Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Last Published: 2/28/2019

The Latvian economy is based on service industries including transportation, information technology, and financial services.  The construction industry also plays an important role, as do wood and forestry products, food processing, metalworking, and light industries (e.g., textiles).  Tourism has been growing rapidly.

Latvia implemented a new corporate income taxFrom 1 January 2018 Latvia has a new corporate income tax system in place, under which retained earnings are exempt from CIT and only distributions are taxed.  The CIT rate on gross distributed profits is 20%.   The country is well connected by more than 80 direct flights to all major European cities and plenty of connecting flights.  Latvia’s state-owned national air carrier, airBaltic, has made Riga a regional hub.

During the 2014-2020 period, the Latvian government will administer approximately $6.1 billion of EU structural funds.  The Latvian government provides several incentives for investment including in the areas of taxes, labor, research and development, and state credit guarantees.   Please see the website of Latvian Investment and Development Agency (LIAA) for detailed information on the available incentives and tax allowances. The European Bank for Reconstruction and Development (EBRD) operates in Latvia out of its regional office in Vilnius, Lithuania.  Latvia qualifies for U.S. Export Import Bank (ExIm) financed projects.

Good opportunities exist for expanding trade in various sectors including energy, computers, forestry, farming, woodworking equipment, transportation (including aviation), and agricultural products.
 

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