The information was translated using the ChatGPT service.
While reviewing the priority measures for the 2024 state budget, i.e., the allocation of additional funding, the Cabinet of Ministers supported the proposal of the Ministry of Economics to allocate an additional 6.4 million euros from the state budget for investment and export promotion measures, as well as support for startups. "The agreements reached in the early days of the government on other tools to promote economic growth, including tax instruments, are also satisfying. For example, allowing employers to cover the costs of employees obtaining higher education in Latvia without taxing these costs with labor taxes, simplifying the application of micro-enterprise tax rates at 25%, and increasing the VAT registration threshold for domestic transactions. All these measures will help our entrepreneurs increase competitiveness and thereby export capacity,” emphasizes Minister of Economics Viktors Valainis.
To promote Latvian service export and investment attraction, the government has decided to allocate an additional funding of 6 million euros in the 2024 state budget, marking an identical sum for 2025 and 2026.
“To continue encouraging Latvian companies to invest in the development of new products and thereby promote the growth of the Latvian economy and increase in export volume, targeted state investments in the economy must continue. To support Latvian companies, well-thought-out and long-term targeted state support activities are needed, directly associated with additional support for making investments, market reorientation, development of new and innovative products and services, promoting economic activity also in Latvian regions,” emphasizes Minister of Economics Viktors Valainis.
Within this funding, it is planned to implement measures to promote transaction and event export in Latvia, supporting activities such as the organization of strategically important and particularly large projects/events in Latvia for international scale activities (seminars, conferences, and congresses, exhibitions). As a result of the support measures, high-value-added exports and Latvian international recognition would be promoted, which is an essential factor for shaping the country's image, attracting investments, and promoting international cooperation. It should also be emphasized that by 2027, significant support to our entrepreneurs' productivity, digitalization, export capacity, and competitiveness would be provided by investments from the Recovery Fund and the EU Structural Funds multiannual budget.
Meanwhile, additional funding of 400,000 euros is planned for startup support in next year’s state budget, with the same funding planned for startup support in the 2025 and 2026 budgets.
“Startups play a significant role in the overall innovation ecosystem as they provide an influx of innovative business ideas and promote a faster economic paradigm shift towards a knowledge economy. Startups have the highest potential to bring our scientists’ discoveries and innovations, including deep technologies, to the economy. Moreover, startups create a new business culture, focusing on sustainable business models, circular and digital economy, clean energy, industrial innovations, and climate change goals. We need to be more ambitious, and we can do more to ensure the availability of financial support for the faster growth and development of startups,” emphasizes Minister of Economics Viktor Valainis.
Support for startups will be provided through organizations representing the startup ecosystem operating in Latvia and partners of the memorandum "Implementation of the Latvian Startup Ecosystem Development Strategy" – the "TechChill" foundation, Riga Technical University, the "TechHub" foundation, the "Latvian Business Angels Network" association, the Latvian Startup Association, and the Latvian Private and Venture Capital Association for the joint implementation of the Startup Development Strategy for 2022-2025. It is planned to implement activities such as international-level events (conferences, seminars), individual consultations for early-stage startups on available investments and investor attraction sessions, etc. The implementation of the mentioned activities is essential for Latvia's regional and international development.
As known, the goal of the Startup Ecosystem Development Strategy for 2022-2025, approved in the fall of 2022, is to promote the development of a strong and unified startup ecosystem, introduce activities, and attract talents to startups. To encourage the establishment of rapidly growing technology companies or startups in Latvia, promoting research development and the commercialization of research products, the Startup Business Support Law has been developed. Also, a temporary residence permit has been created for startup founders, allowing third-country nationals to obtain residence rights in Latvia with the goal of establishing a startup and working on their product development and attracting investment from a qualified risk capital investor. Startups also have access to financing for loans, business incubators, and acceleration funds, as well as the innovation voucher program.
It is important to emphasize that the total tax payment of startups exceeds the total approved state support amount by more than 7 times, which proves the effectiveness of state support and the significant fiscal effect of the companies themselves on the Latvian national economy budget in the long term.
Ministry of Economics Public Relations Department prese@em.gov.lv