High Potential for Green Energy Investments

Latvia Investment Incentives

R&D: Among the programmes that are still being developed, Latvia plans to introduce at the end of 2023 a scheme to support the development and commercialization of new products. The support will not exceed EUR 25,000 per new product or technology. Additional support may be available from EU funds.

Jobs creation & CAPEX:  The government plans to introduce new instruments in late 2023. One of those will offer loans with a capital rebate of 30% of eligible costs for medium and large export-oriented enterprises in selected priority sectors (e.g. knowledge-intensive bioeconomy, biomedicine, mobility, etc.). The other programme will be directed towards SMEs (micro, small, and medium enterprises) and offer de minimis aid (up to EUR 200,000) for business development (employee training, business incubation, export support). Another programme that is currently being developed will be aimed at supporting digitalisation. Micro and small enterprises could receive up to EUR 5,000, whereas larger entities up to EUR 100,000.

Green and other: Latvia offers an administrative fast-track ‘Green Channel’ for investments in selected priority sectors (ICT, bioeconomy, smart materials, and photonics, biomedicine and pharmacy, construction, smart energy, and mobility, transport, and logistics), which shortens the time for administrative procedures for territorial planning, residence permits, and foreign workforce attraction. The criteria a company must meet to benefit from the ‘Green Channel’ focus on expenditures, job creation, export potential, competence development & R&D. Latvia also offers support via ALTUM - a state-owned development finance institution, which offers state aid for various target groups with the help of financial tools (such as loans, credit guarantees, investing in venture capital funds, etc.). Among programmes that are being developed, there is one planned to support new green products and services.

Overview: The support is available nationally. However, most of the support programmes are being developed and the government intends to introduce new instruments in late 2023. Latvia has five Special Economic Zones, where companies may benefit from a tax refund (up to a certain limit) on the real estate tax, CIT, and on withholding tax for dividends, management fees, and payments for usage of intellectual property for non-residents. In Latvia, there is no tax on reinvested profit.

Capital:   Riga
Surface area:  64,590 km²
Population:  1.9 mil
Unemployment:    6.4%
Currency:  Euro
GDP growth: 2.0% 
FDI net inflow (% of GDP) in 2021: 9.3%

Prospective sectors: ICT, bioeconomy, smart materials and photonics, biomedicine and pharmacy, smart energy and mobility, transport and logistics, construction and building materials

Worth knowing: 80% of total direct investments in 2022 were made in smart sectors, Latvia has a high potential for green energy investments, especially in wind and solar. Latvia has the highest in the EU rate of women in managerial positions (OECD 2021)