Official Name: Republic of Latvia Capital: Riga Total area: 65 000 km2 GDP per capita: $18,100 Native Language: Latvian Government: Parliamentary Democracy Population: 1,911,108 Major Religion: Evangelical Lutheranism Monetary Unit: Euro (EUR)
Latvia regained its independence from the Soviet Union in 1991. Located on the Baltic coast, Latvia is a low-lying country with large forests that provide timber for the construction and paper industries. The surrounding area is rich in wildlife. Latvia also produces consumer goods, textiles and machine tools. The country attracts tourists from all over Europe.
Ethnically, the population is 59% Latvian and 29% Russian, and more than a third live in the capital, Riga. Riga was founded in 1201 and is the largest city in the three Baltic States with 730,000 inhabitants. At 43 meters, the Statue of Liberty is one of the tallest monuments in Europe.
Latvia's 100-seat unicameral parliament, the Saeima, is elected every four years by direct popular vote. The President is also elected by Parliament every four years.
The best-known Latvians include the expressionist painter Mark Rothko and the contemporary composer Peteris Vasks.
Characteristic specialties of Latvian cuisine are Speķapīrādziņi (bacon pies) and a refreshing, cold sour cream soup.
Health & Welfare Social insurance and benefits programs are being developed including free choice of provider, free drugs and prescriptions, and inclusive health insurance for all citizens.
Economy & Jobs Service, tourism, shipping, trading, and agriculture.
Main Attractions Riga, Bauska castle, Jurmala towns, Kuldiga historic town, and Sigulda medieval castles.
Immigration Latvian citizenship can be acquired in a number of ways. The most common are by descent, birth, marriage, extension of award, and business. Tourist, student, and work visas are also available as the immigration by real estate is provided.
Economy Latvia is a small, open economy with exports contributing nearly a third of GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronics industries. Corruption continues to be an impediment to attracting foreign direct investment and Latvia's low birth rate and decreasing population are major challenges to its long-term economic vitality. Latvia's economy experienced GDP growth of more than 10% per year during 2006-07, but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the softening world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in 2009. The economy has not returned to pre-crisis levels despite strong growth, especially in the export sector in 2011-12. The IMF, EU, and other international donors provided substantial financial assistance to Latvia as part of an agreement to defend the currency's peg to the euro in exchange for the government's commitment to stringent austerity measures. The IMF/EU program successfully concluded in December 2011. The government of Prime Minister Valdis DOMBROVSKIS remained committed to fiscal prudence and reducing the fiscal deficit from 7.7% of GDP in 2010, to 2.7% of GDP in 2012. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 99.8% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February, 1999 and the EU in May 2004. Latvia intends to join the euro zone in 2014.
Documents for submission These are the necessary documents to submit to acquire residence permit:
Filled application form Passport size picture Document issued by competent authority from the home country indicating that the foreigner has no criminal record Prove of sufficient financial means Document indicating place of residence in the Republic of Latvia Prove that payment for the real estate was in non-cash form (bank transfer) Document that indicates that person has paid real estate tax if the real estate in owned for more than a year Document that indicates that State fees for residence permit request are paid Additionally upon arrival Valid health insurance Reference from Latvian medical institution proving that the foreigner does not suffer from tuberculosis in active phase Documents and application can be submitted
At Immigration office in Republic of Latvia At Latvian embassy or consular missions outside the Schengen area Residence permit for the family Along with the main investor his/her family members can apply for a temporary residence permit. Qualified family members are the spouse and children under18 years of age.
Financial means to support living expenses Minimum required financial means for investor – 960 Eur per month Minimum required financial means for spouse - 320 Eur per month Minimum required financial means for child - 192 Eur per month In order to prove possession of sufficient financial means the foreign national should provide a bank statement that indicates amount for one year 12 x 960 = 11520 Eur.
Additionally expected expenses related with buying the real estate State fee for registration the new owner in the Land Register – 2% from the value of the property State fee that must be paid to the government when you recive the permit – 5% of the proparty value Stamp duties, notary fees & other; approximately 80 – 130 EUR
If a company intends to carry out an economic activity, it can voluntarily register as a VAT payer. However, it should be considered whether registration is really necessary, unless it is a mandatory registration. One of the main criteria are customers who buy the company's goods or services: if customers are not VAT payers, voluntary registration would not be required.
