Latvia offers significant cost advantages to investors, including competitive labour and real estate expenses, as well as competitive tax rates. Coupled with strong productivity in manufacturing and services, Latvia provides investors with a highly cost-effective environment for business, producing compelling returns on investment.
Four Latvian cities ranked in top 10 in a variety of categories of the annual fDi Intelligence report, “fDi European Cities and Regions of the Future 2016/17 Rankings”. The capital of Latvia Riga, along with Jelgava and the port cities Liepaja and Ventspils convincingly occupy top spots in the categories for cost-effectiveness, connectivity and foreign direct investment (FDI) strategy.
Latvia offers international competitive workforce at every level of expertise and at very competitive costs. Latvia is among the leading European countries in regards to wage adjusted labour productivity (apparent labour productivity by average personnel costs). (Eurostat, 2016)
Labor expenses: Latvia’s labour costs are very competitive, especially compared to those in older EU-member countries (4th lowest labour costs per hour in EU. Source: Eurostat). For example, Germany’s labour costs are approximately four to five times higher than Latvia. Average salary rates by industry and job title can be obtained by contacting LIAA Investment Promotion Division.
Real estate: Overhead costs have decreased significantly in recent years, particularly for construction, office space and industrial real estate.
Free economic zones: Latvia has 4 free economic zones (Riga, Ventspils, Liepaja, Rezekne) for the benefit of entrepreneurs. Ventspils has been ranked as 7th Free Zone of the Future by fDi Intelligence. Riga and Rezekne – 49th and 50th respectively. Ventspils has also been named as second best world port zone
Tax rates: Latvia has one of the lowest corporate income tax rates (flat rate of 15 %) in Europe. Personal income tax is also at a low flat rate of 23 %. Dividends are taxed at 10 %.