Low cost manufacturing in Eastern Europe

Low Cost Manufacturing Eastern Europe and Russia

LOW COST MANUFACTURING EUROPEEstoniaGeorgiaLithuaniaMoldovaRussia
Summary at a Glance
Total year 1 engagement set up costs?€8,150US$9,550€8,925US$7,950US$15,460
Total year 2 costs (incl. audit and tax)?€5,100US$4,550€3,400US$4,200US$4,600
Our Client must travel during the engagement?NoNoNoNoNo
Total engagement period?16 weeks9 weeks11 weeks11 weeks18 weeks
Corporation tax rate on net profits?20%15%15%12%20%
Average monthly employee salary (2016)?€1,091€351€748€224€515
Average monthly office rental per sq m?€18€12€20€8€41
Average monthly warehouse rental per sq m?€6,50€2€8€2€6
Literacy % of population?99.9%99.70%99.8%99.899.7%
English language proficiency % of population?61%10%50%n/a8%
Incorporation requirements
How long to set the company up?6 weeks1 week2 weeks2 weeks6 weeks
Minimum number of shareholders?11111
National shareholder required?NoNoNoNoNo
Individual and corporate shareholders allowed?YesYesYesYesYes
Minimum number of directors?11111
Resident director required?NoNoNoNoYes
Minimum paid up share capital?€2,500US$1€2,500US$300US$130
Fast solution (turnkey) available (click link)?YesNoYesNoYes
Corporate director(s) allowed?NoYesNoYesNo
Public register of shareholders & directors?YesYesYesNoYes
Tax and accounting considerations
Corporate tax payable?20%15%15%12%20%
Withholding tax on dividends paid overseasNo5%0%6%15%
Annual financial statements required?YesYesYesYesYes
Statutory independent annual audit required?NoNoNoNoNo
Local GST or VAT? (%)20%18%21%20%18%
Tax incentives for manufacturing start-ups?YesYesYesYesYes
Access to double tax treaties?YesYesYesYesYes
Tax exempt free zones available?YesYesYesYesYes
EU VAT member?YesNoYesNoNo
Corporate bank account considerations
Healy Consultants’ preferred bank?SwedbankPeople’s Bank of GeorgiaFinasta bankVictoria BankSberbank
How long to open bank account?4 weeks4 weeks4 weeks4 weeks5 weeks
Do I travel to open the bank account?NoNoNoNoNo
Multi-currency corporate bank account?NoNoNoNoNo
Multi-currency corporate visa debit cards?NoNoNoNoNo
Corporate ATM card available?YesYesYesYesYes
Bank rating by World Economic Forum?2969418253
Ease of getting credit by WEF?401109110456
Euro currency used by this country?YesNoYesNoNo
Employment considerations
Average skilled labour monthly salary?€950€345€844€215US$525
Average unskilled labour monthly salary?€650€250€570€150US$370
Average social contributions (% salaries)?20%15%23.50%23%22%
Minimum national salary?€390€63€300€60€97
Mandatory labor unions?NoNoNoNoNo
Minimum notice to dismiss employees?15 days60 days14 days14 days30 days
Minimum redundancy indemnity?14 days14 days15 days30 days60 days
Quotas on foreign workers?YesYesYesYesYes
How long to get work permit approved?2 months1 month2 months2 months3 months
Manufacturing considerations
Electricity prices, (Eur per kWh)?
Rank for getting electricity (by WB)34625410429
Ranking for transport infrastructure? (by WEF)?441282710094
Ranking for customs procedures (by WEF)?291182899141
Import duty on raw materials?YesYesYesYesYes
Government incentives for start ups?YesYesYesYesYes
Internet connectivity rating?2165365252
Global business efficiency index (click link)?1715246362
Does the country have maritime access?YesYesYesNoYes
Logistical considerations
Preferred manufacturing city?TallinnTbilisiKlaipedaChisinauKhatanga
Proximity of sea port in kilometers?5.787.69447
Proximity of airport in kilometers?1215356.314.2
Proximity of rail in kilometers?192213510.3
Computer literacy % of population99.8%99.80%99.70%98.50%99.70%
Local purchasing power (GDP per capita)US$25,865US$6,100US$25,708US$4,753US$23,292
Local market size (in USD billions)20.1412.937.46.21.5
Average annual inflation rate 2014-15?-0.10%4.50%-0.50%8.30%15.30%
Average unemployment rate 2014-15?6.20%12.40%8.20%8.50%5.40%
Ease of doing business index (click link)1715246362
Estimate of engagement costsUS$US$US$
Healy Consultants engagement fees3,2504,3004,2753,1003,500
Company secretary and registered office9501,1001,1001,1001,100
Government fees25045010050110
Resident director fees (0 if not required)00000
Corporate bank account opening2,9502,9502,9502,9502,550
Estimate of total outgoings in Year 18,1509,5508,9257,95015,460
Draft sales invoice attachedEstonia LLC setup costGeorgia LLC setup costLithuania LLC setup costMoldova LLC setup costRussia LLC setup cost

Contact us

For additional information on our Europe company incorporation services, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Karen Lee, directly:
client relationship officer - Karen