Translated using ChatGPT service.
At its August 13, 2024 meeting, the Cabinet of Ministers approved amendments to the Cabinet of Ministers' Regulations No. 74 "Procedure for Application and Administration of Startup Support Programs," dated February 7, 2017, which will enable the Latvian Investment and Development Agency (LIAA) to expedite the review of startup applications and grant state support more quickly.
According to the Startup Support Law, startups are offered state support for making a fixed payment (equivalent to twice the minimum state social insurance mandatory contributions) with the additional possibility of receiving personal income tax and corporate income tax relief (up to 100%), as well as support for attracting highly qualified workers.
"The Latvian Investment and Development Agency is ready to expedite the review of startup applications, ensuring that the actual support is received as a priority. The approved changes to the Cabinet regulations will allow for the acceptance and evaluation of company proposals and the allocation of funding. Additionally, the necessary legislative amendments are being fast-tracked," stated Minister of Economics Viktors Valainis.
With the amendments to the Cabinet regulations, support for startups making fixed payments will continue in accordance with the current European Union de minimis support regulations, including an increase in the total de minimis support amount to 300,000 EUR (previously 200,000 EUR). Additionally, other provisions related to the administration of the support have been clarified.
It is also worth noting that startups still have access to support for attracting highly qualified workers under the innovation voucher support program.
The Ministry of Economics has also prepared amendments to the Startup Support Law, which include a reference to the new European Commission de minimis regulation. These amendments are currently undergoing inter-institutional coordination and are expected to be urgently approved by the Saeima in September of this year.
The Latvian startup ecosystem comprises over 600 startups, with more than half operating in the information and communication services sector, and over 20% in manufacturing and professional, scientific, and technical services. The startup sector employs more than 3,000 highly qualified workers and contributes over 57 million EUR in taxes annually. According to LIAA, since 2017, 98 startups have received support for fixed tax payments, and 37 startups have received support for attracting highly qualified workers. In 2024 alone, LIAA has granted support for fixed tax payments to 15 startups, while five startups have received support for attracting highly qualified workers. Currently, eight startups are awaiting decisions from LIAA.