our American allies will enhance the country's security and preparedness, while also benefiting the broader region, including Ukraine,” said Gintarė Skaistė, Lithuania’s Minister of Finance, during the agreement signing.

The announcement of this partnership came just weeks before Lithuania acquired an additional 27 Boxer-Vilkas combat vehicles through the Organisation for Joint Armament Cooperation (OCCAR).

According to the Lithuanian military's specifications, the vehicles will be fitted with US-made 30mm MK-44S cannons and long-range anti-tank missiles manufactured by Israel.

By Naila Huseynova