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Business in Latvia, Riga (2026)

Name: Business in Latvia
Address: Riga, LV

16/10/2020

IMF predicts Latvia's steepest economic downturn this year among the Baltic states

In its latest World Economic Outlook, the IMF predicts that Latvia's economy will contract 6% this year, less than the April forecast of 8.6%. Next year, the IMF predicts that Latvia's gross domestic product (GDP) will grow by 5.2%, which is also less than the previous forecast of 8.3%.

According to the IMF, consumer prices in Latvia will grow by 0.6% this year, and next year inflation will be 1.8%.

Unemployment in Latvia by the end of this year will reach 9%, and next year it will drop to 8%.

Among the Baltic states, the IMF expects Estonia to have the second largest GDP contraction this year - by 5.2%, and next year its economy will grow by 4.5%. In April, the IMF predicted that this year Estonia's GDP will shrink by 7.5%.

Inflation in Estonia is projected at 0.2% this year and 1.8% next year.

The IMF expects the unemployment rate in Estonia to rise to 7.8% by the end of this year and fall to 6.1% next year.

In Lithuania, the IMF predicts an economic decline of 1.8% this year and growth of 4.1% next year. In April, the IMF forecast an 8.1% economic decline for Lithuania this year.

The IMF expects inflation in Lithuania this and next year to be 1.3% and 1.7%, respectively, unemployment by the end of the year will reach 8.2%, and next year it will fall to 7.5%.

For the euro area as a whole, the IMF predicts an 8.3% drop in GDP this year and economic growth of 5.2% next year.

According to the IMF forecast, inflation in the euro area will be 0.4% this year and 0.9% next year. Eurozone unemployment is projected at 8.9% this year and 9.1% next year.

For the global economy, the IMF is forecasting a 4.4% decline this year and a 5.2% growth next year.
#2020 #2021

15/10/2020

LMT and MikroTik set up the first 5G technology laboratory in Latvia

At the beginning of this year, a powerful 4G router was created in the laboratory, which is already on sale. In autumn, MirkoTik and LMT completed the development of a prototype 5G router. It may go on sale in the first quarter of 2021.

Co-owner and chairman of the board of MikroTik John Tully explained that in connection with the development of 5G networks, it is important to create powerful and functional devices that allow you to take advantage of such networks.

“Now we can say that the development of 5G infrastructure will create completely new services and services in a variety of areas. Similarly, 4G technology has changed the market for Internet and TV connections. Therefore, together with LMT, we have developed a 5G router that will provide the necessary volumes and quality of data transfer The availability of such products will become vital in the future, so we believe they have great potential for export, ”said Tully.

14/10/2020

Coronavirus hit Latvian exports too

The rapid spread of the new coronavirus, which has caused significant damage to the global economy, is also affecting Latvian exports, the newspaper Diena writes.

At the same time, it should be noted that the numbers seem less sad than they could be given the current development of global events. When it comes to merchandise export statistics, there is both good and bad news. One of the bad news is that if you look at the dynamics on an annual basis, in August this figure was worse than in July, and one of the good news is that some engineering industries have returned to export growth, if we estimate situation in comparison with the corresponding month of the previous year.

In contrast to July, when a press release from the Central Statistical Office reported a slight (by a few tenths of a percent) increase in exports compared to the corresponding month of the previous year, in August it is reported a decrease. Compared to August last year, the export volume of Latvian goods in monetary terms decreased by 3.7%. However, it should be noted that the picture in terms of export positions is very diverse: a significant decrease alternates with even greater growth.

14/10/2020

The Budgetary and Financial Commission of the Seim did not support the proposal to introduce a reduced rate of value added tax (VAT) on fermented milk products, milk, bread, meat, fish and eggs.

MP Kaspars Girgens (KPV LV) submitted a proposal to amend the VAT law. He proposed to apply a reduced VAT rate of 5% to fermented milk products without additives, milk, bread, fresh meat, fresh fish and eggs.

According to Girgens, the state should expand the application of the reduced VAT rate on food. "The reduction in VAT on vegetables has paid off, and during the Covid-19 crisis, we need to support the most vulnerable people," he stressed.

