Advantages for start-ups
In order to facilitate fast-growing start-ups and promote the use of innovative ideas, products or business processes, start-ups in Latvia may receive State aid. The aid programs and their granting criteria are defined by the Law on Aid for the Activities of Start-up Companies.
One of the types of support allows start-ups to reduce their labour costs. There are two support mechanisms: the possibility of paying a fixed social tax on an employee and not paying a personal income tax or obtaining 45% co-financing for the remuneration of high-qualified workers.
Granting the right to purchase capital shares is a bonus system that allows companies to attract and motivate employees.
The right to purchase capital shares, or share options, enables employees to acquire shares of the company at nominal price or free of charge after a certain period of time, regardless of the actual fair value of the shares. The employee has the opportunity to realise shares and get capital gains if the value of the company has increased.
A start-up visa allows founders of start-ups who are not citizens of the European Union to travel without a visa throughout the Schengen area and receive a certified e-signature.
Up to five founders of the same company may apply for a visa program for Latvian start-ups. The start-up visa for founders of start-ups who are not citizens of the European Union, and their spouses and children, provides the opportunity to obtain a temporary residence permit for up to three years. Flexible conditions are set for the renewal of a visa. The main criterion for getting a start-up visa is an innovative, scalable start-up idea with high growth potential.
The Investment and Development Agency of Latvia provides support programs to boost the growth of start-ups, such as the International Competitiveness Program, the Innovation Voucher Program and others.