Imagine a country where medieval history meets cutting-edge innovation, where lush green forests intertwine with world-class Art Nouveau architecture, and where the opportunity for growth is as abundant as the natural beauty.
Welcome to Latvia, a gem located on the eastern shores of the Baltic Sea. Though it may not command the size of its neighbours, this small but mighty nation punches well above its weight. It’s a country where every corner tells a story – from the cobbled streets of Riga’s Old Town to the pristine shores that stretch along its 513-km coastline.
Latvia isn’t just a country you pass through; it’s a country that opens doors – whether you’re a filmmaker searching for the perfect backdrop, an entrepreneur looking for a seamless setup, or an investor eager to capitalise on a booming economy. It’s the place where ideas meet strategic opportunities, a perfect gateway between East and West. And did we mention the tax incentives? Latvia’s Special Economic Zones are calling, offering some of the most competitive rates in Europe.
From the bold new Mission Sea 2030 to the stunning Riga Waterfront development, Latvia isn’t content to rest on its laurels – it’s forging ahead with a vision that puts sustainability, digitalisation, and innovation at the forefront. So, whether you’re here to build your empire or simply to enjoy the rich Latvian culture, one thing is clear: Latvia is ready for you.
Where is Latvia?
Latvia, a parliamentary republic, sits at the crossroads of Northern and Eastern Europe, with its eastern shores washed by the Baltic Sea. Its neighbours include Estonia to the north, Russia and Belarus to the east, Lithuania to the south, and a maritime boundary with Sweden to the west. Spanning a coastline of 513km, Latvia is home to nearly 2 million people, with almost half residing in and around its vibrant capital, Riga. Often referred to as the metropolis of the Baltic region, Riga is not only the largest city but also the heart of Latvia’s economy. Daugavpils, the second-largest city, boasts a population of about 79,000.
While Latvia may not be a vast market in terms of population, its strategic location is its real gem. Nestled in the Baltic, the country provides direct access to three neighbouring states with a combined population of 6 million – on par with Denmark. Just beyond its borders lie the Scandinavian countries, with a market of 25 million, and to the east, another 100 million people in Eastern Europe. Latvia’s strong infrastructure, abundant natural resources, and skilled multilingual workforce position it as a gateway to both the East and West, making it an ideal base for any investor with global ambitions.
The big business play
Enter Mission Sea 2030, Latvia’s plan to restore and safeguard the Baltic Sea – one of the world’s most polluted bodies of water. With climate change and pollution looming as global threats, Latvia’s approach is to champion a circular economy and spearhead innovative, sustainable projects to tackle these issues head-on. The goal? Clean up the Baltic Sea while setting a new standard for digitalisation and sustainability in the region.
At the heart of this mission are several pioneering initiatives, including the MissionSea Accelerator, Digital Twin, and City to Sea. The MissionSea Accelerator drives innovation through hackathons, prototyping, and training, pushing forward creative solutions for the Baltic’s future. Digital Twin offers a virtual model to monitor and manage the ecosystem’s evolution. Meanwhile, City to Sea brings together participants from 18 different countries in a collaborative effort to develop groundbreaking ideas for marine sustainability. Through these initiatives, Latvia is shaping a sustainable future, not only for itself but for the entire Baltic region.
How’s the economy?
Latvia’s economy is no stranger to peaks and troughs. In the mid-2000s, the country boasted one of Europe’s highest GDP growth rates, with average annual growth exceeding 10 percent between 2005 and 2007. Foreign capital flowed in, consumption surged, and Latvia appeared unstoppable. But by 2008, the bubble had burst. The real estate market collapsed, private debt soared, and the country was plunged into a severe recession. GDP nosedived by 25 percent, external debt nearly doubled, and employment plummeted by 16 percent, with wages for those still employed falling by 12 percent.
Despite this, Latvia has proven resilient. By 2010, the country had bounced back, with exports playing a critical role in its recovery. Between 2011 and 2013, GDP growth averaged 4.4 percent annually, and by 2021, the economy had grown by 4.5 percent, spurred on by improvements in the external environment, investment, and rising employment and wages. Latvia’s economy is highly open, with trade heavily intertwined with its European neighbours.
The European Union remains Latvia’s key trading partner, accounting for 67 percent of total trade, with Lithuania, Estonia, the United Kingdom, Germany, and Russia among its largest export markets. On the import side, Lithuania, Germany, Poland, Russia, and Estonia dominate. Although sanctions and economic struggles in Russia have impacted Latvia’s exports in recent years, Latvian businesses have shown agility, shifting focus to more distant markets such as India, Japan, and Egypt, securing their place in the ever-evolving global economy.
Are there any tax incentives?
Latvia offers a range of tax incentives through its five Special Economic Zones (SEZs), making it an attractive destination for businesses seeking to maximise their profitability. These zones include the Riga Free Port, Ventspils Free Port, Liepaja Special Economic Zone, Rezekne Special Economic Zone, and the Latgale Special Economic Zone. Each zone operates under a framework designed to provide significant financial advantages to companies based there.
