In May 1991, a foreign investment law was passed permitting majority holdings by non-residents and guaranteeing the full transfer of profits.
Various tax benefits may be granted to foreign investors depending on the type and size of the investment. When purchasing privatized Lithuanian companies or forming joint ventures, foreign investors are usually expected to provide employment guarantees.
Foreigners from European Union and NATO-member nations may own land, while foreigners from all other nations may not. The provision is aimed primarily at foreigners from former Soviet republics who are the main non-Western investors in Lithuania. Foreigners not eligible to own land may rent it for a period of up to 99 years.
In 1998, foreign direct investment (FDI) inflow into Lithuania reached $925.5 million, up from $354.5 million the year before, due largely to the privatization of Lithuania's telecommunications company. From 1999 to 2001, FDI inflow averaged $437 million a year. In 2002, contrary to worldwide trends of decreasing inward FDI flows, FDI in Lithuania rose 21.9% to $543 million.