Transcript Latvia
Latvia and Portugal – perspectives for economic cooperation, investment and trade opportunties in Latvia
FIL Meeting Center, Lisbon September 15, 2004
Mr. Juris Kanels Director
Latvia – facts and figures
• • • • Population: Area : Currency: Language: 2.33 million 64 589 km ² 1 Lats (LVL) = 100 santims Latvian (official), Russian, English and German are also widely spoken • • • Neighbouring countries: Estonia, Russia, Belarus, Lithuania Member of EU and NATO since 2004 Member of the WTO since 1998
Stable macroeconomic environment GDP growth rates: 2000: 6.9 %; 2001: 8,0 %; 2002: 6.4 %; 2003: 7,5 %, 2004 (F): 7,5%
160
Latvia
150 140
Estonia Lithuania
130 120 110
EU
100
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: Ministry of Economic
Strong monetary policy
• Currency (Lats) pegged to SDR since 1994, entry into Eurozone set for 2008, 1 LVL = 1.66 EUR • One of the lowest inflation among Central European and Eastern European countries: • 1999: 3.2 %; 2000: 2.6 %; 2001: 2.5%; 2002: 1.9%, 2003: 2.9% Credit ratings: Moody`s A2; Standard & Poor's A-; Fitch A-
Foreign trade by country 1995 - 2003 100% 80% 9,0% 9,0% 8,0% 11,0% 9,0% 12,0% 12,0% 12,0% 13,0% 12,0% 13,8% 12,9% 17,8% 15,2% 14,8% 14,4% 16,8% 15,6% 60% 44,0% 45,0% 49,0% 40% 57,0% 63,0% 64,6% 52,6% 60,4% 54,8% 20% 38,0% 36,0% 30,0% 19,0% 12,0% 0% 1995 1996 CIS 1997 1998 EU 1999 8,7% 2000 14,8% 10,0% 12,8% 2001 Baltic countries Other 2002 2003
Source: Ministry of Economic
Cumulative FDI into Latvia 1995-2003 3500 3000 2500 2000 1500 1000 500 0 905 750 635 674 512 398 345 261 2246 1973 111 504 675 927 1107 1277 1431 1580 1995 1996 1997 1998 1999 Year 2000
Equity capital Other capital
2001 2002 2003
Source: Ministry of Economic
FDI in Latvia by country at the end of 2003 Other 21,0% Sweden 13,5% Switzerland 2,0% United Kingdom 3,0% Russian Federation 5,0% Netherlands 6,0% Norway 6,5%
Source: Bank of Latvia
Germany 11,0% Estonia 7,0% United States 7,0% Denmark 9,0% Finland 9,0%
FDI into Latvia by activity at the end of 2003 Real estate and other business activities 25% IT&T 5% Transport & Logistics 7% Financial services 15% Hotels and restaurants 1% Other 9% Manfacturing 17% Wholesale and retail trade 18% Energy and infastructure 3%
Source: Bank of Latvia
Latvia: strategic geographic position
Excellent business environment
• • Corporate Income Tax - 15% Start-Up procedures “Latvia is ranked among the top ten countries worldwide in terms of business start up time.”
(Doing Business, Understanding Regulation
, World Bank, IFC, Oxford University Press, 2004 (average length of time is 11 days to undertake all procedures to register a company)
Business environment
Tax rate 40 35 30 25 20 15 10
15 31
5 0 C yp C ru ze s ch R ep ub lic Corporate Income Tax in the New Member States
35 26
Est on ia
18
H un ga ry
15
La tvi a
15
Li th ua ni a M al ta
27 25
Po la Sl nd ova k R ep ub lic
25
Sl ove ni a Source: Ernst & Young
Business environment Equal treatment of foreign investors
• By law, foreign investors have the same rights and duties as local investors • The foreign investor may be the sole founder and owner of a company in Latvia • • No restricted sector activities The foreign investor may freely repatriate after tax profits and investment capital • Foreign companies registered in Latvia are entitled to buy land and property • Active dialogue between the Foreign Investors’ Council in Latvia (FICIL) and the Latvian Government
Advanced telecom infrastructure
Estonia EU Average
Latvia
Slovenia Czech Rep.
Slovakia Poland Lithuania Hungary 0,0%
Internet Usage in CEEC EU Countries
10,0% 26,4% 25,6% 15,8% 23,5% 20,2% 20,0% 30,0%
% of Population
40,4% 38,4% 46,0% 44,7% 40,0% 50,0% Source: Internetworldstats.com, 2004
Special Economic Zones
• 80% rebate on real estate and corporate income taxes, not exceeding 50% of total amount invested • • VAT 0 % for goods on services provided in free zones VAT, Excise tax and customs duty exemptions on import for companies operating in the zones • Application of 0 % VAT to majority of services Special Economic Zones exist in the Freeports of: Riga Ventspils Liepaja and in the city of Rezekne
Promising business sectors
• • Information Technology Machinery Manufacturing and Metalworking and Electronics and Electrical Engineering • • • • Chemicals, Bio-tech and Pharmaceuticals Forestry and Woodworking Transit and Logistics Light industry: Food Processing and Textiles
Medium gross monthly wages/salaries in selected positions, 2003 Area of Activity Indicative Position/Qualification Management IT&T Logistics Manufacturing Director of medium size company Company function manager Team leader Network administrator of a small/medium size company Programmer-analyst Call center operator Truck driver Warehouse worker Engineer, CAD design Engineer, manufacturing equipment Qualified worker
Source: Fontes R&I
EUR/ month 3125 2047 1414 797 967 413 559 323 656 644 434
Reasons for choosing Latvia as your business destination
• • • • • • • Political stability Stabile macroeconomic environment Stabile macroeconomic environment Excellent business environment Attractive business incentives Attractive business incentives Services by Latvian Investment and Development Agency
Welcome to Latvia!
Keystone to the Baltic States
Latvian Investment and Development Agency P ērses iela 2, Rīga, LV 1442, Latvia Phone: +371 7039400, Fax: +371 7039401 E-mail: [email protected]
http://www.liaa.gov.lv