Support for start-ups and micro-enterprises

Starting a business:

When starting a business the first institution to visit is the Register of Entrepreneurs. Here you can register your enterprise as well as get all the information on the requirements.

More information:
Register of Entrepreneurs www.ur.gov.lv
Phone: +371 67031703; E-mail: info@ur.gov.lv
 

Support for start-ups:

On January 1st 2017 Law on Aid for Start-up Companies came into force.

This Law is made for start-ups - a capital company possessing a high growth potential and its main economic activity is related to design, production of development of scalable business models and innovative products;

The main goal is to promote the fast-growing technology companies – start-ups in Latvia, therefore promoting research development and the growth of research products (innovative ideas, products or processes).

The support available to start-ups is:

  • Aid programme for fixed payment (extent 2 minimal mandatory State Social Insurance payments - € 252,6) with additional possibility to receive personal income tax as well as enterprise income tax relief up to 100%;
  • Aid programme for attracting highly qualified employees - financing 45% of salaries, personal income tax and enterprise income tax relief up 100%.

The aid programmes may be granted to a start-up company complying with the following criteria on the day of submission of application and during the whole period of aid programme:

 

  • A qualified venture capital investor who is not a related person to the start-up company under Section 139.1 of the Commercial Law invests at least 30,000 EUR into equity capital of the start-up company every aid application submission year. The said investment is provided for implementation of the business idea stated in the application;
  • The start-up company carries out commercial activity for the first five years since its registration in the commercial register;
  • Income start-up company derives from its economic activity during the first five years of its registration in the commercial register is below 5,000,000 EUR.
  • Income start-up company derives from its economic activity during the first two years of its registration in the commercial register is below 200,000 EUR.
  • Profit of the start-up company since its registration in the commercial register has not been distributed as dividends and is invested in start-up company’s development;
  • The Start-up company has not been reorganised, it has no shares in another capital company, it is not a dependent company under the Group of Companies Law, there has been no transfer of undertaking under the Section 20 of the Commercial Law, and start-up company's equity capital shares (stock) have not been alienated (alienation does not concern the stock of qualified venture capital investor or personnel shares);
  • The start-up company's tax arrears do not exceed 150 EUR;
  • The start-up company complies with at least one of the following signs of innovation:
    1. The start-up company is the intellectual property rights holder on the object which forms the basis of design of the innovative product or service;
    2. At least 70% of employees hold Master’s degree or PHD;
    3. At least 50% of start-up company's expenses sins its registration in the commercial register have been diverted to research and development;
  • Insolvency proceedings have not been applied to the start-up company.

 

Additional information:

 

Investment and Development Agency of Latvia (LIAA)

Address: 2 Perses Street, Riga, LV-1442, Latvia
(Pērses iela 2, Rīga, LV-1442, Latvija)

Phone: +371 67039400
Fax: +371 67039401
E-mail: liaa@liaa.gov.lv
www.liaa.gov.lv

 

On September 29th 2016 Cabinet of Ministers confirmed Information report “About business start-ups and small business ecosystem and further need of supports” worked out by Ministry of Economics. This document contains proposals for such groups of entrepreneurs as starters of entrepreneurship as well as life style enterprises (enterprises with small annual turnover).

Also Cabinet of Ministers decided that:

 

  • Until 1st of June 2017 Ministry of Economics will submit to Cabinet of Ministers draft regulations, that foresee business incentives for starters of entrepreneurship as well as life style enterprises (enterprises with small annual turnover);
  • As a new business incentive Ministry of Economics offers model of 0% bureaucracy in payment of taxes as well as in bookkeeping and introduction of single account in tax payments.

 

 

Micro-enterprise tax:

On January 1st 2017 amendments to Micro-enterprise Tax Law came into force, respective amendments foresee that starting from January 1st 2017 Micro-enterprise tax for enterprises whose turnover does not exceed € 7000 per calendar year is 12%, while tax rate for enterprises whose turnover will be € 7000,1 to 100 000 is 15%.

With this new regime, the tax burden comparing to previously planned changes (reduction of Micro-enterprise tax rate and mandatory State Social Insurance payments) will decrease, if the turnover will be lower than average.

Small proprietorships and performers of commercial activity could continue to apply simply administered Micro-enterprise tax regime. Also with these changes progressivity of Micro-enterprise tax system will be promoted, because for enterprises with lower turnover tax burden will be lower. Micro-enterprise tax payers operating seasonally, would not have to pay taxes for the time, when they are not economically active.

Micro-enterprise, who want to acquire or recover Micro-enterprise taxpayer status (if it is not terminated in the cases stated in the law) or terminate it, can do so by submitting an application to State Revenue Service till January 31st 2017.

Additional information:

 

Information on taxes:

State Revenue Service www.vid.gov.lv

Phone: +371 67120000; E-mail: VID.konsultanti@vid.gov.lv

 

SME access to finance:

The objective of the Investment and Development Agency of Latvia (LIAA) is to promote business development by facilitating more foreign investment, in parallel increasing the competitiveness of Latvian entrepreneurs in both domestic and foreign markets.

LIAA is the institution responsible for business sector development in various ways. Consultants can help with business strategy, courses on different topics, understanding the European Social and other funding schemes, introduce concept of business incubators etc.

With over 20 years of experience in the attraction of foreign direct investment to Latvia and promotion of foreign trade, the Agency has worked constantly to improve the business environment and provided services appropriate to the needs of business.

At the same time LIAA has been evaluating its own performance, comparing it with world best practices, and subsequently introducing new services and solutions for our customers.

The main priorities LIAA are to increase the competitiveness of entrepreneurs and further promote foreign investment into Latvia.

LIAA offers an integrated solution – it supports companies in Latvia trading internationally, as well as overseas businesses seeking partners or locations in Latvia.

 

More information on SME access to finance:

Investment and Development Agency of Latvia (LIAA)

Address: 2 Perses Street, Riga, LV-1442, Latvia
(Pērses iela 2, Rīga, LV-1442, Latvija)

Phone: +371 67039400
Fax: +371 67039401
E-mail: liaa@liaa.gov.lv
www.liaa.gov.lv

Last update:    05-01-2017