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Business images of Latvia

Economy of Latvia

The economy of Latvia is an open economy in Europe and is part of the European Single Market. Latvia is a member of the World Trade Organization (WTO) since 1999, a member of the European Union since 2004, a member of the Eurozone since 2014, and a member of the OECD since 2016. Latvia is ranked the 14th in the world by the Ease of Doing Business Index prepared by the World Bank Group. According to the Human Development Report 2011, Latvia belongs to the group of very high human development countries. Due to its geographical location, transit services are highly developed, along with timber and wood processing, agriculture and food products, and manufacturing of machinery and electronic devices. Privatization is mostly complete, except for some of the large state-owned utilities. Export growth contributed to the economic recovery; however, the bulk of the country's economic activity is in the services sector.

Top Sectors in Latvia

Agriculture in Latvia

In 2018, Latvia produced 1.4 million tons of wheat; 426 thousand tons of potatoes; 306 thousand tons of barley; 229 thousand tons of rapeseed; 188 thousand tons of oat; 81 thousand tons of rye; 80 thousand tons of beans; and smaller quantities of other agricultural products.

Tourism in Latvia

Tourism in Latvia is an emerging industry in the nation. 2.8 million visitors were recorded in 2018, an increase of 8% compared to 2017. In 2016, tourism contributed 4.5% of Latvia's GVA and accounted for 1.3 million euros in export revenue. Tourism-related industries accounted for 8.5% of total employment, or 77,100 jobs in total. This was accompanied by significant growth in the number of hotels and accommodations in Latvia, rising 37% from 607 in 2018 to 831 in 2018, according to a 2020 OECD report. Most tourists in Latvia come from neighboring countries, primarily Russia, Germany, Estonia, and Lithuania. Most tourists stayed in Riga, the national capital.

Energy in Latvia

Most of Latvian electricity is produced with hydroelectricity. The largest hydroelectric power stations are Pļaviņas Hydroelectric Power Station, Riga Hydroelectric Power Plant, and Ķegums Hydroelectric Power Station. In 2017, about 4,381 GWh were produced in hydro power and 150 GWh in wind power. There are plans to increase wind electricity production under the 2021-2030 energy plan.

Transport in Latvia

Latvian Railways is the main state-owned railway company in Latvia. Its daughter companies both carry out passenger services as well as carry a large quantity of freight cargo, and freight trains operate over the whole current passenger network, and a number of lines currently closed to passenger services. Riga International Airport is the only major airport in Latvia, carrying around 5 million passengers annually. It is the largest airport in the Baltic states and has direct flights to over 80 destinations in 30 countries. It is also the main hub of airBaltic.

Services in Latvia

In 2022, the sector with the highest number of companies registered in Latvia is services with 71,692 companies followed by Retail Trade and Finance, Insurance, and Real Estate with 15,300 and 10,287 companies respectively.


Latvia - Key Economic Indicators

Exports and Imports

Latvia’s economy heavily relies on trade, with exports playing a significant role. As of the latest available data, Latvia's exports were valued at approximately $15.2 billion, with key export commodities including wood and wood products, machinery and equipment, food products, and metals. Meanwhile, imports totaled around $18.4 billion, comprising mostly machinery and equipment, chemicals, fuels, and vehicles. Major trading partners include Germany, Lithuania, Estonia, and Russia.

Infrastructure

Latvia boasts a relatively well-developed infrastructure system. The country has invested significantly in its road network, with approximately 71,000 kilometers of roads, including highways and local roads. Additionally, Latvia maintains several modern bridges and has made efforts to improve its transportation infrastructure to facilitate trade and connectivity within the Baltic region.

Balance of Trade

Latvia generally experiences a trade deficit, meaning that its imports exceed its exports. The trade deficit fluctuates based on global economic conditions, currency exchange rates, and domestic demand. However, despite the trade deficit, Latvia's economy remains resilient due to its diversified export base and competitive industries.

Fiscal Policy

Latvia follows a prudent fiscal policy aimed at maintaining sustainable economic growth and fiscal stability. Government spending is focused on infrastructure development, education, healthcare, and social welfare programs. Taxation is relatively competitive, with corporate tax rates at 20% and personal income tax rates ranging from 20% to 31.4%, depending on income levels.

Monetary Policy

The Bank of Latvia, as the country's central bank, implements monetary policy to ensure price stability and support economic growth. It sets interest rates, manages foreign exchange reserves, and regulates the banking sector. The bank closely monitors inflation and economic indicators to adjust monetary policy as needed.

Trade Agreements

Latvia is a member of the European Union (EU) and participates in various trade agreements negotiated by the EU, such as the Comprehensive Economic and Trade Agreement (CETA) with Canada and the EU-Japan Economic Partnership Agreement. Additionally, Latvia benefits from its membership in the Eurozone, which facilitates trade and financial transactions within the currency union.

