REPUBLIC OF LITHUANIA                                     
                               LAW                                              
                               ON                                               
                        THE FUNDAMENTALS                                        
                     OF FREE ECONOMIC ZONES                                     
                                                                                
                                                                                
                            Chapter 1                                           
                       General Provisions                                       
                                                                                
     Article 1. General Part                                                    
     The Law  establishes the  procedure and terms and conditions               
of the  establishment, operation and liquidation of free economic               
zones in the Republic of Lithuania as well as the legal status of               
the economic  entities operating  in the  free economic zone. The               
purpose of  the Law  is to  create  in  the  free  economic  zone               
favourable taxation,  customs  duties,  currency  and  financial,               
legal and  other preferential   conditions of economic-commercial               
activities for the establishment within them by foreign and local               
economic   entities   of   enterprises   and   organisations   of               
international trade,  production and  export, which  develop  and               
introduce technical-scientific  progress, as well as to stimulate               
foreign investments and  create new jobs.                                       
                                                                                
     Article 2. Free Economic Zone                                              
     1. Free  economic zone  (hereinafter referred  to as "zone")               
means  a  territory  designated  for  the  purpose  of  economic-               
commercial  and   financial  activities   within  which  economic               
entities are  provided with special economic and legal conditions               
of operation  as established by this Law. The territory must have               
no permanent residents.                                                         
     2. The  goods within  the zone  shall be considered as being               
outside the  customs territory  of the Republic of Lithuania with               
respect to import and export duties and charges, as well as other               
prohibitions and restrictions of economic character.                            
                                                                                
     Article 3. Types of Activities of Free Economic Zones                      
     1. Commercial,  production and  export, business, banking or               
other activities  may be  developed in  a zone established in the               
Republic  of   Lithuania.  The   types  of  activities  shall  be               
determined by  a separate  law on the establishment of a specific               
zone.                                                                           
     2. Scientific-technological  parks may be established in the               
Republic of  Lithuania. The  parks shall  be established with the               
purpose  of   creating  favourable  conditions  for  foreign  and               
national production enterprises to carry out scientific research,               
tests and  construction work,  which would  be performed by local               
skilled  workers,   as  well   as  to   develop  the   export  of               
technologically  qualified and competitive products.                            
                                                                                
     Article 4. Laws of the Republic of Lithuania Effective                     
               in the Zone                                                      
     The Constitution  of the  Republic of Lithuania and this Law               
shall be  effective in the zone. Other laws and legal acts of the               
Republic of  Lithuania shall be effective to the extent the legal               
relations of activities of the zone and its economic entities are               
not regulated by  this Law.                                                     
                                                                                
     Article 5. Administration of the Zone                                      
     1. The  territory of  the zone  shall be  leased to the zone               
administration  company   in  accordance   with   the   procedure               
established by law.                                                             
     2. The economic activities of the zone shall be organised by               
the zone administration company.                                                
                                                                                
     Article. 6.  The Zone Administration Company                               
     1. The  zone administration company shall be a legal person.               
No less  than 51%  of capital  of the zone administration company               
shall belong  to natural  and legal  persons by  the    right  of               
private ownership.  It  shall  operate  in  compliance  with  the               
Company Law.  The zone administration company shall be registered               
in accordance  with the  procedure established  by the Law on the               
Register of Enterprises.                                                        
     2. The  powers of  the zone  administration company shall be               
determined by  this Law,  as well  as by  the bylaws  of the zone               
administration company approved by the Government of the Republic               
of Lithuania.                                                                   
                                                                                
