Since 1 July 2024, the Law on Defence and Security Industry has been in force in Lithuania.
Industrial Cooperation in Lithuania
Industrial Cooperation (IC) is a mandatory mechanism applied to major defence procurement contracts. It ensures that foreign producers contribute to Lithuania’s defence and security industry by investing locally, transferring technology, or providing access to know-how and infrastructure.
IC refers to an Agreement between a foreign producer and Lithuanian authorities: Defence Materiel Agency (DMA) under the Ministry of National Defence (MoND) and the Ministry of Economy and Innovation (MoEI).
This Agreement sets out measures to fulfil the foreign producer’s contractual obligations by engaging Lithuanian legal entities or organisations in developing and/or producing defence equipment critical to Lithuania’s priority military capabilities.
Key Requirements & Conditions
1. Scope of Application – Applies to procurement of military hardware listed in the government-approved register.
2. Minimum Contract Value – IC applies when procurement contract exceeds €5 million (excl. VAT).
3. Maximum Offset Limit – IC obligations cannot exceed 30% of contract value.
Multipliers (Evaluation Weights)
IC measures are evaluated by applying multipliers, determining the credit value towards IC obligations.
| Measure | Multiplier | Explanation |
| Technology transfer | 7 | Applied in R&D to create defence products/services. |
| Direct investment | 5 | Funding to increase competences in MoND technologies. |
| Access to infrastructure | 3 | Free access for Lithuanian R&D/companies. |
| Consulting | 1 | Experts provide consulting; value from working hours. |
| Procurement | 1 | Goods/services supporting MoND-specified technologies. |
Calculation Principle
Multiplier × Actual Costs = Value counted towards IC obligation.
Each approved measure is monitored at 50% and 100% completion milestones.
Key Process Steps
- MoND decision to apply IC
- DMA includes IC contract draft in tender documents
- Producer must sign IC contract alongside procurement contract
- Within 20 days, producer specifies IC measures
- Approval: Measures pre-approved by DMA and MoEI
Defence Industries Associations in Lithuania
- Lithuanian Defence and Security Industries Association (~130 members) – www.lgspa.lt
- National Defence Industries Association (~30 members) – www.ngpa.lt
- Lithuanian Defence Innovators Industries Association (~10 members) – www.lgipa.eu
- Lithuanian Confederation of Industrialists (~4000 members) – www.lpk.lt
- Engineering and Technology Industries Association of Lithuania LINPRA (~140 members) – www.linpra.lt
Contacts
DMA: [email protected]
MoEI: [email protected]
Relevant Websites
Partners
