Low Cost Manufacturing Eastern Europe in 2022

LOW COST MANUFACTURING EUROPE Estonia Georgia Lithuania Moldova Russia
OUR RANKING IN ORDER OF PREFERENCE 1 2 3 4 5
Summary at a Glance
Total year 1 engagement set up costs? €10,150 US$11,550 €10,925 US$10,145 US$17,960
Total year 2 costs (incl. audit and tax)? €5,100 US$4,550 €3,400 US$1,475 US$5,634
Our Client must travel during the engagement? No No No No No
Total engagement period? 10 weeks 9 weeks 11 weeks 11 weeks 18 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% 99.8 99.7%
English language proficiency % of population? 61% 10% 50% n/a 8%
Incorporation requirements
How long to set the company up? 3 weeks 1 week 2 weeks 2 weeks 6 weeks
Minimum number of shareholders? 1 1 1 1 1
National shareholder required? No No No No No
Individual and corporate shareholders allowed? Yes Yes Yes Yes Yes
Minimum number of directors? 1 1 1 1 1
Resident director required? No No No No Yes
Minimum paid up share capital? €2,500 US$1 €2,500 US$300 US$130
Fast solution (turnkey) available? Yes No Yes No Yes
Corporate director(s) allowed? No Yes No Yes No
Public register of shareholders & directors? Yes Yes Yes No Yes
Tax and accounting considerations
Corporate tax payable? 20% 15% 15% 12% 20%
Withholding tax on dividends paid overseas No 5% 0% 6% 15%
Annual financial statements required? Yes Yes Yes Yes Yes
Statutory independent annual audit required? No No No No No
Local GST or VAT? (%) 20% 18% 21% 20% 18%
Tax incentives for manufacturing start-ups? Yes Yes Yes Yes Yes
Access to double tax treaties? Yes Yes Yes Yes Yes
Tax exempt free zones available? Yes Yes Yes Yes Yes
EU VAT member? Yes No Yes No No
Corporate bank account considerations
Healy Consultants’ preferred bank? Swedbank People’s Bank of Georgia Finasta bank Victoria Bank Sberbank
How long to open bank account? 4 weeks 4 weeks 4 weeks 4 weeks 5 weeks
Do I travel to open the bank account? No No No No No
Multi-currency corporate bank account? No No No No No
Multi-currency corporate visa debit cards? No No No No No
Corporate ATM card available? Yes Yes Yes Yes Yes
Bank rating by World Economic Forum? 29 69 41 82 53
Ease of getting credit by WEF? 40 110 91 104 56
Euro currency used by this country? Yes No Yes No No
Employment considerations
Average skilled labour monthly salary? €950 €345 €844 €215 US$525
Average unskilled labour monthly salary? €650 €250 €570 €150 US$370
Average social contributions (% salaries)? 20% 15% 23.50% 23% 22%
Minimum national salary? €390 €63 €300 €60 €97
Mandatory labor unions? No No No No No
Minimum notice to dismiss employees? 15 days 60 days 14 days 14 days 30 days
Minimum redundancy indemnity? 14 days 14 days 15 days 30 days 60 days
Quotas on foreign workers? Yes Yes Yes Yes Yes
How long to get work permit approved? 2 months 1 month 2 months 2 months 3 months
Manufacturing considerations
Electricity prices, (Eur per kWh)? 0.25 0.12 0.19 0.18 0.13
Rank for getting electricity (by WB) 34 62 54 104 29
Ranking for transport infrastructure? (by WEF)? 44 128 27 100 94
Ranking for customs procedures (by WEF)? 29 118 28 99 141
Import duty on raw materials? Yes Yes Yes Yes Yes
Government incentives for start ups? Yes Yes Yes Yes Yes
Internet connectivity rating? 21 65 36 52 52
Global business efficiency index 17 15 24 63 62
Does the country have maritime access? Yes Yes Yes No Yes
Logistical considerations
Preferred manufacturing city? Tallinn Tbilisi Klaipeda Chisinau Khatanga
Proximity of sea port in kilometers? 5.7 8 7.6 94 47
Proximity of airport in kilometers? 12 15 35 6.3 14.2
Proximity of rail in kilometers? 19 22 13 5 10.3
Computer literacy % of population 99.8% 99.80% 99.70% 98.50% 99.70%
Local purchasing power (GDP per capita) US$25,865 US$6,100 US$25,708 US$4,753 US$23,292
Local market size (in USD billions) 20.14 12.9 37.4 6.2 1.5
Average annual inflation rate 2014-15? -0.10% 4.50% -0.50% 8.30% 15.30%
Average unemployment rate 2014-15? 6.20% 12.40% 8.20% 8.50% 5.40%
Ease of doing business index 17 15 24 63 62
Estimate of engagement costs US$ US$ US$
Healy Consultants engagement fees 3,250 4,300 4,275 3,100 3,500
Company secretary and registered office 950 1,100 1,100 1,295 1,200
Government fees 250 450 100 50 110
Resident director fees (0 if not required) 0 0 0 0 0
Corporate bank account opening 4,950 4,950 4,950 4,950 4,950
Estimate of total outgoings in Year 1 10,150 11,550 10,925 10,145 17,960
Draft sales invoice attached View invoice PDF View invoice PDF View invoice PDF View invoice PDF View invoice PDF

Contact us

For additional information on our Europe company incorporation services, please contact our in-house country expert, Mr. Aidan Healy, directly:
client relationship officer - Aidan