     Article 7. The Zone Enterprise                                             
     1. The  zone enterprise  shall be  an enterprise of any form               
and type  of ownership situated within the zone and registered by               
the  zone   administration  company   in  accordance   with   the               
requirements of  the Law  on the  Register of  Enterprises of the               
Republic of  Lithuania, to  which the  terms  and  conditions  of               
activities established  by this Law  and state guarantees for its               
activities within the zone shall apply.                                         
     2. The  procedure for establishing zone enterprises shall be               
established by the statute of the zone.                                         
     3. The zone enterprise shall operate in compliance with this               
Law, the  statute of  the  zone,  its  bylaws  and  the  founding               
documents, as  well as the agreement with the zone administration               
company concerning  the terms and conditions of activities in the               
zone.                                                                           
     4.  The  economic-commercial  activities  specified  in  the               
founding documents,  to which  restrictions imposed by the Law on               
Enterprises  of  the  Republic  of  Lithuania  and  laws  on  the               
appropriate types  of enterprises  shall not  apply,    shall  be               
permitted in  the zone.  Retail trade  shall be permitted only to               
the extent it serves to satisfy the internal needs of the zone.                 
     5. An  economic entity  which wishes to be registered in the               
zone shall submit an application and other documents provided for               
by the  Law on the Register of Enterprises and the statute of the               
zone to the zone administration company.                                        
     6. A  decision concerning  the registration  of an  economic               
entity shall be adopted by the zone administration company.                     
     7. All  enterprises of  the zone  shall be registered by the               
zone administration  company   in accordance  with the enterprise               
registration procedure established by the laws of the Republic of               
Lithuania.  The   zone  administration   company  shall  issue  a               
registered enterprise  with a certificate in the form established               
by the  Chief Registrar  of  the  Register  of  the  Republic  of               
Lithuania. The  zone administration  company   shall  inform  the               
Chief Registrar  of the Register of the Republic of Lithuania and               
the state  institution authorised to conduct state supervision of               
free economic  zones of  the enterprises registered in a month by               
the 10th day of the next month.                                                 
     8. The  activities of  a zone enterprise may be suspended if               
the enterprise  violates the  terms and  conditions of activities               
established by  this Law,  the statute of the zone, the bylaws of               
the  zone   enterprise,  or   the  agreement   between  the  zone               
administration company  and the economic entity or other laws and               
legal acts  of the  Republic of  Lithuania which are in effect in               
the zone.  On the proposal of the state institution authorised to               
conduct state  supervision of  free economic  zones or  the  zone               
administration company,  inspections of  a zone enterprise may be               
carried out  in accordance with the procedure established by laws               
of the Republic of Lithuania                                                    
     Work in  a zone  enterprise may  be suspended  in accordance               
with the procedure established by the Law on Labour Protection.                 
     9. If  an enterprise  of the  zone wishes  to carry  out its               
activities in  another location in the territory  of the Republic               
of Lithuania  (outside the  free economic  zone),   it  must  get               
registered as  a new  enterprise in accordance with the procedure               
established by law.                                                             
     If an  enterprise registered  in the  Republic of  Lithuania               
wishes  to  engage  in  activities  in  the  zone,  it  must  get               
registered in the zone in the established manner.                               
                                                                                
     Article 8. Spheres of Capital Investment and Activities                    
               Prohibited and Restricted in the Zone                            
     1.  The   following  spheres   of  capital   investment  and               
activities shall be prohibited for enterprises in the zone:                     
     economic-commercial activities connected with ensuring state               
security and  defence, as well as with the production, storage or               
sale of  arms, ammunition  or explosives,  or having  a   harmful               
effect on the environment;                                                      
     production,  processing,   storage  and   neutralisation  of               
hazardous and radioactive materials;                                            
     production,  sale   and  storage   of  narcotics,  narcotic,               
virulent and poisonous substances;                                              
     processing, sale  and storage  of crops containing narcotic,               
virulent and poisonous substances;                                              
     manufacture of vodka, liqueur and other liquors;                           
     manufacture of tobacco products;                                           
     manufacture of  securities, paper  money and  coins, postage               
stamps;                                                                         
     founding and keeping of gambling-houses;                                   
     organisation of lotteries;                                                 
     publishing     activities,  except   for   personal   needs,               
preparation and broadcasting of radio and TV programmes, with the               
exception of  technical servicing  of printing -houses, radio and               
television;                                                                     
     treatment  of   patients  who   are  ill  with  serious  and               
especially dangerous  infectious diseases, including venereal and               
contagious skin diseases, aggressive forms of mental diseases;                  
     treatment of animals ill with especially dangerous diseases;               
and                                                                             
     settlement of labour migration issues.                                     
     2. A  licence issued  by the  Government of  the Republic of               
Lithuania or  its authorised  state institution  must be obtained               
for licensed  activities specified  in the  Law on Enterprises of               
the Republic of Lithuania.                                                      
     3. Investment of capital of foreign origin into exploitation               
of natural resources shall be prohibited without a concession.                  
                                                                                