One of the standout benefits is an impressive rebate of up to 80 percent on real estate tax, which stands at 1.5 percent in Latvia. Additionally, businesses can enjoy an 80 percent rebate on corporate income tax, offering substantial relief on their operational costs. Moreover, there’s an 80 percent rebate on withholding tax, which covers dividends, management fees, and payments for the use of intellectual property by non-residents. The exact rate of withholding tax varies depending on the nature of the payment, but the incentives across the board make these SEZs highly appealing for businesses looking to invest in Latvia.
Each SEZ – Riga, Ventspils, Liepaja, Rezekne, and Latgale – has its own unique advantages and can be explored further via their dedicated websites. In essence, Latvia’s SEZ framework is a strategic advantage for companies aiming to enhance their financial efficiency and growth potential.
Latvia as a filming location
For filmmakers seeking unique and versatile locations, Latvia stands out as a prime destination. Foreign directors interested in filming here can tap into a range of opportunities, including co-financing grants from the National Film Centre and the Riga Film Fund. The Riga Film Fund extends support for productions filmed across the country, with an added incentive for projects shot in the capital itself, offering additional co-financing percentages.
The second round of co-financing applications is set to open this autumn, and with Latvia’s rich history of international collaborations, success stories abound – such as the German mini-series Sisi, which transformed Riga into a cinematic backdrop. Latvia is also home to a burgeoning film industry, with 195 registered producers and studios on record as of 2021.
How easy is it to set up a company?
Setting up a company in Latvia is remarkably straightforward. All businesses must be registered with the Commercial Register, and to gain legal status, founders need to submit a few key documents: A foundation agreement (or decision of foundation for single founders), articles of association, and proof of a legal address. Alongside this, receipts confirming the payment of registration duties and the publication fee for an announcement in the official newspaper Latvijas Vēstnesis must be included. The registration fee itself depends on the type of business chosen.
The efficiency of Latvia’s registration process is another boon for entrepreneurs. The Register of Enterprises guarantees to review and process applications within three days, or within just one day if you’re willing to pay a premium fee. In short, it’s possible to get your business up and running in Latvia in as little as 24 hours.
Getting entry, work, and residence permits
Under Latvia’s Immigration Law, foreign nationals may enter and reside in the country with a valid travel document. For stays longer than 90 days within a six-month period, a visa or residence permit is required. Since Latvia joined the EU, citizens from other EU member states don’t need visas or residence permits, though they must obtain a registration card from the Office of Citizenship and Migration Affairs if staying beyond 90 days.
Visas
As a member of the Schengen Agreement for nearly 15 years, Latvia allows visa-free travel for Schengen member-state citizens, while those holding a valid Schengen visa can also travel freely within the country. For non-Schengen nationals who require a visa to enter Latvia, an application process is required. If a foreign national is employed by a Latvian entity, an invitation from their employer is mandatory, and employment contracts or work-performance contracts must be in place.
Work permits
Work permits, issued by the Office of Citizenship and Migration Affairs, are required for foreign nationals intending to work in Latvia. Employers must first register the job vacancy with the State Employment Agency (SEA) a month prior to applying for a visa invitation or residence permit sponsorship. If a foreign national works for multiple employers or in different positions, separate work permits are necessary.
For short-term employment not exceeding 90 days within six months, work permits are granted according to visa validity. Latvia’s streamlined process ensures that talent from around the globe can contribute to its growing economy with minimal bureaucracy.
Residence permits
In Latvia, residence permits grant foreign nationals the right to stay in the country for periods exceeding 90 days within a six-month span, whether temporarily or permanently. Self-employed individuals, members of company boards or supervisory councils registered in the Commercial Register, and representatives of foreign companies involved in branch activities are among those eligible to apply for residence permits.
Other qualifying circumstances are outlined in the Immigration Law. However, it’s important to note that temporary residence permits for Russian and Belarusian citizens are currently suspended, with limited exceptions for situations such as family reunification and employment.
Personal income tax
When it comes to personal income tax, Latvian residents are taxed on their global income, while non-residents are only taxed on their Latvian-sourced income. Latvia operates a tiered system for personal income tax, with rates set at 20 percent, 23 percent, and 31 percent from January 2021, applicable to employment and other income types, excluding capital gains. This progressive tax structure ensures that income earned at different levels is taxed fairly.
What’s it like to live in Latvia?
Living in Latvia, and particularly in its capital Riga, offers a blend of cultural vibrancy and natural beauty that’s hard to match. As the largest city in the Baltic States, Riga is known not only for its stunning Art Nouveau architecture but also for its reputation as one of the ‘greenest’ cities in Europe. Entertainment options abound, catering to every taste and age group – from chic clubs and stylish restaurants to cinemas, theatres, and exhibitions. For families, there’s the zoo and the enchanting open-air museum.
At the heart of Riga lies the Latvian National Opera and Ballet, a proud symbol of the nation’s cultural renaissance. This architectural gem regularly hosts world-class orchestras, opera, and ballet performances, attracting renowned artists from across Europe. It’s a must-visit for any culture lover.
