The three sectors where the most foreign investment was attracted last year were high-value-added sectors - smart energy, bioeconomics, and the information and communication technology sector.
12 projects have been implemented in bioeconomics, 10 in ICT, 7 in smart energy, 6 in photonics and smart materials, 3 in biomedicine, Vilis Zinkevičs, head of the investment attraction division of LIAA, said.
“One of the most significant events, of course, in attracting investment was the deal with Severstal's takeover,” Zinkevičs said. This sanctioned company “was taken over with a huge contribution from our representation in Italy, in cooperation with several ministries, the European Commission, the government, so this is a significant success,” the LIAA spokesman noted.
“Another thing that could be mentioned in the biomedical sector is the expansion of Roshe's activities in Latvia. This project plans to create close to 200 new jobs, the involvement of well-paid, skilled workers will be implemented in the near future. The expansion of the Schneider Electric factory in Latvia is also worth mentioning,” Zinkevičs said.
“As regards the countries from which these investments have flowed most in 2023, it should be mentioned that they are the Nordic countries - Norway, Finland, Sweden, also Denmark, also our neighbouring countries Lithuania, Estonia are investing actively in Latvia, Germany and the Netherlands should also be mentioned,” the LIAA representative said.
Currently, 140 investment projects have been launched in Latvia. LIAA has only collected data for projects using LIAA support programs.
Of the 46 projects implemented, twenty-four are located in Riga and Pieriga, twelve in Kurzeme, four in Vidzeme, while three projects have been implemented in Latgale and Zemgale.
Zlata Elksniņa–Zaščirinska, Chairman of the Board of Foreign Investors' Council, said that the accumulated foreign investments in Latvia are EUR 10 billion less than in the rest of the Baltic States and this shows that the investment environment in Latvia is not as attractive as in neighboring countries.
“The attractiveness of investment is also influenced by internal factors, and unfortunately Latvia has not done very much homework here. One is how to better engage our people in the economy in that changing business environment and in the labor market. The second point is [..] that the administrative burden is small,“ she said.
“The capital market is very important, I think, to prove to new investors that this is the land where there is a market that could be invested in. And, of course, last but not least, is diminishing the shadow economy. The shadow economy has a disruptive effect on both the amount of tax revenue and the culture of fair competition,” she said.
Zlata Elksniņa–Zaščirinska also emphasized that nearly half or 47% of taxes in Latvia are paid by companies with foreign capital, so it is important not only to attract new investors but also to do everything possible so that investors already in Latvia continue to invest in the state economy.
The objectives set out in the LIAA Strategy for the period 2023-2025 are to attract investment of EUR 2 billion, ensuring the creation of 7,500 new jobs. In 2024, the target set by the LIAA for attracting foreign investments is EUR 660 million.