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Why is Latvia an Attractive Country for Foreign Investors?
Updated on Thursday 17th June 2021
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Latvia is a country that supports foreign direct investments and at the same time offers a multitude of investment opportunities. The main sources for foreign direct investment flow have been the Baltic countries, however, more foreign investors are seeing the opportunities in business sectors like manufacturing, healthcare, logistics and IT and a number of other areas for investments.
Our team of company formation agents in Latvia can assist foreign investors who wish to open a company in Riga or another Latvian city.
Latvia’s main benefits for foreign investors
The list below highlights the main reasons why Latvia is an attractive country for foreign entrepreneurs:
- • Business climate: a quick and unbureaucratic process is in place for those who want to open a company in Latvia.
- • Business costs: competitive real estate and labor costs are available in Latvia; what’s more, a number of business incentives are also available in certain economic zones, for research and development and in other cases.
- • Good infrastructure: the country has developed business centers and good transport and logistics services.
- • Skilled workforce: Latvian workers are highly skilled and motivated, making it easy for foreign investors to recruit employees.
Latvia’s geographical location, near the Baltic states and Russia, makes it a country that also offers a favorable position to base a trade or transport business. In terms of foreign direct investments, the country offers freedom of establishment and complete company ownership.
Foreign investment details in Latvia
Some of the most popular business sectors in Latvia include financial and insurance, wholesale and retail trade, real estate, manufacturing, transportation, logistics and storage, construction, information, and communication as well as other activities.
Among the countries accounting for the highest percentage of foreign direct investment in Latvia, we can include Sweden, Estonia, the Netherlands, Luxembourg, Switzerland, the United Kingdom.
The main business entity types in Latvia are the limited liability company or SIA, the joint stock company or AS, the limited and the general partnership as well as the foreign branch.
Our team of Latvia company formation agents can give you more details about each of these business types as well as the steps for company registration.
The most appealing sectors to invest in Latvia
Foreign businessmen who want to come and invest in Latvia by starting a business have several economic sectors they can choose based on their experience or contribution to the national economy. The better part is that they can also select new industries, such as fintech, that lay the path for the development of new markets.
Here are some of the most developed economic sectors in Latvia at the moment:
- - IT and business-related services;
- - healthcare and life science;
- - transport and storage;
- - environmental technology;
- - engineering.
If you want to open a company in Latvia, our specialists are at your service with tailored services.
Why invest in IT in Latvia?
Latvia is currently one of the most important exporters of computers and IT equipment among the Baltic states. This has led to its development in a quick period of time, so investors who plan to invest it will find a mature market and the infrastructure that can be used without any further investments.
According to statistics:
- - Latvia had the 16th fastest internet speed at worldwide level in 2019;
- - it was also the 3rd country in the world to use mobile internet;
- - Latvia also ranks 4th in e-government among EU countries
- - most importantly, Latvia was one of the first countries in the world to have a 5G network.
Latvia is known for its research and development capabilities and interest in coming with modern solutions to matters of international interest. The main sub-sectors of this industry are IT support, software development, Artificial Intelligence and automation, Cloud solutions, telecommunications.
Latvia also has one of the most educated population when it comes to using e-services, as well as around 7,000 IT companies with 37,000 employees.
Setting up an IT company in Latvia can be done with the help of our local advisors.
The biomedical sector in Latvia
One of the most appealing innovative sectors one can choose to invest in Latvia is biomedicine with its most important branches: life sciences, healthcare and pharmacy.
Biomedicine occupies one of the fist positions among the most important industries contributing to Latvia’s Gross Domestic Product mainly thank to the fact that most of the medicines are exported to countries like Japan, Germany, the United States, and Canada. However, most Baltic states import pharmaceutical products from Latvia.
Innovation plays a very important role in all Latvian industries, which is why setting up a biomedical business here can represent one of the most solid ventures that can expand in the entire block of the European Union thanks to the fact that the country is a member state, therefore, it benefits from the harmonized legislative framework.
Our company formation specialists in Latvia can help you set up a business in the biomedical industry and connected sub-sectors.
The startup ecosystem in Latvia
As one of the most technologically advanced countries in Europe, Latvia has one of the most prolific startup ecosystems on the Old Continent.
There are more than 400 startups based in Latvia thanks to the high number of institutional investors, but also business angels interested in investing in young entrepreneurs with a vision for the future. Latvia offers plenty of business incubators and such companies benefit from important governmental support.
The most recent development in this sense was passing the Startup Law with its Startup Visa program under which Latvian residency can be obtained through opening such a venture.
If you want to invest in Latvia by creating a startup company, you can rely on our full support.
The workforce – one of Latvia’s most valuable resources
Those who choose to open companies in foreign countries usually have various aspects in mind and apart from taxation, the workforce is one of the most important factors they count on when making decisions. Luckily, those who choose to invest in Latvia can have access to the local workforce which is well-educated and cheaper compared to that of West European countries.
Approximately 64% of Latvia’s population represents the workforce of this country, while 61% of them are active on the labor market.
When it comes to education, approximately 40% of the young population chooses to follow vocational or technical institutions in order to receive professional education, while the remaining 60% choose standard courses. This is the main reasons there is a balance between highly skilled persons and professionals in certain fields, such as manufacturing and even railroad construction.
If you want to invest in Latvia and need information on the employment legislation or even hiring foreign workforce, our specialists are at your disposal. We also offer various employment-related services.
Contact our agents who specialize in company registration in Latvia for more information about foreign direct investments.
Meet us in Riga
Call us now at +372 51 50 803 to set up an appointment with our lawyers in Riga, Latvia. Alternatively you can incorporate your company without traveling to Latvia.
As a Bridgewest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Latvia.
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