As a thriving democracy, Latvia has consistently pursued liberal economic policies, and it welcomes investments that foster the principles and benefits associated with free markets.
With its relatively small population, Latvia is not a major market, but the country's key advantage is its location, which provides access to its immediate neighbours. The population of the three Baltic States totals almost 7 million, approximately equal to the population of Sweden. On its doorstep are the Scandinavian countries, with 245 million people, Russia and the independent CIS states, with a combined population of 280 million, and Eastern Europe with 100 million inhabitants.
Latvia's main asset is its well-educated workforce, as the country has one of the world's highest number of student per capita. Latvia's skilled and multi-lingual workforce, abundant natural resources, and strategic location form a solid foundation for the country's economy and make Latvia the ideal place to develop your business.
In the last decade the economy in Latvia has been growing rapidly leaving behind many Western European countries. Despite the global economic crisis the Latvian Government has worked towards a clear programme of economic stability, recovery and even stronger further growth with the help of International Monetary Fund and European Commission.
It includes the reorganisation of public sector to reach higher cost efficiency and provide supportive business environment to attract foreign direct investments as well as to promote small and medium size businesses.
Latvia is business friendly and cost effective, provides easy access to a highly qualified workforce, has reliable infrastructure and international recognition and follows international standards.
Secure business environment:
- Open market economy: EU, NATO, WIPO, WTO membership.
- Clearly defined government policy to strengthen the national economy.
- National strategy for investment promotion – Polaris process :
- Coordinated cooperation between public, private and academic sectors.
- Science and knowledge management.
- Increased support for promising sectors.
- Assistance throughout project implementation.
- Active dialogue with the Foreign Investor's Council in Latvia.
Business friendly environment.
Latvia ranked 23rd in the World for ease of doing business (World Bank Report, "Doing Business", 2015). • With only 7 payments necessary to pay all taxes, Latvia is ranked as No.24 in Tax Payments out of 183 countries globally (by PwC and the World Bank, 2015).
Transparent legal and judicial system, lawful treatment of foreign investors (by law foreign investors have the same rights and duties as local investors).
Competitive tax system (CIT 15% - amongst the lowest in Europe). • Four Special Economic Zones *:
– Corporate tax discounts (as high as 80%, CIT in SEZ - 3%)
– 0% VAT and no customs duties
(*) Free Port of Ventspils ramked 5th in the world in terms of its economic potential, cost effectiveness, facilities, transportation, incentives, and other parameters, according to the FT's FDI Magazine's survey of "Global Pree Zones of the Future 2010/2011". Specifically in terms of cost effectiveness, Ventspils ranked 4th in the world and Rezekne Special Economic Zone ranked 6th in this survey).
Access to Knowledge and Skills.
– Highly educated and multi-lingual workforce, ready to take on new challenges and well motivated. • Northern European culture and work ethic.
– Business knowledge and experience dealing with Russia / CIS.
– Country with most foreign languages spoken per-capita in the EU, according to Eurostat.
Gateway to EU and to the East of Europe.
– European Union border with Russia, making it ideal for east/west trade.
– Three ice-free international ports integrated with well developed transport infrastructure to the East, including a reliable and developed railway system (used by the U.S. and other NATO countries to deliver non-military supplies directly from ships through Latvian ports to Afganistan, and transit to eastern countries (regularly scheduled container block trains to Moscow and Kazakhstan).
– One of the fastest growing airports in Europe, leading air transportation hub in the region with more than 80 direct connections providing convenient accessibility for business and leisure travel.
– Highly developed communications infrastructure:
- Latvia ranks 4th globally by download speed 26.35 Mb/s and upload speed 16.38 Mb/s (by The Global Broadband Speed Test).
- Latvia ranks 7th globally by average measured internet connection speed 13.5 Mb/s (by State of the Internet report by Akamai, Q2, 2014).
Cost Effective.
– Riga, capital of Latvia - ranked as the Best Large European City for Cost Effectiveness by FDI Magazine "European Cities and Regions of the Future 2010/11.". Three other cities in Latvia ranked in the top 3 for Micro European City for Cost Effectiveness.