                                                                                
                            Chapter 2                                           
                ESTABLISHING A FREE ECONOMIC ZONE                               
                                                                                
     Article. 9. Zone Establishment Procedure                                   
     1. The  establishment of  a zone  may be  initiated  by  the               
municipalities of  the Republic's  towns and  districts, local or               
foreign economic entities registered in the Republic of Lithuania               
who present  to the  Government of  the Republic  of Lithuania  a               
proposal to  establish a zone. The following must be specified in               
the proposal:                                                                   
     type (types) of zone activities;                                           
     description of  territorial boundaries  of the  zone and the               
plan of its territory; and                                                      
     the county  governor's  agreement  to  lease  the  territory               
allotted to the zone co-ordinated with municipalities.                          
     2. The zone shall be established by a law of the Republic of               
Lithuania. The  territorial boundaries,  the type  (types) of the               
activities in  the zone  and the  term of zone activities must be               
established in the law.                                                         
     3. After  the Seimas of the Republic of Lithuania passes the               
law   on the  establishment of  a zone,  the  Government  of  the               
Republic  of  Lithuania  shall  adopt  a  decision  regarding  an               
international  competition   for  the  preparation  of  the  best               
business plan  for the  zone and  the zone statute as well as for               
choosing the group of founders.                                                 
     International  competitions   shall  be   organised  by  the               
Government of  the Republic of Lithuania or the state institution               
authorised by  it, which  shall determine  the conditions  of the               
competition and form the competition commission.                                
     4. The  Government of  the Republic of Lithuania shall adopt               
resolutions on:                                                                 
     1) the decision of the competition commission concerning the               
formation of the zone founders' group;                                          
     2) the  approval of  the chairman  and members  of the  zone               
administration company;                                                         
     3) the approval of the zone statute; and                                   
     4) the  operation of  the zone  and  the  conclusion  of  an               
agreement between the Government of the Republic of Lithuania and               
the zone administration company regarding the activities.                       
     5. Science  and technology  parks shall  be  established  in               
accordance with the procedure determined by the Government of the               
Republic of Lithuania.                                                          
                                                                                
                                                                                
                            Chapter 3                                           
             ADMINISTRATION OF A FREE ECONOMIC ZONE                             
                                                                                
     Article 10. Basic Principles of Zone Administration                        
     The structure,  functions, powers  and responsibility of the               
zone administration  bodies shall  be established by this Law and               
by the laws on an individual zone.                                              
                                                                                
     Article 11. The Zone Administration Company                                
     The zone  administration company  shall be  formed from  the               
members appointed  by the  council of  the  municipality  in  the               
territory whereof  the zone  is  being  established,  one  member               
appointed by  the Government  of the  Republic of  Lithuania  and               
members who  initiated the  establishment of the zone and are the               
winning bidders  of the  international competition  for the  best               
business plan,  statute    of  the  zone  and  selection  of  the               
founders'  group,   held  in   accordance  with   the   procedure               
established by  the Government  of the Republic of Lithuania. The               
chairman of the zone administration company shall be nominated by               
the members  of the  zone administration  company by open ballot.               
Over 50%  of members  of the  zone administration company must be               
citizens of  the Republic of Lithuania. Changes in the membership               
of the  zone administration  company   (with the exception of the               
chairman  of  the  zone  administration  company,  who  shall  be               
approved   by the Government of the Republic of Lithuania)  shall               
be approved,  on the  recommendation of  the zone  administration               
company   and municipalities, by the state institution charged by               
the Government  of the  Republic of  Lithuania in accordance with               
the procedure  established by  law to carry out state supervision               
of the zones.                                                                   
                                                                                
