During a courtesy meeting with a delegation from Partit Laburista, Malta Chamber...
Riga, the capital city of Latvia is also the largest city in the country. The city is located on the southern coast of the Riga Sea Gulf of the Baltic Sea. The capital city is one the most important cities of the country and it play a crucial role in contributing towards the national economy. The city is a major industrial hub in the country, bulk of the Latvian industrial sector is concentrated in Riga. Besides, being the administrative and economic capital of the country, Riga is also the cultural centre of the Baltic region.
As per the 2010 census, the city is home to more than 706,413 inhabitants. With such huge population base residing in the city, it is the largest city in the Baltic States and the 3rd largest city in the entire Baltic region, behind Stockholm and Saint Petersburg. The UNESCO (United Nation Educational, Scientific and Cultural Organization) has included the Riga’s Historical center in its world Heritage site. The Cities and Regions of the Future 2010/2011, a FDI magazine has ranked Riga as the number one city in the European continent for its cost effectiveness.
Since the city is located in the middle of the Baltic States and in the center of Latvia, the city is a key gateway for accessing the markets of the nations in the Eastern regions of European Union. The city greatly contributes to the economic and social upliftment of the country.
The economy of Riga began to growly slowly during the 1990s. Since then it has continued to grow at a consistent pace and it acquired greater importance in contributing towards the national economy. The economy of Riga got a major boost when Latvia became a member of the European Union in 2004. Since Latvia’s inception in EU the GDP of the region of has grown by up to 58% as compared to other regions in the country. This rapid growth of the city’s growth has created a favorable condition for foreign investment in the city.
The capital city, Riga is the largest industrial center in the Latvia and it offers plenty of scope for foreign investors to invest in its diverse sectors. The city is the leading contributing area in the country to its industrial output both in terms of volume of production and the number of employees employed. In 2002, the region alone accounted for about 62.7% of the gross industrial output of Latvia. Since then the figures have continued to increase and it promises to increase further in the prospective years. Foreign investors can consider investing in the following sectors to ensure valuable returns on their capital.
The food industry is one of the prime industries in Riga. The agricultural production in the regions of Riga is different from other regions in the country. Riga has a huge mass of land reserved for agricultural production. The regions of Riga constitute about 3% of the total cultivable land in Latvia. The fertile soil and good climatic condition prevailing in the region is favorable for growth of a wide variety of crops. The government emphasizes on cultivation of farming products such as flowers and vegetables of all types.
Thus, foreign investors can invest in the cultivation of crops or invest in other activities related to agriculture such as food processing, providing technical support to farmers and encourage use of advanced technologies, providing storage facilities etc.
Besides the agricultural industry, there is plenty of opportunity for investment in other industries including:
• Wood Industry, manufacturing of furniture and wood products
• Pharmaceutical industry
• Chemical Industry
• Assembly and Production of Computers
The Federal government of Latvia has ambitious plans to attract large foreign investment in the county especially in large and important cities like Riga. The government has been proactive and has been formulating special investment policies to make Riga a major business hub in Europe. To encourage maximum investment from foreign players the government provides special incentives to them. The liberal legislation adopted by the Latvia government and the strict monetary policy implemented throughout the country has made the region of Riga the best place for foreign investment.
The government has created Special Economic Zones (SEZs) through out the country to attract foreign companies to invest in these places. Riga is considered a SEZ; investors investing in Riga are provided special incentives, the incentives granted are mainly in terms of tax exemptions on capital investment.
• Foreign investors investing in Riga in its various sectors are liable to get 80% on real estate tax and CIT. In current times, Riga is the ideal destination in European Union for foreign investors to invest in the real estate sector since the rebate taxation policy is valid up to 2017.
• The federal government of Latvia has made it a mandatory law to levy only a nominal CIT (5%) for all foreign companies that operates within special economic zones.
• Foreign investors investing in Riga SEZ are provided free access to use the infrastructure for the development of the business. The investors are also provided all the essential support from the Riga municipality in terms of the information about the key destinations for investment and understanding the market structure of the city.
Foreign investors, investing in diverse industrial sectors of Riga can greatly benefit from the EU structural funding provided to all member countries of the European Union. Latvia being a part of the EU receives the funding for development of private business. The federal government of Latvia utilizes the fund to develop in major cities like Riga.
• The government of Latvia provides maximum amount of €213 to foreign investors for providing training of the employees.
• Foreign investors investing in Riga can also avail financial grants of €500 per one project in the development of new innovative technologies and products.
Riga with its investor friendly policies and the larges of number of investment opportunities in different sectors, it is truly a world class business hub to invest in. Foreigners investing in the city are surely in a win-win situation to earn profitable returns on their investments.
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