– Competitive labor costs, relatively low in comparison with the U.S. and Western Europe.
– Competitive real estate costs and taxes.
– High productivity - Latvia is a leader among other EU countries with regard to wage adjusted labor productivity (highest value for each wage dollar).
– Stable, single currency - euro, since January 1, 2014.
Quality of Life.
– Apart from being the capital of Latvia and the largest city in the three Baltic States, Riga is also Europe's capital of art nouveau architecture and one of the "greenest" cities in the region.
– Historic Center of Riga is included in the UNESCO World Heritage List.
– Riga in 2014 was European Capital of Culture.
– World Class Opera house, theatres, thriving natural beauty and eco-tourism.
– Latvia has all the conveniences that business people and families need, including services and amenities (international schools and universities, modern and accessible medical care).
Forms of Business Organisation.
To start up commercial activities, the merchant (komersants in Latvian) is required to register in the Commercial Register. Forms of business organisation include individual merchants (sole trader), partnerships (general and limited partnerships) and capital companies (limited liability company – SIA and joint stock company – A/S). The most widely used form is the limited liability company which limits the liability of the shareholders to the amount of their investment in the share capital.
Foreign investors intending to expand their business in Latvia may register a branch or representative office. Branch is territorially or otherwise separated from the organisation and can be established by local and foreign organisations to carry out commercial activities. The representative office may only be set up by foreign organisations to represent and promote the organisation and carry out market researches, but is not entitled to carry out commercial activities.
Learn more at: www.ur.gov.lv
Latvian Investment and Development Agency.
For more than 15 years the Investment and Development Agency has provided support for local businesses and foreign investors to increase the competitiveness and promote further foreign investment. The Investment and Development Agency helps to find partners or locations in Latvia for overseas businesses and assists in administrating the State support programmes co-financed from EU Structural funds.
Learn more with: www.liaa.gov.lv
Register of Enterprises of Republic of Latvia.
The Register of Enterprises of the Republic of Latvia registers enterprises and administrates the information according to the Latvian legislation. It also registers mass media, public organisations, commercial pledges, decisive influences, marriage contracts, public and private partnership agreements, religious organisations, political parties, trade unions, arbitrages and processes of insolvency.
Learn more with: www.ur.gov.lv
State Revenue Service.
TState Revenue Service is a government organisation set up to implement taxation and customs policy. All enterprises must be registered with the State Revenue Service and report on their taxable income on a regular basis.
Learn more with: www.vid.gov.lv
Foreign Investors’ Council in Latvia.
The Foreign Investors’ Council is a non-governmental organisation that brings together the largest foreign investors to discuss regularly at the governmental level the ways in which the business environment and investment climate in Latvia can be improved.
Learn more with: www.ficil.lv
Latvian Chamber of Commerce & Industry.
Latvian Chamber of Commerce and Industry is a members’ organisation which brings together Latvian companies from various business sectors with the aim of improving the business environment. It also assists local enterprises to promote their services.
Learn more with: www.chamber.lv
Success Stories.
International investors and companies recognize Latvia as a favourable location for business, enabling them to be more competitive in the global marketplace. Companies from around the world enjoy Latvia’s business environment, gaining advantage from a broad range of benefits and opportunities—including cost efficiencies, strategic access to new and large markets, a skilled workforce and a developed infrastructure.
As the following select companies attest, Latvia offers a strategic place for operations, suited to develop high value-added goods and services, especially for export. These companies have established various types of operations in Latvia, including manufacturing sites, shared services center, IT development teams and others. They produce a host of different products and services in a variety of industries. These and other companies continue to thrive here, creating a strong environment for business and opportunities for further growth—both for themselves and for future investors
Learn more with: www.liaa.lv
World bank This page summarizes Doing Business data for Latvia. It includes rankings, data for key regulations and comparisons with other economies. www.doingbusiness.org
This economy profile presents the Doing Business indicators for Latvia. www.doingbusiness.org