     Article 12. Rights, Duties and Responsibility of the                       
               Zone Administration Company                                      
     1. The zone administration company shall have the right:                   
     acting in  accordance with  the goals  of operation  of  the               
zone, its  investment business  project, statute  as well  as the               
bylaws of  the zone  administration company,  to register  in the               
zone economic entities in compliance with the Law on the Register               
of Enterprises of the Republic of Lithuania and this Law:                       
     to sublease  to the  zone enterprises registered in the zone               
the land and immovable property leased to the zone administration               
company;                                                                        
     to determine the internal rules of the zone;                               
     to establish service enterprises in the zone;                              
     to   set, in the agreements between the zone enterprises and               
the zone  administration company, the financial conditions of the               
sublease of  land and immovable property  and provision of mutual               
services;                                                                       
     to obtain  from the  economic entities operating in the zone               
statistical report  data concerning  their  activities  which  is               
established by the Government of the Republic of Lithuania;                     
     to register  in the  zone, in  compliance with the procedure               
established by  Article 17 of this Law, the banks of the Republic               
of Lithuania  or foreign states, or their subsidiaries, insurance               
agencies or their affiliates;                                                   
     to use  resources on  a co-operative  basis for  the  common               
needs  of   the  infrastructure   development   and   environment               
management of the zone; and                                                     
     to submit  proposals to  the Government  of the  Republic of               
Lithuania and  the state  institution  which  carries  out  state               
supervision of  free economic  zones  on  the  amendment  of  the               
statute of the zone and changing of its territorial boundaries.                 
     2. Duties of the zone administration company:                              
     to abide  by this  Law and  other laws  of the  Republic  of               
Lithuania which  are in  force in  the zone,  the statute  of the               
zone, the bylaws of the zone administration company;                            
     to organise the economic activities of the zone;                           
     to ensure  that the economic entities registered in the zone               
adhere to  the statute  of the  zone, refrain  from  engaging  in               
activities  prohibited   under  the   laws  of  the  Republic  of               
Lithuania, operate  in accordance  with the  terms and conditions               
set in  the agreement, keep to the requirements of the Law on the               
Environmental Protection  of the Republic of Lithuania  and other               
legal acts in the sphere of environmental protection;                           
     to ensure  the protection  of the zone boundaries and create               
conditions for  the work  of customs of the Republic of Lithuania               
at the check posts;                                                             
     to ensure physical protection of the territory of the zone;                
     to create  conditions for  the law  enforcement institutions               
and  international   control  organisations   to  perform   their               
respective functions in the zone; and                                           
     to form a commission for resolving disputes between economic               
entities.                                                                       
     3. The  zone administration  company   shall be liable under               
the laws  of the  Republic of  Lithuania for  its activities  and               
negative effects thereof.                                                       
     4. The  zone administration  company   shall account  to the               
Government of the Republic of Lithuania for the activities of the               
company and  the zone within the time period and according to the               
procedure established by the statute of the zone.                               
                                                                                
     Article 13. Zone Enterprises Board                                         
     An advisory  board of  zone enterprises  may be  formed  for               
representing  the   interests  of   the  zone  enterprises..  The               
procedure of  its formation  and its powers shall be specified in               
the statute of the zone.                                                        
                                                                                
     Article. 14. State Supervision of Free Economic Zones                      
     State supervision  of free  economic zones  shall be carried               
out according  to the  procedure established by the Government of               
the Republic  of Lithuania by the state institution authorised by               
it or  a special  institution formed by it. The above institution               
shall also  resolve all  issues  related  to  the  establishment,               
administration and activities which are common to all zones.                    
                                                                                
                            Chapter 4                                           
    TAXES, CUSTOMS DUTIES, CURRENCY AND FINANCIAL CONDITIONS                    
                     IN FREE ECONOMIC ZONES                                     
                                                                                