Environmental Regulations

Latvia has implemented environmental regulations to protect its natural resources and promote sustainable development. The country has adopted EU environmental directives and standards, focusing on reducing pollution, conserving biodiversity, and promoting renewable energy sources. Additionally, Latvia has made efforts to address environmental challenges such as air and water pollution, deforestation, and waste management.

Tax System in Latvia

Capital Gains Tax: Latvia imposes a flat rate of 20% on capital gains, which are profits earned from investments such as stocks, bonds, real estate, and other assets.
Corporate Tax Rate: Latvia has one of the lowest corporate tax rates in the European Union (EU). The standard corporate tax rate is 20%, which applies to the profits of both resident and non-resident companies.
Sales Tax (Value Added Tax - VAT): Latvia applies a standard VAT rate of 21% on most goods and services. However, there is a reduced VAT rate of 12% for certain goods and services, such as books, pharmaceuticals, and medical equipment.
Property Tax: Property tax in Latvia is levied by local municipalities. The tax rate varies depending on the location and type of property. Generally, residential properties are subject to lower tax rates compared to commercial properties.
Payroll Tax: Payroll taxes in Latvia fund social security programs and healthcare. The social security contribution rate for employees is 11%, while the employer contributes an additional 24.09% of the employee's gross salary.
Tax Deductions and Credits: Latvia offers various tax deductions and credits to individuals and businesses to reduce their tax liability. These may include deductions for education expenses, mortgage interest, donations to charities, and incentives for investments in certain industries.
Tax Compliance: The efficiency of tax collection in Latvia has improved in recent years, thanks to advancements in technology and enforcement measures. The country has been working to combat tax evasion and improve compliance through digitalization and stricter enforcement measures.
Tax Burden: The overall tax burden in Latvia is relatively moderate compared to other EU countries. However, the distribution of the tax burden among different income groups and sectors may vary. Overall, Latvia aims to maintain a competitive tax environment to attract investment and promote economic growth while ensuring sufficient revenue for public services and social welfare programs.

5318 Live Notices for Latvia ....

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Purchase Of Repair Materials, Electrical Goods And Plumbing Products
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
Road Transport Technical Maintenance And Repair Services For The Needs Of Krāslava Municipality Institutions In 2025
country Latvia
posting date20 Jan 2025
deadline06 Feb 2025
Sewage Pump Supply
country Latvia
posting date20 Jan 2025
deadline11 Feb 2025
Development, Rental, Installation And Maintenance Of The Latvian National Stand At The International Exhibition "Marche Du Film 2025" In Cannes, France
country Latvia
posting date20 Jan 2025
deadline17 Mar 2025
"Mechanized Snow Removal Services At Csdd Bauska And Gulbene Customer Service Centers"
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
Purchase Of Fuel For The Needs Of The Ventspils City Municipality
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
General Agreement On The Supply Of Stationery To Ventspils City Municipal Institutions And Capital Companies
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
General Agreements On Vehicle Insurance For The Needs Of The Ventspils City Municipality
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
Research On Improving Traffic Safety And Vehicle Flow Quality On The A1 Riga (Baltezers) – Estonian Border (Ainaži) Motorway Section Km 0.00 – 6.8 (A1/A2/A4 Overpass - Draudzības Street Overpass)
country Latvia
posting date20 Jan 2025
deadline19 Feb 2025
Construction Works Of Tukums Sports Arena
country Latvia
posting date20 Jan 2025
deadline26 Feb 2025
Dynamic Procurement System "Construction Supervision Services"
country Latvia
posting date20 Jan 2025
deadline04 Feb 2025
Purchase Of Chemical Dishwashing Detergents
country Latvia
posting date20 Jan 2025
deadline03 Feb 2025
Construction Work On The Simplified Reconstruction Of The Tukums 3Rd Primary School Building At Lielā Iela 31, Tukums
country Latvia
posting date20 Jan 2025
deadline07 Feb 2025
Transportation Provision Within The Framework Of The Project “Be Healthy In The Land Of Bānītis!”
country Latvia
posting date20 Jan 2025
deadline19 Feb 2025
Purchase Of Ready-Mixed Concrete
country Latvia
posting date20 Jan 2025
deadline18 Feb 2025
Development Of The Construction Project “Reconstruction Of The Building – Laboratory Building Into An Educational Institution” And Author Supervision
country Latvia
posting date20 Jan 2025
deadline06 Feb 2025
Purchase Of Various Reagents, Media And Materials For Opu/Ivm, Moet And Et
country Latvia
posting date20 Jan 2025
deadline18 Feb 2025
Reconstruction Of Semināra Street (From Smilšu Street To P. Rozīša Street), And Construction Of A Parking Lot And Improvement Of The Territory At Semināra Street 8 And P. Rozīša Street 40, Valmiera
country Latvia
posting date20 Jan 2025
deadline17 Feb 2025
Organizing A Seminar On Healthcare Topics In The Field Of Cardiovascular Diseases
country Latvia
posting date20 Jan 2025
deadline10 Feb 2025
Spare Parts, Chromatography Accessories And Reagents
country Latvia
posting date20 Jan 2025
deadline17 Feb 2025

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