The government policy of Latvia on foreign investment and the role of the Investment and Development Agency of Latvia have been instrumental in attracting and facilitating foreign investments. The country has made significant progress in improving its investment climate and drawing investors from various sectors. The recent investments of importance, such as Accenture's investment in Latvia, the growing renewable energy sector, and the success of the logistics and transportation projects, demonstrate the positive impact of these policies and LIAA's efforts. As Latvia continues to prioritize and streamline foreign investment initiatives, it can expect to further enhance its economic growth and development, offering new opportunities for both local and international investors. Ultimately, the success of these efforts will contribute to a more prosperous and globally competitive Latvia, fostering an environment of innovation, collaboration, and sustainable progress.
Government Policy on Foreign Investment
The Latvian government has implemented various policies to create a favorable climate for foreign investment, focusing on the following key areas:
- Investment Protection: Latvia has signed bilateral investment treaties (BITs) and free trade agreements (FTAs) with numerous countries, which provide guarantees against expropriation, nationalization, and discrimination, and ensure fair and equitable treatment for foreign investors.
- Investment Incentives: The government offers a range of incentives to attract foreign investment, including tax breaks, exemptions on import duties, and access to preferential financing. These incentives target investments in priority sectors such as manufacturing, infrastructure, renewable energy, and research and development.
- Liberalization and Simplification of Procedures: The Latvian government has implemented measures to liberalize and streamline administrative procedures, reduce bureaucratic obstacles, and enhance transparency. These efforts aim to improve the ease of doing business in the country and make Latvia an attractive destination for foreign investors.
The Role of the Investment and Development Agency of Latvia (LIAA)
LIAA is the official government agency responsible for promoting and facilitating foreign investment in Latvia. LIAA plays a crucial role in implementing government policies and strategies aimed at attracting foreign investment. Key functions of LIAA include:
- Providing information and support to potential investors: LIAA serves as a liaison between foreign investors and the Latvian government, offering relevant information about investment opportunities, incentives, and the overall investment climate.
- Facilitating investment procedures: LIAA assists investors in obtaining the necessary permits, licenses, and approvals required to set up a business in Latvia. It also helps navigate the administrative processes and provides support throughout the investment lifecycle.
- Advocating for policy improvements: LIAA engages with stakeholders, including investors, government agencies, and business associations, to identify areas for improvement and advocate for policy reforms that enhance the investment climate.
Recent Investments of Importance
Latvia has witnessed a consistent influx of FDI in recent years, with several significant investments contributing to the country's economic growth. Some noteworthy investments include:
- Investments in the Information Technology Sector: In 2019, Accenture, the global consulting and professional services company, announced its plans to open a new center for advanced technology in Latvia, creating over 200 jobs in the country.
- Investments in the Renewable Energy Sector: Latvia's renewable energy sector has attracted numerous investments from global companies, including Enefit Green's €289 million investment in a wind farm project, which has the potential to generate up to 287 MW of electricity.
- Investments in the Logistics and Transportation Sector: In recent years, Latvia has attracted major investments in the logistics and transportation sector, including DPD Group's €30 million investment in a new parcel distribution center in Riga.