     Article 15. Taxes in the Zone                                              
     1.  The   enterprises  registered  in  the  zone  and  their               
employees shall pay the following taxes and charges:                            
     tax on profits of legal persons;                                           
     income tax of natural persons;                                             
     land lease tax;                                                            
     pollution tax and tax on the use of natural resources; and                 
     state compulsory insurance contributions.                                  
     2. Enterprises  registered and  operating in  the zone which               
are engaged in production activities shall pay  land lease tax at               
a reduced rate of 50%.                                                          
     3. If  a foreign  investor (investors) acquires at least 30%               
of the  authorised (ownership)  capital of an enterprise which is               
registered and  operating in  the zone  and  invests  capital  of               
foreign origin  in the  amount of no less than 2 million USD, the               
enterprise shall  be exempt  from profit (income) tax for 3 years               
after the  enterprise begins  to receive  profit. For  the next 3               
years the  enterprise shall  pay profit (income) tax at a reduced               
rate of 50%.                                                                    
     In order  to implement the right to preferential taxation as               
provided for  by this part, an enterprise must present to the Tax               
Inspectorate  documents  determined  by  the  Government  of  the               
Republic of Lithuania which confirm the origin of foreign capital               
and investment  thereof, and the findings of an independent audit               
concerning the foreign capital investment.                                      
     4. The share of enterprise's profit used for the acquisition               
of required  fixed assets,  for the  carrying out of research and               
for the  introduction of new technology as well as for investment               
in the zone shall not be included in the taxable profit.                        
     5. VAT  shall not  be  calculated and shall not be paid into               
the state budget.                                                               
     6. Dividends  received by  foreign  investors  in  the  free               
economic zone shall be exempt from taxation.                                    
     7. Other  tax privileges shall be applied in accordance with               
the laws of the Republic of Lithuania.                                          
     8. The  zone administration company  shall pay taxes imposed               
on corresponding  enterprises by  the laws  of  the  Republic  of               
Lithuania. Land tax  collected from the zone enterprises shall be               
paid by the zone administration company.                                        
                                                                                
     Article 16. Customs Privileges and Characteristics of                      
               Customs Inspection Activity                                      
     1. Goods  brought into the zone shall be considered as being               
outside the  customs territory  of the Republic of Lithuania with               
respect  to   import  duties   and  charges,  as  well  as  other               
prohibitions and restrictions of economic character.                            
     When goods are transported from the customs territory of the               
Republic of Lithuania into the zone, laws and other legal acts of               
the Republic of Lithuania which regulate the exportation of goods               
abroad as  well as  export duties  and taxes levied on the goods,               
and other  prohibitions and  restrictions of  economic type shall               
apply.                                                                          
     When goods  are brought  into the  customs territory  of the               
Republic of  Lithuania   from the zone, laws and other legal acts               
of the  Republic of  Lithuania which  regulate the importation of               
goods from  abroad as  well as  import duties and taxes levied on               
the goods  and other  prohibitions and  restrictions of  economic               
type shall apply.                                                               
     Goods taken  out of  the zone  abroad shall be considered as               
being outside  the customs territory of the Republic of Lithuania               
with respect  to export  duties and  charges, as  well  as  other               
prohibitions and restrictions of economic character.                            
     Foreign investors  shall have  the right  to transfer abroad               
without restrictions  their lawfully  received  income  (profit).               
Foreign investors  may take  out  of  the  country  their  income               
(profit) or  a part  thereof in  goods purchased  on the domestic               
                                                                                
market  or  reinvest  it  in  the  economy  of  the  Republic  of               
Lithuania.                                                                      
     2.  The  customs  must  inspect  all  persons  and  vehicles               
entering or  leaving the zone  as well as goods taken into or out               
of zone  or placed  therein. Goods shall enter and leave the zone               
only through  entry (exit)  points; the procedure for their entry               
(leaving) shall  be regulated by the Customs Code of the Republic               
of  Lithuania   and  decrees  of  the  Government    Republic  of               
Lithuania.                                                                      
     3.  The  customs  infrastructure  and  projects  of  customs               
buildings that  are under  construction shall be required for the               
designation of  the zone;   projects  of all  infrastructure  and               
other buildings  under construction  which are  required for  the               
designation of  the zone  must be  co-ordinated with  the Customs               
Department under  the Ministry  of Finance in accordance with the               
procedure established  by  the  Government  of  the  Republic  of               
Lithuania.                                                                      
                                                                                
