In future, start-ups that set up a related company abroad for capital raising will also be eligible for State aid. In practice, a shortcoming has been identified that prevents prospective start-ups from receiving aid, who set up a related company abroad when selling their products outside Latvia, attracting investment or qualifying for international accelerated programs.
Along with the changes, a number of criteria that the start-up had to meet to be able to apply for support programs have been done away with. This includes the abolition of a requirement that at least 70% of employees must have a Master's or Doctorate degree.
The condition that the start-up is engaged in commercial activities for the first five years since it was registered in the Commercial Register has also been waived, as well as the requirement that the profit of the start-up has not been distributed in dividends since it was registered in the Commercial Register but is directed to its development.
"In three years, only five start-ups have received State aid, which is very small, although such companies are rapidly developing and their economic contribution is increasing. Since around 50 start-ups are registered every year, such companies should be given the opportunity to develop and provide easier access to state aid," – said Ralfs Nemiro, Chairman of the National Economy, Agricultural, Environmental and Regional Policy Commission responsible for the passage of the bill.
The amendments will enter into force on the day following their announcement.