Government moves to help startups from next year

The government on Tuesday supported an Economics Ministry program to decrease taxes and co-fund highly qualified employees' salaries in startup companies from 2017.

The Economics Ministry will work out a €3m program to co-fund specialists' wages when startups don't have enough money to hire them. The plan is to be handed for review to the government on October 11.

The ministry also proposes to make doing business easier for early-stage startup companies.

Under the new plan, startups would pay a fixed tax of €252 a month per each employee, to be paid into the social budget. Startups would be exempt from paying income tax.

The ministry says the rules would apply to companies manufacturing, developing and selling innovative products for the first five years of their operation. Attracting risk-capital investments would be required to qualify for state support.

Economics Minister Arvils Ašeradens (Unity) said that startups play a great role in promoting Latvia's economic growth, as well as boosting innovation and creating products with high value added.

"That's why Latvia must create a business environment conducive for the further growth of these companies and for creating products with a high value added as well as new jobs," said the minister.

At the moment about 20 startup companies are created in Latvia but the minister told Latvian Radio Tuesday that the new program aims to double that number.

Other tax initiatives helping lifestyle companies and budding enterprises are to be introduced in 2018. 

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