     Article 17. Activities of Banking and Insurance                            
               Institutions in the Zone. Currency and                           
               Financial Conditions                                             
     1. The  activities of  banking and insurance institutions in               
the zone  shall be  regulated by  the Law on Commercial Banks and               
insurance laws of the Republic of Lithuania.                                    
     2. For  settlements litas  and convertible  foreign currency               
may be used in the zone.                                                        
     3. The  procedure  applied  to money  that is brought in and               
taken out  of the  zone shall  be the same as to money brought in               
from abroad or taken out abroad.                                                
                                                                                
     Article 18. Keeping of Records and Accounting in the                       
               Zone                                                             
     Economic entities shall keep  records and conduct accounting               
in the  zone according  to the  effective laws of the Republic of               
Lithuania and other legal acts.                                                 
                                                                                
                                                                                
                            Chapter 5                                           
             LABOUR RELATIONS AND USAGE OF LANGUAGES                            
                    IN THE FREE ECONOMIC ZONE                                   
                                                                                
     Article 19. The Regulation of Labour Relations, Working                    
               Conditions and Social Insurance in the Zone                      
     Issues concerning  labour, safety  at work, state compulsory               
social insurance  and other  issues related  to labour  relations               
shall be  regulated in  the zone  by the  laws of the Republic of               
Lithuania and other legal acts.                                                 
                                                                                
     Article 20. Usage of Languages in the Zone                                 
     The official  language used  in the  territory of  the  zone               
shall be the state language of Lithuania (Lithuanian).                          
                                                                                
                            Chapter 6                                           
       REGULATION OF ECONOMIC RELATIONS WITH INSTITUTIONS                       
         OF THE EXECUTIVE AUTHORITIES AND MUNICIPALITIES                        
                                                                                
     Article 21. Utilisation of Land, Structures, Facilities                    
               of Infrastructure and Natural Resources in                       
               the Zone                                                         
     1. The  relations of  the ownership and lease  of land shall               
be regulated  by the  Law on Land  and the Law on Leasing of Land               
of the Republic of Lithuania.                                                   
     2. Structures  and facilities  of  infrastructure  that  are               
owned by  the state  (municipality) may  be  leased  or  sold  in               
accordance with the procedure established by laws.                              
                                                                                
     3. Natural  resources in  the  zone  may  be  exploited  and               
utilised in  the manner  established by  laws of  the Republic of               
Lithuania.                                                                      
                                                                                
     Article 22. Services Rendered  to the Zones by the                         
               State and Municipalities                                         
     The state  and municipal  institutions shall render the same               
services to  economic entities  operating in the zone as to other               
economic entities operating in their territory.                                 
                                                                                
     Article 23. Activities of Law Enforcement Institutions                     
               in the Zone                                                      
     Law enforcement  institutions of  the Republic  of Lithuania               
shall operate  in the  zone according  to their competence in the               
manner established by the laws of the Republic of Lithuania. Zone               
administration company  shall provide  proper working  conditions               
for these institutions.                                                         
                                                                                
     Article 24. Activities of Supervision Institutions in                      
               the Zone                                                         
     The functions  of the  sanitary and  hygiene,  environmental               
protection, and  utilisation of  natural resources inspectorates,               
fire prevention  , labour and  other state inspectorates shall be               
performed by  the state supervision inspectorates of the Republic               
of  Lithuania   or  local   inspectorates  formed   by  the  zone               
administration company,  the authorisations  of  which  shall  be               
granted by  a respective  state inspectorate  of the  Republic of               
Lithuania.                                                                      
                                                                                
     Article 25. Activities of the Parties and NGOs in the                      
               Zone                                                             
     The activities  of the  parties and NGOs shall be prohibited               
in the zone.                                                                    
                                                                                