MP Dana Reizniece-Ozola (Union of Greens and Peasants) noted that this initiative is in line with the opposition's earlier submitted proposal. “These are the staples that make up the bulk of the shopping basket of the less affluent,” she said.

The representative of the Ministry of Agriculture Janis Egilitis said that the ministry had already proposed a reduction in the VAT rate on milk, bread, meat and fish, as there is very serious competition in this sector and "a very large gray market, which does not allow Latvian farmers who work honestly to develop" ...

Nevertheless, the majority of the members of the commission, including a number of representatives of the KPV LV party, rejected the above proposal.

12/10/2020

Opening locations of two more Burger King fast food restaurants in Latvia announced

The Estonian company Tallink has announced that, in addition to the Akropole shopping center, two more Burger King fast food restaurants will be opened in Riga.

The second restaurant will open before the end of this year in the Maxima shopping center, at 113 Vienibas gatve. The third restaurant of the chain will appear in the first half of 2021 at 14 Audeju Street, not far from the Galerija Centrs shopping center in Old Riga. As previously reported, the first Burger King in Latvia will open in Akropole by the end of 2020.

“We are already actively working on the interior and furnishing of restaurants in the Akropole shopping center and Vienibas gatve, installing equipment and refining processes for efficient restaurant management, while recruiting personnel in accordance with current regulations and modern security requirements,” said Katre Kivask. Head of Retail Group, Tallink Grupp, responsible for preparations for the opening of Burger King in the Baltic States.

At Vienibas Gatve, customers can buy burgers and other dishes without leaving their car.

With the opening of three restaurants in Latvia, about 100 new jobs will be created over the next 12 months. In total, over the next five years, it is planned to open more than 40 Burger King restaurants in all Baltic countries, thereby creating more than 800 new jobs.

11/10/2020

Micro-enterprises will not be able to be SIA and VAT payers

Micronalog can be paid by the only person at the enterprise - its owner. Previously, the micronax on a turnover of up to 25 thousand euros per year was 15%, now it is 25%. For a part of the turnover exceeding 25 thousand per year, it will be equal to 40%.

An enterprise that is a VAT payer will not be able to move to the status of a micro-enterprise. The same person, who became a VAT payer, will lose the right to apply the status of a micro tax payer from next year. It is also stipulated that from January 2021, limited liability companies (SIAs) will no longer be able to obtain MUN payer status. And SIAs, already previously registered as micronexpayers, will no longer be able to become MUN payers from 2022.

If a micro-enterprise employs more than one person, both income and social taxes will have to be paid for them in full. For those who already work at such enterprises, a transition period is provided until July 2021, and new employees from January 1 will be employed as in an ordinary company.

In the spring, discussing measures to support the population, the government decided that since some categories of workers paid social contributions, but are not eligible for unemployment benefits, and, moreover, they are not covered by the previously introduced mechanism of state support for enterprises affected by the emergency, a separate support mechanism is needed especially for them. For example, microenterprise employees in the spring could count on government benefits equal to 50% of their average monthly earnings. The ceiling for the benefit paid during the emergency was 700 euros per month.

10/10/2020

Fitch Credit Rating Agency Raises Latvia Outlook To Stable

The agency named the effective measures to combat the coronavirus and not as strong as expected its impact on the Latvian economy as the reason for the change in opinion.

As noted by the Minister of Finance of Latvia Janis Reirs, the decision to keep the credit rating of Latvia at the same level and increase the prospects speaks of the resilience of the Latvian economy to external shocks and may serve as a basis for further attracting investments to Latvia, which has shown itself to be a reliable partner. Fitch ratings are important primarily for investors and affect the value of government bonds.

In the spring, Fitch forecasts said that the decline in GDP in 2020 will be 7%, now talking about 5.2%. In 2021 and 2022, Fitch predicts, GDP will already grow - by 4.6% and 3.2%, respectively.

09/10/2020

Starting next year, the social contribution rate will be reduced by one percentage point to 34.09%

The employer's rate will decrease from 24.09% to 23.59%, the employee's rate - from 11% to 10.5%.

From January 1, but with a transition period until June 30, 2021, micro-enterprise tax payers will be insured as self-employed persons, and micro-enterprise workers - like all other workers in the general regime.

