Latvia's path on becoming an ideal place for startups

Latvia greets many companies that have already relocated or planning to. According to LSM.LV, last year, twelve Belarussian companies relocated their business to Latvia in search of better conditions for existence. Also, Labs of Latvia concluded that in 2019 startup visas were issued to 109 founders helping them to start businesses in Latvia. Starting from 2018, startup visas were granted to 61 projects, and most of them are from Russia. Also, startup visas are favored by India, Iran, Belarus, United States, and Ukraine citizens.

Latvian government proposes a temporary residence permit for the most talented founders named startup visa allowing them to develop projects in Latvia. Furthermore, a startup visa could be granted to up to 5 founders meaning that all the team could be relocated. The process is very fast and convenient and often takes only one month to receive it. Even more, a startup visa allows relocating children and spouses from non-EU countries.

According to LIAA (2021), Latvia is the most startup-friendly country in the world and always supported and developed a startup ecosystem. The agency guides starters during its operations and assists investors to meet their needs. The ecosystem is fast-growing and nowadays has more than four hundred startups assisted by venture funds, accelerators, business angels, and incubators. LIAA proposes not only constant support, but it also reacts fast to any news and provides all necessary assistance for companies. Last year Belarus faced a difficult political situation, so the Investment and Development Agency of Latvia responded immediately and accelerated the visa application and residence permits.

Even more, the Latvian government supports the startup industry by creating favorable conditions. At the beginning of the year, new amendments to startup law were made focusing on easing the requirements to support more industry players. The latest changes affected individual income tax, which was lowered to zero, consolidated social tax, and proposed 45% co-financing for talented employees. The requirements to fit the law are not inconceivable – the startup should be either financed or demonstrate that the team is developing an innovative product, pay taxes as the debt should not exceed 150 EUR, and show financial stability with no ongoing bankruptcy. Furthermore, at the end of last year, new amendments to the law regulating stock options were made, allowing limited liability companies to offer stock options for the employees. Startups benefited the most from the latest changes as typically they cannot afford to pay competitive salaries but now can propose stock options for the best employees to motivate them.

Latvia has a wonderful environment for workers. This year Renat Lokomet issued an article named Latvia is the paradise for remote work, where he highlighted the main reasons why this country especially has the most pleasant conditions for employees. The most important thing to mention is that Latvia is famous for its high-speed internet and offers excellent value for money in terms of cost of living. Furthermore, LIAA highlighted that Latvia is 19th place in the global Ease of Doing Business ranking. Not to mention the nature of the country – endless forests, the sandy beach coastline, a bunch of lakes and rivers. Despite the nature, Latvia offers many co-working spaces like Venture Faculty with business incubators supporting new founders to make their business successful. It is important to remember that many tech conferences like TechChill, Digital Freedom Festival, Deep Tech Atelier, and iNovus took place where the most innovative startup ideas are presented. Therefore, Latvia is famous with people in the IT industry who show exceptional knowledge. As an example, the company Printful is called Latvian Unicorn as it is being one of the best startups and it is valued at over 1 billion dollars after receiving a last investment of over 106 million euros.

Latvia created very favorable conditions for startups and it is attracting them in every possible way. If you are planning to relocate, contact us, and we will assist you during the process.