                                                                                
                            Chapter 7                                           
                  ENTRY INTO FREE ECONOMIC ZONE                                 
                                                                                
     Article 26. Entry Procedure into the Zone                                  
     1. Foreign  nationals  and  stateless  persons,  permanently               
residing abroad,  who want  to enter  the  zone  must  obtain  an               
invitation from   the  zone administration  company and a visa of               
the Republic of Lithuania issued in accordance with the procedure               
established by the Government of the Republic of Lithuania.                     
     2. Foreign  nationals  and  stateless  persons,  permanently               
residing abroad  and having no  permanent residence permit in the               
Republic of  Lithuania may  come for temporary employment  in the               
zone enterprise  only when  they  have  an  invitation  from  the               
concrete employer  of  the  zone  enterprise,  who  has  obtained               
licences from  the Lithuanian  Labour Exchange in the Ministry of               
Social  Security  and  Labour  to  employ  a  certain  number  of               
foreigners.                                                                     
     3. Permits  for temporary  employment of  foreigners in  the               
zone  enterprises  shall  be  issued  by  the  Lithuanian  Labour               
Exchange in  compliance with  the quotas  and procedure  for  the               
employment of  foreigners, established  by the  Government of the               
Republic of  Lithuania. This  procedure shall apply to foreigners               
who come  for temporary  employment, if   inter-state  and inter-               
governmental agreements  of the  Republic  of  Lithuania  do  not               
provide otherwise.                                                              
     4. The  procedure for  the issuing  of  licences  to  employ               
foreigners,  the  employment    of  foreigners,  registration  of               
foreigners, refusal  to issue  licences to employ a foreigner and               
permits to  work in  the Republic  of Lithuania,  as well  as the               
procedure for  the cancelling of these permits and licences shall               
be established by the Government of the Republic of Lithuania.                  
     5. Requirements  set forth  in par.  1,2, 3,  and 4  of this               
Article shall not apply to foreign nationals or stateless persons               
who come to the zone on the invitation of the zone administration               
company to work as managers of enterprises or members of the zone               
administration company, or experts.                                             
     6. Upon  arrival to  the zone,  persons must  get registered               
within 24  hours in  accordance with the procedure established by               
the Government  of the  Republic of  Lithuania. If  such   person               
fails to  get registered  within this  time limit,  he  shall  be               
subject to  sanctions provided for in the laws of the Republic of               
Lithuania.                                                                      
     7. The  zone enterprises or the zone administration company,               
which  have  employed  foreigners,  must  within  3  days  inform               
migration agency of the local police commissariat.                              
     8. It  may be provided in the statutes of the zones that the               
zone administration company may act as mediator in  issuing visas               
to foreigners  for going through the territory of the Republic of               
Lithuania from  the border crossing posts to the territory of the               
zone. In  such case,  the same checking regime as established for               
border crossing  posts shall  be established  at the  entry point               
into the zone.                                                                  
     9. The  citizens of  the Republic  of  Lithuania  and  other               
persons shall  be allowed  entry into  the  zone  upon  producing               
permits issued  in accordance  with the  procedure established by               
the zone administration company.                                                
     Persons who entered the zone in violation of the established               
procedure shall  be liable  under the  laws of  the  Republic  of               
Lithuania.                                                                      
                                                                                
                                                                                
                            Chapter 8                                           
                  STATE GUARANTEES TO INVESTORS                                 
                     INTO FREE ECONOMIC ZONE                                    
                                                                                
     Article 27. State Guarantees for the Functioning of the                    
               Zone                                                             
     1. Foreign  investments, legally  earned  profit  ,  income,               
dividends, rights and legitimate interests of the investors shall               
be protected by the laws of the Republic of Lithuania.                          
     2. The  system of  state guarantees  of investment  security               
shall apply  to all  economic entities  engaged in  economic  and               
commercial activities  as well  as other  activities in the zone.               
The state  shall guarantee  the economic  entities the  right  to               
bring in the zone and to take out of the zone and the Republic of               
Lithuania capital and profit.                                                   
     3. Foreigners  shall be guaranteed the right to own  100% of               
the assets of an enterprise operating in the zone.                              
     The terms  and conditions for the investment of   capital of               
foreign origin   or the existence of investments shall not change               
for five  years from  the beginning  of  investment  for    those               
investors who  invested the   capital  of foreign origin owned by               
them by  the right  of ownership  according to  the procedure and               
conditions established  at the  time a  relevant   law    was  in               
effect.                                                                         
                                                                                
