On the 2nd of May, I started my 3rd and final project in the junior professional program. Now I work on the issues related to temporary residence permits and fake companies registered by foreigners.
According to media, there are hundreds of websites claiming that Lithuania is an easily accessible country and offering to sell a company registered in Lithuania for 1,500-2,000 Euros. The ownership of such a company gives an opportunity to get a temporary residence permit, which in turn, opens the door to other Schengen countries.
The problem lies within the fact that there is no check system in place, and some Lithuanians as well as foreigners have decided to use the existing loopholes for their own benefit. One Lithuanian man registered over 200 companies and sold them for 2,000LTL each. He says that sometimes he gets lucky and the intermediaries buy 5-6 companies in one go. Very often, these companies are registered in private apartments, and there are cases when as many as hundred companies pretend to be working in the same place.
The head of the Migration Board, Gintaras Baguzis, says that many foreigners from Nigeria, Pakistan, Bangladesh and India claim that they plan to do business in Lithuania, but in reality, the majority of them are not involved in any business activities and use their residence permits to go abroad. Some of them have absolutely no idea where they are going or what for. Some officers joke that if they asked whether they planned on growing bananas in Lithuania, they would probably answer “yes”.
These problems were already raised a few years ago, but, unfortunately, no visible results were achieved. In November of the last year, Lithuania was shaken by a scandal of the alleged corruption within the Migration Department. It is only after this scandal that Lithuanian politicians have finally decided to do something. Parliamentary Committee on National Security and Defence has requested the Ministry of Interior to submit the proposals for the amendment of the aliens’ law in order to fill the existing gaps. The problem has also come into attention, because from July of this year Lithuania will be chairing the Council of the European Union and has indicated the protection of the EU’s external borders as one of its main priorities.
Foreign practice includes such requirements as the amount of money invested, tax paid, local people employed, annual turnover, business plan, experience in the relevant business or investment field, etc. It has to be seen what changes (if any) will occur in Lithuania, but it is clear that some steps need to be taken to make Lithuania attractive to high skilled employees, entrepreneurs and investors, while preventing illegal migration and the establishment of fake companies.