Financial investment is considered to be the best form of making a profit and a key to long-term stability and financial prosperity.
When looking for Europe-based countries, more and more people are drawn to Latvia and its options, as it shows significant improvements in its economic development.
Latvia is a part of the Baltic region and is situated within Europe’s Schengen Area. Latvia is one of the countries that has taken the course of development and growth.
It successfully combines the Western cultural heritage and the traces of Soviet architecture; more than half of the territory is covered with forests and parks, with numerous trails for an active rest; its transportation system prides itself on excellent coverage, linking all the parts of the country.
Let’s look into the reasons to invest in Latvia, and learn the available options.
Why invest in Latvia?
- Strategic location
Latvia has a very beneficial location – between Scandinavia, the European Union, and Asia ( relatively close). Such a cross-point location provides access to huge markets, with all the possibilities for trade. It hosts companies that collaborate with the EU market, as well as the eastern neighbors.
2. Transportation infrastructure
Riga, Latvia’s capital (pictured) is a well-known home for AirBaltic, which offers more than 70 destinations worldwide. It also hosts airlines like Ryanair, Wizzair, Lufthansa, Finnair, and Turkish Airlines. The cargo capacity of the airport is 156,000 tons/year, and the tourist capacity is getting higher every year, with 5 million people checked in by the end of 2022. The airport is developing toward expansion, which will help to boost the tourist and transportation sectors, as well as create a multitude of employment options.
There are also three international ports in Latvia, located on the Baltic Sea coast – Riga, Liepaja, and Ventspils, which in turn are connected to the nation’s railway, road, and pipeline network.
3. Trade opportunities
Being a member of the Schengen area and the European Union, Latvia takes advantage of free trade on the global market. Considering the positive influence of trade on economic development, Latvia has standardized the customs and border policies, to process all the interactions faster and more efficiently.
Considering the beneficial location of the country, local businesses develop towards expansion in domestic and international environments. There are numerous opportunities to cooperate with the Nordic countries and offer European customers goods and services.
5. Labour cost
Investors who enter the Latvian market will find no lack of a highly qualified and well-skilled workforce; though, the average salary is rather low, compared to the average European.
The employees are typically motivated and are willing to work long hours to earn a better financial position. Besides, the majority of the job market applicants are multilingual, which can let the business owner extend their geo influence.
The business-related taxes in Latvia are rather business-friendly, compared to those of countries with strong economies like Germany, France, Spain, etc.
The taxes are applied to any company that is registered in Latvia as a part of an international business or a locally-functioning business. The companies-residents are taxed by considering their worldwide income, the companies non-residents are taxed only by their Latvian-based incomes.
Overall, Latvia has one of the lowest rates of taxes in Europe – 15%, being applied to the annual profits.
The corporate income tax is also applicable to capital gains, and property sales; yet non-applicable to the capital gains from selling shares.
There is also a simplified version of income tax functioning, applied for the business whose functioning doesn’t exceed 12 months.
7. Developing economyThe Latvian economy is still developing, however, recent years have shown significant improvements in economic affairs. Due to the favorable geolocation, it benefits mostly from transit services, agriculture, wood processing and carpentry, machinery manufacturing, building materials, and renewable energy.
Investors will get good profits when pouring money into these sectors.
8. Tourist sectorThe tourist sector is one of the best-developed ones in the country’s economy, partially given to its cross-country location, which works as a connecting place for a variety of destinations. While having other countries as a final destination, more and more tourists go for a 3-4-day stopover in Riga to explore its beauty and entertainment options.
Latvia is a country that has shown significant economic growth in recent years, which started to attract more investors to its market, and it is working towards improving its position. Its quick development in trade and transportation makes it one of the best European hubs for setting up a business and thus, getting a significant profit.
If you are still in two minds, visit Latvia, and see all the opportunities firsthand.