From July 1, 2021, the rate of mandatory contributions for self-employed pension insurance will be 10%, and from 2022 - 10% of the minimum wage, if monthly income is less than the minimum wage.

If the income of a self-employed person exceeds the minimum wage, social contributions will need to be paid at least from the minimum wage and 10% of the difference in income. From 2023, self-employed people will pay social security contributions on all income.

From 1 July 2021, 25% will be withheld from recipients of royalties. 80% of this amount will be social contributions, 20% - personal income tax.

Thus, all taxpayers will pay a minimum social contribution, which will also eliminate the use of different tax regimes for tax optimization purposes.

09/10/2020

Buckwheat in Latvian stores has risen by 22%

In September last year, it cost an average of 1.91 euros per kilogram, in September this year - 2.37 euros per kilogram, according to data from the Central Statistical Office.

With the start of rush demand in April, its price in stores jumped by about 20 cents per kilogram and did not fall after that. The prices of other stored products, such as salt, sugar, coffee, tea, pasta, vegetable oil, rose more moderately or even declined over time. For example, salt has risen in price by 1 cent per kilogram over the year, and sugar even became a couple of cents per kilogram cheaper.

06/10/2020

The planned introduction of a car registration tax will encourage Latvians to buy older and environmentally harmful cars, said Janis Ozolins, director of the Latvian Association of Vehicle Dealers (Latvijas Transportlīdzekļu tirgotāju asociācija, LATTA).

The association believes that the new tax on car registrations planned from the beginning of 2021 is absurd. "For a poor average Latvian buyer, the amount available to buy a car will become even less due to the new tax, they will have to buy older cars," LATTA notes.

In other countries, the government supports the purchase of more environmentally friendly cars, rather than fining less wealthy residents with a mobility tax, said LATTA board member Aldis Cima.

In the future, the Seimas must approve or reject the amendments to the Law on Tax on Vehicle Operations, approved by the Cabinet of Ministers on September 29, implying the introduction of a new tax on vehicle registration. If these amendments come into force, then from 2021, when buying a family car with a diesel engine, you will have to pay a tax of 240-680 euros.

"At the same time, under the guise of environmental protection and a change in the calculation method, a tax on the operation of vehicles is planned. For example, even for one trailer or semi-trailer weighing up to 750 kg, which does not generate emissions, it is planned to levy 60 euros annually, although now there is no tax on trailers. Latvia now has the highest car taxes in the Baltics, "Ozolins said.

04/10/2020

From the report of the ECB specialists presented on October 2 on the possibility of introducing a digital version of the single European currency into circulation, it follows that it would help better meet the demand for electronic means of payment and would compete with private cryptocurrencies such as bitcoin. At the same time, the digital euro would only become a supplement to traditional cash, but not a replacement for it, experts emphasize.

At the same time, the digital euro would allow citizens to store their savings directly with the ECB. At the moment, only credit institutions such as banks, governments and other central banks have this opportunity. This is what causes fears among some experts: after all, in the event of another crisis, the population will be able to take all the accumulated funds from commercial banks, transfer them to the ECB and thereby aggravate the situation.

It is expected that in the coming weeks the ECB will begin internal testing of the digital currency, and will also conduct surveys of EU citizens and experts from the field of science and finance for their approval of the idea of introducing a single European digital currency. The decision to issue a digital euro or abandon this project will be made in mid-2021.

04/10/2020

This week the most expensive petrol was in Tallinn, the cheapest in Vilnius. The most expensive diesel fuel was in Riga, the cheapest was in Vilnius.

In Riga at the "Circle K" filling station, the prices for gasoline and diesel fuel did not change and amounted on Friday to 1.129 euros and 1.009 euros per liter, respectively.

In Vilnius, the price of 95-grade gasoline increased by 0.5% - to 1.102 euros per liter, while the price of diesel fuel decreased by 1.5% and amounted to 0.922 euros per liter. In Tallinn, prices did not change, and at the Circle K petrol station 95th gasoline cost EUR 1.229 per liter, and diesel fuel - EUR 0.949 per liter.

Autogas prices in Riga and Vilnius have not changed. In Riga, a liter of autogas cost 0.535 euros, in Vilnius - 0.503 euros. In Tallinn, autogas prices fell by 1.4% - to 0.562 euros per liter.

Business in Latvia

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