Over the last five years, 360 foreign founders representing 175 startups have chosen Latvia by making use of the relocation opportunities presented by the startup visa.
The startup visa is a temporary residence permit that allows non-EU startup founders to relocate to and develop their high-potential ideas in Latvia. Launched in 2017 and reworked in 2019, the visa is granted for three years for up to five founders (and their families) per qualifying idea.
Granted visas down nearly 75% in 2022
2022 marked the first time when the number of accepted startups dropped, with only 17 ideas (41 founders) receiving the visa, according to data provided by the Investment and Development Agency of Latvia (LIAA). By comparison, 65 startups were approved for relocation the year before and the drop comes after four years of successive growth in accepted applications.
The reason for this dramatic drop is rooted in Russia’s war in Ukraine, explains LIAA Startup Support Division’s expert Jānis Jēkabsons. Following Russia’s unprovoked attack on Ukraine, Latvia ceased issuing startup visas to citizens of the Russian Federation, which explains the decrease – in previous years, Russia and Belarus were the two most represented countries among visa recipients.
While Russian citizens are barred from obtaining temporary residence permits altogether, Belarusians may still apply. However, in doing so, they will encounter obstacles that weren’t there before. For one, the stringency of their background check has been upped. More critically, they may find difficulties with accessing financial services in Latvia, as holding capital in sanctioned banks is cause for rejection when applying, whereas, opening a bank account in Latvia as a Belarus citizen is currently either extremely difficult or expensive.
Rest of the world
For founders from other countries, the startup visa process has remained unchanged, save for an extra form or two about which banks they hold their capital with. This isn’t much of a burden and hasn’t deterred founders from places such as the Balkans and Israel from applying.
The startup visa application process is simple – acceptance primarily hinges on the founder’s innovative startup idea and their business plan for the next three years. You can consult LIAA about whether your idea qualifies and, if it does, you can sort out your visa in one to three months.
Currently, LIAA is actively working on finding new applicants, with the thriving startup ecosystem of the Balkans as its key area of focus – LIAA has launched a comprehensive informative campaign in the region. Latvia’s dynamic business climate, favorable social support, and rapidly maturing startup ecosystem have a lot to offer to up-and-coming founders eyeing the European market and the campaign seeks to ensure the world hears about it.
To summarise, after the start of the war in Ukraine, there was a nearly 75% drop in the number of granted startup visas in 2022, compared to 2021. This is due to Russian citizens being barred from obtaining them and Belarussian ones encountering new obstacles due to EU sanctions. The process for citizens of other countries remains largely unchanged and the startup visa project is still going ahead, with LIAA shifting its focus toward other high-potential markets, and the Balkans in particular.
More information about the Startup Visa scheme is available here: https://startuplatvia.eu/startup-visa