The normal VAT rate for goods and services is 19%, while the reduced rate is 9% and 5%; in certain cases, a VAT relief can also be granted.
Registration of the VAT payer usually takes about 10 working days. In order to be registered as a VAT payer, the following information must be provided:
company registration certificate; Information on objects of economic activity and associated addresses, telephone numbers, fax numbers, e-mails, websites, etc.; Information on planned and implemented activities according to the statistical classification of economic sectors; information on methods of doing business; Information about persons who direct the company and other entities controlled by these persons; Information about real estate or other long-term assets that are available to the company and can be used in future business. Mandatory registration as a VAT payer A company is obliged to register as a VAT payer in the Republic of Lithuania in the following cases:
If the income from the sale of goods and the provision of services in the Republic of Lithuania has exceeded LTL 100,000 in the last 12 months. If the VAT payer in Lithuania buys goods from other EU Member States (except for new vehicles or excise goods), the value of which exceeds LTL 35,000 in a calendar year. When a person manages multiple legal entities and the combined annual income of these (last 12 months) exceeds LTL 100,000. The obligation to register as a VAT payer applies to all these businesses, even if the income in each of these businesses does not exceed LTL 100,000. Compulsory registration of foreigners as VAT payers Registration is compulsory for foreigners starting economic activity in Lithuania (they must register at the beginning of their economic activity, i.e. without taking into account the LTL 100,000 threshold). Registration is obligatory for persons from EU member states who make distance sales to persons in Lithuania, as well as in cases where the value of the delivered goods exceeds LTL 125,000 in a calendar year.
Market access for goods is a group of measures set by a country's government to regulate (limit, control or facilitate) the importation of certain goods into the country. These rules can be divided into tariff and non-tariff measures. Tariff measures are taxes levied when certain goods are imported into the country, such as: B. Excise taxes. Non-tariff measures are methods that apply rules other than taxation, e.g. Quotas for the import of certain goods. It is important to know the specific market entry rules in order to develop an effective market entry strategy, otherwise the delivery of your products will be hampered and your company's advancement will be halted.
In Latvia there are two different groups of market access rules:
apply to imports from EU countries apply to imports from non-EU countries Market access from the EU Since one of the goals of the European Union is to create a unified economic and trade environment, market access to Latvia from other member states is not difficult. Goods imported into Latvia to other EU countries or exported from Latvia are not considered import or export – they are treated as goods in free circulation. Thus, when crossing the Latvian border, they are not subject to customs declaration and VAT payment. However, declarations must be prepared in advance – while there are no stationary customs offices on the borders between Latvia and other EU member states, there are special mobile customs units designed for random control of commercial vehicles.
For imported or exported goods to be considered goods in free circulation, they must belong to one of the following categories:
Goods made in the EU using only materials made in the EU Goods that have been released for free circulation in the EU countries, even if they were wholly or partly manufactured in a non-EU country Goods manufactured in the customs territory of the EU from goods belonging to the other two categories Market access from outside the EU Market access to Latvia for goods from a non-EU country is not that easy and involves import taxes and obtaining licenses. The main difference is that goods outside the EU are controlled by a customs office on the border with Latvia. The entering party must provide a declaration of the goods, pay any applicable taxes and duties, and undergo any other procedures required by law. Unlike goods imported into Latvia from other EU Member States, goods imported from a third country are not considered goods in free circulation, hence the above procedures.
There is also a difference between preferential and non-preferential import goods. While non-preferential goods must go through all procedures, preferential goods can be imported without any particular restrictions. In Latvia, preferential goods are mainly exempt from customs duty. This also applies to devices that meet certain conditions, e.g. Machines used by a company ending its activity outside the EU and moving to the EU, scientific, cultural and similar inventory, their spare parts, etc.
It should be noted that Latvia is a party to CITES (Convention Concerning International Trade in Endangered Species of Wild Fauna and Flora) or the Washington Convention and the import of some goods is completely banned or severely restricted. These are mainly goods originating from endangered animals and plants or from these species themselves, such as ivory, coral, turtle shells, etc. The export of these goods to Latvia is only allowed under exceptional cases specified in the Convention.