Riga’s Old Town, a UNESCO World Heritage Site, is a treasure trove of history and culture, offering a unique blend of Lutheran, Catholic, and Orthodox churches, a synagogue, and a diverse array of international restaurants and lively Irish and British pubs, all within a stone’s throw of one another.
Latvia’s culinary scene is becoming an attraction in its own right, with traditional ethnic restaurants popping up throughout the capital. Riga’s rapidly expanding restaurant landscape caters to even the most discerning palates, and the locally produced food is celebrated for its health benefits and rich flavours. Latvian chefs are renowned for their creativity, seamlessly blending traditional national dishes with modern culinary techniques.
But there’s more to Latvia than just Riga. Venture beyond the capital, and you’ll discover a wealth of recreational options. From charming bed-and-breakfasts offering a taste of ‘virtual rurality’ to open-air medieval theatre performances and rock and pop festivals featuring international stars, Latvia’s countryside has something for everyone.
Whether it’s unwinding in a traditional Latvian herbal sauna, horseback riding through picturesque hills, or casting a line in a peaceful stream, Latvia offers the perfect escape for both families and corporate teams seeking a refreshing break.
For those with a passion for culture, Latvia’s countryside is dotted with castles and manors, many of which house fascinating museums. A standout example is Daugavpils, where the historic fortress is home to the Mark Rothko Art Centre, showcasing several works by the legendary abstract artist. In short, living in Latvia offers a unique combination of cultural richness, culinary delights, and natural beauty, making it an appealing destination for anyone seeking a dynamic and fulfilling lifestyle.
Schools, homes, and hotels
Latvia offers a wide range of living options, especially in Riga and the larger cities, where international-chain hotels sit comfortably alongside high-end residential properties available for purchase or rent. These properties range from luxury apartments in the heart of the city to more tranquil homes in suburban areas, with prices varying significantly based on location. For those looking to invest, a country home near a major city is not only a sound investment but also offers the perfect blend of comfort and serenity.
Healthcare is another area where Latvia excels. With one of the highest doctor-to-population ratios in Europe, the quality of medical services in both public and private clinics is exceptional. Latvia’s reputation for affordable, high-quality healthcare has even spurred a wave of medical tourism from neighbouring EU countries, where medical expenses can be exorbitant.
When it comes to education, Latvia boasts three international schools that are highly regarded among the expatriate and diplomatic communities. These schools are conveniently located – one near the popular seaside town of Jūrmala, another by the picturesque Daugava River in Ķīpsala, and a third in the outer Riga suburb of Piņķi.
In addition, many of Latvia’s universities and colleges offer top-tier education across a wide range of disciplines, including the humanities, social sciences, natural sciences, and technology, with programmes available in English for exchange students and free-movers alike.
Expats in Latvia also enjoy a vibrant social scene, with both formal and informal communities providing plenty of opportunities for cultural and recreational activities. Foreign chambers of commerce play a significant role, and informal expat circles frequently meet in Riga to connect, network, and socialise.
What’s the big new waterfront project everyone’s talking about?
The spotlight is currently on the Riga Waterfront project, a transformative development along the Daugava River that promises to reshape the city’s landscape – and for those with the right investment, it offers the bonus of securing European Union residency. Announced in May by UAE developer Eagle Hills, this €3bn ($3.3bn) project spans 5km of prime waterfront real estate, connecting Riga’s UNESCO-listed historic centre with the charming Art Nouveau district.
Designed to reflect a modern lifestyle and elevate the city’s living experience, Riga Waterfront aims to become a vibrant hub blending luxury residential living with green spaces and community activities, all set against a stunning riverside backdrop. According to Mohamed Alabbar, founder and chairman of Eagle Hills, the project represents a strategic vision to revitalise Riga and position it as the new centre of Europe.
The development will feature 8,000 carefully crafted residential units, capable of accommodating over 30,000 residents, along with luxury hotels offering more than 1,000 hospitality units. In addition, the project will include enchanting ice-skating rinks, a marina for ships and yachts, a shopping centre, and public green spaces, making it a destination for leisure, sophistication, and community life.
Education is also a key part of the project’s vision, with plans for advanced schools and community centres that integrate seamlessly with the residential and leisure spaces. The goal is to create a dynamic environment where innovation, well-being, and a sense of belonging come together, leveraging the latest technological advancements to foster a new way of living.
Perhaps most enticing for investors is the opportunity to obtain permanent residency in Riga through an investment of just $271,000, making it one of the most competitive options for securing EU residency. For those seeking both a luxurious lifestyle and strategic access to the European Union, the Riga Waterfront project is an opportunity not to be missed.
Latvia isn’t just a hidden treasure of the Baltics – it’s a land of boundless potential, a country with its eyes set firmly on the future. With projects like Mission Sea 2030 and the transformative Riga Waterfront development setting the stage for the next chapter of growth, Latvia is positioning itself as a key player on the European and global stage. Add to this an appealing tax regime, world-class infrastructure, and a multilingual workforce, and it’s clear that Latvia is more than just a place to live – it’s a place to thrive.