                            Chapter 9                                           
        SETTLEMENT OF DISPUTES CONCERNING THE ACTIVITIES                        
       OF THE ZONE ENTERPRISES OR THE ZONE ADMINISTRATION                       
                             COMPANY                                            
                                                                                
     Article 28. Procedure for the Settlement of Disputes in                    
               the Zone                                                         
     Disputes arising  between the  zone  enterprises,  the  zone               
enterprises  and   the  zone  administration  company,  the  zone               
administration  company   and  state   institutions,   the   zone               
administration company  and the  state institution authorised  by               
the Government  of the  Republic of  Lithuania to  perform  state               
supervision  of   the  free   economic  zones,   concerning   the               
compensation for  the change  of conditions  of the activities of               
zone enterprises,  as well  as other disputes shall be settled in               
accordance with  the procedure  established by  the Civil Code of               
the Republic of Lithuania.                                                      
                                                                                
                                                                                
                           Chapter 10                                           
              LIQUIDATION OF THE FREE ECONOMIC ZONE                             
                     AND THE ZONE ENTERPRISE                                    
                                                                                
     Article 29. Procedure for the Liquidation of the Zone                      
               Enterprise                                                       
     1. The  zone enterprise  may be  liquidated on the following               
grounds:                                                                        
     the decision of the owner of the enterprise to terminate the               
activities;                                                                     
     the decision  of the court or creditors meeting to recognise               
the enterprise as bankrupt;                                                     
     the decision  adopted by  relevant    state  institutions to               
revoke the  registration of  the enterprise  for the violation of               
law provided  for in  this Law  or other  Laws of the Republic of               
Lithuania, the  statute of  the zone,  the  bylaws  of  the  zone               
enterprise,  and  the  agreement  with  the  zone  administration               
company;                                                                        
     failure to  carry out  economic-commercial activities in the               
zone  for more than one year;                                                   
     the fact  established by  law enforcement  institutions that               
illegally  acquired   capital  has  been  invested  in  the  zone               
enterprise, or  illegally acquired  money is  being used  in  the               
activities of the enterprise; and                                               
     on other grounds provided for in the laws of the Republic of               
Lithuania.                                                                      
     2. The  zone enterprise  shall be  liquidated   according to               
the procedure  established by  the  Law  on  Enterprises  of  the               
Republic of Lithuania.                                                          
                                                                                
     Article 30. The Procedure for the Liquidation of the                       
               Zone                                                             
     1. Free  economic zone  shall be  deemed liquidated upon the               
expiration of  the period  for which it was established, provided               
its activities  are not extended by the Seimas of the Republic of               
Lithuania.                                                                      
     2. The  zone may be liquidated by the Seimas of the Republic               
of Lithuania  prior to  the expiration of the period for which it               
was established  in cases  recognised  as    international  legal               
grounds.                                                                        
     3. The  Government of the Republic of Lithuania shall form a               
liquidation commission  for the  settlement of property and other               
issues related  to the liquidation of the zone, and the financial               
relations between  the economic development and management bodies               
of the  zone and the subjects of economic activities operating in               
the zone,  which shall  be authorised   to  administer   the zone               
until final  settlement of all issues concerning  the liquidation               
of the zone.                                                                    
     4. Disputes  over the  liquidation  of  the  zone  shall  be               
settled in the courts of law of the Republic of Lithuania.                      
                                                                                
     I promulgate this Law,  passed by the Seimas of the Republic               
of Lithuania.                                                                   
                                                                                
                                                                                
Algirdas Brazauskas                                                             
President of the Republic                                                       
                                                                                
Vilnius                                                                         
28 June 1995                                                                    
No.  I-976