FDI Track Record

FDI Inflows

Ever since Latvia regained independence, foreign direct investment has been a major driving force of the economy, showing steady growth with FDI stock.

In accordance with the balance of Latvian international investment, the FDI stock in Latvian economy amounted to EUR 8 126.1 million at the end of 2008, per capita EUR 3 594.

Geopolitical structure of the FDI stock in Latvia has not changed essentially since 2004. The majority of it is made up by investment of the EU member states. At the end of 2008, investment of EU member states constituted 76% of the total FDI stock in Latvia.

FDI Stock at the end of the Period, billion EUR

Source: Bank of Latvia

Sources and Destinations

The main sources of foreign direct investment in Latvia have been, and remain neighbouring countries in the Baltic Sea region which have been active in Latvia from the very beginning of the 1990s. Currently, investment from Germany, Sweden, Denmark, Finland and Estonia makes up 52% of total FDI stock, covering a variety of fields from finance, telecommunications and trade to fully export-oriented manufacturing. The high level of interest in Latvia has two basic reasons:

• substantial differences in operating costs between the 'east' and 'west' coasts of the Baltic Sea;
• investors striving to establish a presence in the fast growing Baltic market and looking at further strategic opportunities in Russia and the CIS.

FDI Stock by Country of Origin, End of Year 2008

Source: Bank of Latvia


The other group of more remote investing countries is led by the USA and Netherlands, who tend to choose Latvia both as a market base for the Baltic region and as a favourable manufacturing location. Countries to the east, mostly Russia, have chosen Latvia for transit/value-added logistics operations for their main export commodities – oil products, chemicals and metals.

FDI Stock by Sector, End of Year 2008

Source: Bank of Latvia


Additional information:
www.bank.lv 
www.csb.lv