Latvia places 19th in the “Doing Business” Index

According to the World Bank's latest "Doing Business 2018" rating of the world's countries with most favorable business environment, Latvia ranks 19th among 190 countries, leaving behing 171 economies. Among the European Union member states, Latvia ranks 8th. Changes in the ranking of countries this year are mainly due to reforms that have come into effect in other countries over the last year and a half. In comparison, Latvia is currently actively implementing the reforms provisioned in the Business Environment Improvement Plan and the positive impact of the plan will be felt in 2018 and 2019 and reflected in the Doing Business 2019 and 2020 ratings respectively.

Country positions in the ranking are determined by the points obtained in comparison with the best result (distance to frontier or DTF). For Latvia, the ratio to the best rating result has changed by only 0.79 percentage points. By contrast, for example, the neighboring country’s Lithuania’s DTF has gained 1.05 percentage points more than in the past for the best result. Mechanisms that already exist in Latvia are being implemented in Lithuania – major reforms have been made in areas such as construction, electricity connections, protection of minority investors and tax levies. As a result, Lithuania climbed from the 21th place to the 16th place, while Latvia slipped from the 14th to the 19th place. The ratio of Estonia to the best result has improved by 0.05 percentage points and its 12th place in the rating has not changed.

The World Bank's Doing Business rating quantifies and compares the regulatory conditions and procedures of 190 countries in the world that relate to the 10 life-cycle stages of medium and small businesses using standardized scenarios. The rating evaluates formal procedures that promote or restrict business activity in the largest city – the national business center. Doing Business researchers rely on respondents' opinions. In Latvia, 45 respondents from the non-governmental and public sectors participate participate in the evaluation.

In Latvia, the Doing Business rating is used as a tool for reform assessment, which allows to highlight the requirements where the administrative burden is too high, that is, it allows to compare the number and length of administrative procedures for their execution and related costs, as well as to assess the business environment as a whole. However, due to recent changes in methodology, rating results currently are only comparable going back two years.

The next data gathering and questionnaire process for Doing Business rating will begin in February 2018 and will evaluate the reforms that have taken place and have entered into the force from 1 May 2017 to 1 May 2018.

The next year's Doing Business rating will begin in February 2018, and it will evaluate the reforms that have taken place and have entered into force from 1 May 2017 until 1 May 2018. The government of Latvia is currently working on a number of reforms that will be reflected in the Doing Business 2019 and 2020 ratings. Among the reforms:

  • online registration of companies using and reduced fees for the service;
  • in cooperation with commercial banks, considering potential solutions for the Register of Enterprises of Latvia to offer opening a bank account as an e-service;
  • reducing costs of company's e-registration to EUR 100;
  • additional e-services for the submission and coordination of construction documentation with the respective government agencies;
  • improvement of electronic notification system in the Land Register;
  • the waiver of submission of documents certifying ownership rights to state and local government institutions;
  • Simplifying the reorganization process and shortening the deadlines stipulated in the Commercial Law for changing a limited liability company, LLC, to a corporation;
  • Developing the Register of Enterprises of Latvia e-services to provide an e-service to verify the representation rights of the representatives of the legal entity;
  • Strengthening e-solutions in public administration to promote entrepreneurial activity, including the cross-border engagement of entrepreneurs and the use of foreign eIDs in Latvia’s e-services, and other reforms.

Source: The World Bank, Ministry of Economics of the Republic of Latvia