Business Environment in Latvia H.E. Mr. Alberts Sarkanis, Ambassador to the Czech Republic Business Environment in Latvia 12.04.2017 Prague

Latvia in facts Capital: Riga Area: 64 589 km2 Population: 1,95 million (2017) Official language: Latvian Dominant foreign languages: Russian, English and German Currency: Euro (€) Total national border length: 1862 km Length of Latvia’s coastline: 494 km Agricultural land: 18 850 km2 (2015) Forest land: 35 750 km2 (2014) Major ports: Riga, Ventspils, Liepaja Business Environment in Latvia Source: Central Statistical Bureau of Latvia

Latvian Euros (€) Business Environment in Latvia

International memberships European Union (2004) Eurozone (2014) United Nations (1991) North Atlantic Treaty Organization (2004) Organization for Security and Co-operation in Europe (1991) World Trade Organization (1999) Organisation for Economic Co-operation and Development (2016) Business Environment in Latvia

Macroeconomic indicators Business Environment in Latvia

Gross domestic product (GDP) * Forecast of the Ministry of Finance Business Environment in Latvia Source: Central Statistical Bureau of Latvia

Monthly wage and employment 2013 2014 2015 2016 2017 * 2018 * Monthly wage Average monthly wage of the employed in the economy, EUR 716 765 818 859 910 1013 Growth at current prices, % 4.5 6.8 5.0 5.5 Employment Employment, thousands 894 885 896 893.3 900 901 Growth, % 2.1 -1.0 1.3 - 0.3 0.2 0.1 Unemployment rate, %  11.9 10.8 9.9 9.6 8.4 8.0 * Forecast Business Environment in Latvia Source: Ministry of Finance Republic of Latvia

Foreign direct investments Business Environment in Latvia

Foreign direct investments in Latvia (FDI) FDI (billion EUR) Top 5 countries by FDI in Latvia (million EUR, 2016 Q4) Sweden 2120 Cyprus 1310 The Netherlands 982 Russia 1320 Estonia 937 Data provided by Lursoft.lv shows that top 5 countries by FDI in Latvia are: Sweden 1637.42 The Netherlands 744.14 Cyprus 588.18 Norway 558.89 Russia 558.40 Business Environment in Latvia Source: Bank of Latvia

Foreign trade Business Environment in Latvia

Exports and imports of goods (billion EUR) Business Environment in Latvia Source: Central Statistical Bureau of Latvia

The main export and import partners of goods (million EUR, % 2015) Lithuania 1967.31 (18.97%) Estonia 1203.65 (11.61%) Russia 833.98 (8.04%) Germany 6673.64 (6.50%) Poland 625.80 (6.03%) Import Lithuania 2170.10 (17.31%) Germany 1411.53 (11.26%) Poland 1390.80 (11.09%) Russia 1075.92 (8.58%) Estonia 948.74 (7.57%) Business Environment in Latvia Source: Central Statistical Bureau of Latvia

Exports and imports of services (billion EUR) Business Environment in Latvia Source: Bank of Latvia

The main export and import partners of services (million EUR, % 2015) The United Kingdom 388.25 (9.61 %) Switzerland 366.77 (9.07%) Russia 349.72 (8.65%) Lithuania 263.74 (6.50%) Sweden 210.70 (5.21%) Import Lithuania 245.99 (10.80%) Germany 143.30 (6.29%) The United Kingdom 136.62 (6.00%) Estonia 99.59 (4.37%) Ireland 93.29 (4.10%) Business Environment in Latvia

Latvia’s credit ratings 2017 The Fitch Ratings Moody’s Standard & Poor’s R&I Rating A - A3 BBB + Outlook Stable Business Environment in Latvia Source: Public Finance Management

Investment environment in Latvia Business Environment in Latvia

Infrastructure An extensive and functional road network, connecting both European and CIS road networks, as well as Latvia’s ports; Free ports in Ventspils, Riga and Liepaja; The shortest route between the EU and the CIS; Riga International Airport as a fast-growing airport provides a competitive international passenger hub, and a high-speed cargo distribution centre; Business Environment in Latvia Source: Investment and Development Agency of Latvia

Skilled and motivated workforce The labour force in Latvia is well educated, with one of the highest rates of university attendance in the world; 36 institutions of higher education, 3 of which are branches of foreign universities; There are more than 5700 students studying in higher education programs for engineering, electronics and metalworking; Latvia’s history has prepared its workforce with knowledge of business and cultural norms that enable partnership particularly with Russia and other CIS partners, as well as with western European countries; Business Environment in Latvia Source: Investment and Development Agency of Latvia

Tax system in Latvia Latvia’s total tax rate of 35,9% for businesses is the lowest of the Baltic States and the 12th lowest of the EU and EFTA region.2 Source: 1. Ministry of Finance Republic of Latvia 2. PricewaterhouseCoopers - PwC Business Environment in Latvia

Special economic zones in Latvia Business Environment in Latvia Source: Investment and Development Agency of Latvia

Transport infrastructure in Latvia Business Environment in Latvia

Key elements of transport infrastructure Business Environment in Latvia Source: Ministry of Transport of Republic of Latvia

Cargoes loaded and unloaded at Latvia’s ports Business Environment in Latvia Source: Central Statistical Bureau of Latvia

Latvian railway infrastructure Total length of lines – 1859 km Total length of 1520 mm gauge lines – 1826 km Length of electrified lines – 248 km 152 stations Business Environment in Latvia Source: Latvijas dzelzceļš (Latvian Railways)

Rail freight transportation in the Baltic States (million t) Business Environment in Latvia Source: Latvijas dzelzceļš (Latvian Railways)

Rail Baltica – Railway line from Tallinn to Berlin Business Environment in Latvia Source: Ministry of Transport of Republic of Latvia

Embassy of the Republic of Latvia Detailed information online: Contact information: Embassy of the Republic of Latvia Hradešínská 3 , 101 00 Praha 10 T. + 420 255 700 881 embassy.czech@mfa.gov.lv Detailed information online: Ministry of Economics www.em.gov.lv Ministry of Finance www.fm.gov.lv Bank of Latvia www.bank.lv Investment and Development Agency of Latvia www.liaa.gov.lv Business Environment in Latvia