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Klaipėda pursuits the spotlight for SSC

2019-03-18

European countries are increasingly focussing and developing business services industry across the globe. Simultaneously, Lithuania has already become an attractive location for shared service (SSC) and business process outsourcing (BPO) centres. With over 70 centres that employ more than 15K people, Lithuania keeps an excellent performance in the sector. Now it is Klaipėda’s turn to once prove its value. The 5th largest city in the Baltics boasts the most northerly ice-free port, which provides unparalleled links between Scandinavia, the CEE and China. The ever-growing city already harbours several SSCs, and being recognised as an industrial hub, Klaipėda is in perpetual search for more.

“Klaipėda’s long history as transportation hub in connection to its established maritime university gave us the confidence we needed to establish a Shared Service Centre in the city. Also, the fight for talent is less intense in Klaipėda than in the Baltic capitals, ensuring better odds for recruiting and retaining good staff,” says Svante Johansson, CFO of Greencarrier.

Skilled talent pool in the area

Famous as the city of students, with 13 higher education institutions and over 250 study programs, 48 of which are in English – Klaipėda delivers the multilingual talents the businesses need. Being future focused Klaipėda’s academic programs are renewed periodically to increase their variety and scope to match the trends and stay competitive in the market. For example, LCC international university, which has 70% of students coming from outside of Lithuania, in addition to their most popular business management program, included a few new programs – Contemporary Communication and International Relations and Development. LCC delivers multilingual talents who are ready to work as business professionals and usually secure a career in service industry.

In the meantime, largest in the city - Klaipėda University provides a myriad of talents with competencies in engineering, business management, finance, logistics, IT and many others. Strong university’s link with maritime sector attracts students from all over the region. In addition, Klaipėda University has been rated having the best IT program in Lithuania according to the studies’ quality index. On the side, non-academic but already acknowledged IT institutions - Klaipėda Coding School, Code Academy, Baltic talents - offer courses to improve or gain additional IT skills.

It is worth to mention, that 80% of Klaipėda citizens talk at least one foreign language and 69% have higher education. The most common languages spoken in Klaipėda are English, Russian, French, Italian, Spanish, Scandinavian and German, the latter of which now is the most demanded language in the SSC sector.

Klaipėda’s geographical advantage grants both a lower living cost than the capital Vilnius or Kaunas and access to their professional talent pool due to relative proximity. The new trend of young families moving back to their sea-side roots is not only an indication of improved quality of life in Klaipėda but also acts as an influx of fresh talents to the harbour.

Attractive Operating Economics

It is no secret, that SSC’s are greatly affected by operating costs. Comparing expenditures for the workforce to other CEE and Lithuanian cities, Klaipėda has a clear competitive advantage. For example, in contrast to those in Vilnius, on average, the rental costs of offices are 20% less, starting at 5 euros per square metre (plus utilities) a month. In comparison, the average, monthly rent of the A class offices in Vilnius is about 14 to 17 euros per square metre while in Klaipėda it’s 9 to 13 euros per square metre.

Besides modern office spaces to rent, Klaipėda has a free economic zone (FEZ), located just a few kilometres away from the city centre. With its international recognition, Klaipėda FEZ is one of the most successful in the Baltic states, granting a handful of financial incentives and services that create measurable value for customers. Optimized business costs with tax deductions are more than favourable: reducing the corporate income tax to 0% for the first 10 years, asking 7.5% tax over the next 6 years, and no tax on dividends and real estate. Furthermore, FEZ offers pre-build premises, which allows investors to start operations in Klaipėda in less than three months with needed customization.

Relatively low labour costs are competitive not only among Lithuanian cities but also rivalling international harbours like Gdansk, Tallinn or Malmo. Being able to attract talents and keep them for a lower cost is one of the reasons why well-known companies in engineering, maritime and logistics sectors have already invested in Klaipėda. These are successful examples of service centres operating in the city: Greencarrier - one of the Nordic’s largest transport companies, Omega Technologies - Norwegian tech service provider, Exadel - digital software development company, and Telia - telecommunications and IT service provider.

 

Download full factsheet here.

Infrastructure and quality of life

In terms of infrastructure, Lithuania has one of the best quality road networks in Europe. If travelling by road is not an option, Lithuania’s 3 international airports offer over 80 destinations all around the globe. One of them - nearby Klaipėda airport connects Western Lithuania with 8 important business locations in Europe throughout the year. Also, access to the sea-port creates additional value to both shipping services and travelling.

 

What’s more, having world-class broadband speed and modern office buildings Klaipėda proposes an urban environment by the sea with favourable conditions to grow the business. With support, assistance and aftercare from national and local organisations, such as Klaipėda ID, Invest Lithuania, Klaipėda FEZ – centres can get the help they need to easily set-up a business.

Klaipėda is no. 1 city for quality of life in Lithuania. The city offers a perfect work-life balance: blue flag beaches, UNESCO Heritage, well-developed cycling routes in the region, easy ways to travel from one side of the city to the other and a range of outdoor activities, like volleyball, sailing, kiteboarding. Both nature lovers and sports enthusiasts will find ways to enjoy life in the city.

Maritime culture

Klaipėda is a port city with a long-standing maritime tradition and exceptional academic institutions. Klaipėda University, Lithuanian Maritime Academy and Klaipėda State University of Applied Science – all deliver talents companies need and create a strong international community. In addition, the city has organisations that facilitate the hi-tech and marine sectors: Klaipėda Science and Technology Park, Klaipėda University laboratories, Open Access Centre and LNG Cluster. These organisations collaborate with businesses providing insightful advices and vital support.

City’s key strength that makes it stand out from other locations is the most northerly ice-free port. The ever-growing port continues dredging the area to a depth of 17m and is expanding to south and north with plans to build a 130 ha outer port.

Klaipėda is increasingly asserting its position as an industrial hub, with over 300 maritime, 1500 logistics and transportation companies. There are nearly 58K people employed in the maritime industry in Lithuania, of whom a sizable number work in such world-renowned companies, that have chosen Klaipėda: MSC, DNV-GL, Western Shipyard, DFDS. Thereby, being the city with robust maritime tradition, Klaipėda is the right location for a maritime, transport and logistics SSC.

Being recognized for the ease of doing business, creating a convenient business environment, having the highly skilled specialists the market needs and offering excellent cost-to-quality ratio with a pack of incentives - Klaipėda is more than a suitable place for global business service centres to invest.

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