The Latvian government has implemented a series of policy measures to make Latvia a more attractive country on the global market.
An event about Latvia's future took place on Tuesday October 6 in Stockholm. This event was jointly organized by the Latvian Embassy in Sweden and the Investment and Development Agency of Latvia (LIAA), in connection with the Baltic Development Forum.
Latvia's Economy Minister Mr. Artis Kampars open the Event
The choice of industries that were discussed at the Forum - transportation and logistics, advanced manufacturing and woodworking not only show the areas where there are potentials for Swedish investors in Latvia. It also highlights some of the sectors of the Latvian economy which are bound to serve as the fundament of Latvia’s international competitiveness in the future
The wages have gone down 30-40 percent over the past year. Unemployment is high but the education-system in Latvia is of great standards. A major benefit in Latvia is that the country's inhabitants have very good language skills. Over 70 percent of all Latvians under the age of forty speak English. In addition, many also have knowledge of Russian (80 percent) and German.
Riga is of course the city where most companies are being established. However, we were given a presentation about a tax free zone, Liepaja, a city located west of Riga. It is unique that a coastal town becomes a tax free zone; they tend to be located in towns or rural areas.
Mr. Jânis Lapiòð, Deputy Manager of Liepaja Special Economic Zone Authority Liepeja.
In Liepaja there is a huge technology park where there are significant opportunities for industry-companies to make an establishment. The costs for employees are low and the taxes for companies wishing to establish themselves in the park are basically zero. Here we have an advantage against China's technology parks and that is that shipments will be closer and the costs for that will therefore stay low.
Sweden is Latvia's fifth largest trading partner, and now Latvia is trying to attract more Swedish companies. In Latvia, the situation is in need of pursuing new strategies and the goal is to reach the Euro zone in 2014.
Until 2007, Latvia was one of the economies that grew most rapidly in europe, and they warmly welcome foreign companies. An industry they are now investing in is high-tech. However, there are other interesting areas such as tourism, pharmaceuticals, banks, building and construction works. It should be added that Latvia has a low corporate tax - 15 percent.
The countries that Latvia imports the most from are the following:
Sweden (14 percent), Denmark (8 percent), Germany (8 percent) and Finland (5 percent)
Latvia's main countries for exports are the following: Lithuania (15 percent), Estonia (13.4 percent), Germany (9.3 percent), Russia (7.9 percent) and Sweden (7.1 percent)
Foreign companies have the same legal rights as Latvian companies and it is an effective establishment process.
Latvia is high on the list of which countries it is easiest to do business with. In the first place is Singapore, second New Zealand and third the United States. Latvia is number 29 which is still high.
What might attract the most in Latvia are the economic zones where there are tax benefits. Riga is the Baltic region's largest city, but Ventspils, Jekabpils, Jelgava, Valmiera and Davgavpils are popular areas for doing business as well.
Cecilia Helland