Why Invest in Latvia in 2026?
Latvia offers a significant tax advantage with 0% tax on reinvested profits. This model, often compared to Estonia's, lets companies build up capital without being immediately taxed. It's particularly attractive for entrepreneurs looking to reinvest their profits into growing the business. For those wondering about the legality of this approach while living elsewhere in the EU, it's important to understand the distinction between personal tax residence and a company's registered office. EU rules allow a registered office to be kept in Latvia while residing elsewhere in the Union.
Good to know
Latvia enjoys recognised political and economic stability, with foreign direct investment (FDI) reaching USD 1.21 billion in 2023, 83.5% of it from the EU.
Access to a Dynamic European Market
Latvia offers direct access to the EU single market, representing more than 450 million consumers. Compared to Western Europe, labour costs in Latvia are generally 25 to 50% lower, letting companies optimise their operating costs. The country is also well integrated into European supply chains, making trade and product distribution easier.
Latvia's Startup Ecosystem
Latvia is becoming an innovation hub, particularly in fintech, SaaS and deeptech. According to international founders who've set up there, the collaborative environment and easy access to funding are major assets. Latvia's startup ecosystem is reinforced by government initiatives and incubators that support new companies.
Special Economic Zones: A Major Advantage
Latvia's special economic zones (SEZs), such as Riga Free Port and Ventspils Free Port, offer tax incentives of up to 80% relief. These zones provide an ideal framework for companies looking to cut costs while benefiting from modern infrastructure. Companies located in these SEZs enjoy not only tax advantages but also easier access to international markets, thanks to their proximity to ports and logistics hubs.
Investing in Riga: A Strategic Opportunity
Riga, Latvia's capital, is the country's economic centre, with a population of 627,500 and constantly developing urban infrastructure. Investing in Riga, particularly in real estate, offers interesting prospects for growth and stability.
How to Start Investing in Latvia
To start investing in Latvia, it's crucial to follow a few key steps: assess the investment sector, get familiar with local regulations, and, if needed, obtain an investor residence permit. International entrepreneurs can get tailored support to navigate these steps. Our team offers a complete service, from company formation to tax optimisation, to ensure a secure and compliant investment.
What are the tax advantages of investing in Latvia?
Latvia offers 0% tax on reinvested profits, letting companies grow without immediate taxation on undistributed profits.
Which investment sectors are promising in Latvia?
Fintech, SaaS, deeptech and real estate are particularly promising sectors in Latvia.
How does Latvia compare to other EU countries for investment?
Latvia stands out for its low operating costs, access to the EU single market, and attractive tax incentives.
What are the legal conditions for investing in Latvia?
Investors must comply with local regulations, including company registration and tax and commercial law requirements.
To find out how Latvia can transform your investment strategy, contact our team of experts for tailored support.