Latvia attractive to foreign investment

RIGA - U.S. investors are planning a global service center in Latvia, says American Chamber of Commerce Latvia president and lawyer with Klavins & Slaidins, Ivars Slokenbergs. “Currently, one U.S. company is planning a global service center for Latvia. It totals several tens of millions of euros in investment creating several hundred new jobs. This would be a service center, employing several hundred people carrying out various support functions - financial, accounting and telephone services,” says Slokenbergs.

He says that over the past 25-30 years, the U.S. has looked to Asia, and more recently to India for off-shore business activities, but is now looking at other sites. Latvia can also be attractive for such projects. “I think that Latvia is ready to attract such investors, not only from the U.S., but also from other areas around the world,” he added.

There are other investors who are interested in Latvia, to produce electronic machine components, machines and machinery parts, for example. The investment environment is being studied, but Latvia still has to compete with other countries. “Latvia’s resources – its forests, wood products and biomass are also interesting to investors,” notes Slokenbergs.  He points out that Latvia is not the only place where investors are looking to locate plants or, for example, global service centers. “There have been instances where investors have evaluated Latvia, and then gone to Hungary or Lithuania, because there they have found a more conducive business environment, whether it is the tax burden, or public assistance for property development. There are various reasons why an investor chooses to favor one or the other country. There is fierce competition, and Latvia has to fight for every investment,” he says.

U.S. investors are looking in Latvia at its lower building, leasing and wage costs, coupled with a productive and educated workforce with high work ethics and foreign language skills. Also beneficial is its geographical location. Latvia needs to ensure stable laws, tax policies and the predictability of state and local activities with better coordination with investors, highlights Slokenbergs.

Ministry of Economic Affairs data show that the U.S. is the ninth largest investor in Latvia. In 2009, U.S. direct investment was 350 million euros, which is about 10 percent more than in 2008. Latvian investment in the U.S. in 2009 was 1.3 million euros.