This area is governed by the Alcoholic Beverages Management Act, Cabinet Order No. 662 “Procedures for Movement of Excise Goods” and the Excise Duty Act. The sale of alcoholic beverages and tobacco products requires a special permit - license. (The Excise Duty Act lists the types of alcoholic beverages and tobacco products that require permits.) For example, alcoholic beverage retailers who sell beer only need a permit for the retail sale of beer. A license authorizes the sale of alcoholic beverages or tobacco products only at the location specified therein. A license may only be used by the person for whom it was issued.
The Licensing Commission of the State Finance Service grants licenses to merchants entered in the Commercial Register for the following activities:
wholesale of alcoholic beverages and tobacco products; retail sale of alcoholic beverages and tobacco products. The procedure for obtaining a licence includes following activities:
documents for obtaining a licence are submitted by an official representative of the merchant whose signatory powers are registered in the Commercial Register or a person authorised by the official representative of the merchant; the samples of the application form is available in the Appendix No. 7 and No. 8 of the Cabinet Regulations No. 622 “Procedures for the Circulation of Excisable Goods”; in the application for obtaining a licence, the preferable means of receiving the permit (in paper or electronic form) should be specified (in compliance with the legal provisions on circulation of electronic documents); a licence shall be issued for an indefinite period of time; if a merchant additionally applies for retail sale of alcoholic beverages and beer in a booth, then the retail sale shall be allowed for a period of time specified by the binding regulations of the local government; the application must be submitted with the following documents: documents confirming the right to use the business premises; explanation of the process of economic transactions and the financial security in case if the application is submitted to obtain a wholesale licence; confirmation by the merchant that the local government has agreed on retail sale of alcoholic beverages in the booth, if the application is submitted to obtain a licence for this exact purpose; the administrative commission considers applications and issues authorizations or makes a reasoned decision to refuse issuance of a licence; the licence becomes valid on the next day after the decision is made; the licence can be used only by the merchant to whom it was issued. The merchant is not entitled to transfer the licence to another person; in case of refusal, the application can be re-submitted. A licence may not be issued in the following cases:
the relevant licence of the merchant has been revoked or the record of the place designated for the sale of alcohol beverages or tobacco products has been deleted during one year before submitting the application due to violations of legal provisions related to circulation of excise goods; a merchant has carried out commercial activities involving excise goods without a relevant licence; the merchant or an official of the merchant's administrative body has not paid the fine imposed due to violation of legal provisions related to circulation of excise goods; the application or accompanying documents contain false information, or accompanying documents are forged; the merchant has been avoiding taxes during three years before submitting the application; the merchant's administrative body includes individuals who during three years before submitting an application have been members of the administrative body of the merchant that has avoided tax payments; the merchant has excise duty debt, except for the cases when the deadlines are extended in accordance with the tax laws and regulations, and payments are made in due time; not all of the information or documents to be accompanying the application are submitted upon request by the Licensing Commission; operations involving excise goods are conducted in places where such activities are prohibited according to the legal provisions governing the circulation of excise goods; state fees referred to in the laws and regulations have not been paid.
The 2008 Latvian financial crisis, which emerged from the 2008-2009 global financial crisis, was a major economic and political crisis in Latvia.
Latvia is the Eastern European country hardest hit by the global financial crisis; it lost about 25 percent of its GDP from 2008 to 2010. It was also the most overheated pre-crisis economy. But in the second half of 2010 Latvia returned to economic growth.
Latvia has a population of 2 million and its annual GDP is 23 billion euros ($30 billion). But the troubles this Baltic country has been experiencing since 2008, when it kept the lat, its official currency, pegged to the euro while fiercely tightening fiscal policy has sparked a major row among most critics.
Latvia has been the subject of intense attention during the financial crisis due to the economic policies it has put in place to get its economy back on track. By maintaining its currency peg, adjusting through internal devaluation and frontloading austerity measures, this nation of 2 million people is now, 5 years later, back on a strong economic footing, although it may have been quite painful to get there.
As elsewhere, Latvian politics reacted too late to the boom; had good relationships with parent banks; avoided a large production drop thanks to deviations from strict currency board rules; had rapid productivity gains; and for policy purposes output growth may be as important or more important than its level.
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