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IAWP International Panel
“The World Marketplace - Working with Foreign
Companies”
Latvia
Brief overview on Latvia’s key facts.
Government type:
Parliamentary Republic
National language: Latvian
Capital:
Riga
National currency: Lats
(1 Lat = 2.2 USD)
Population: 2 294 600
(Economically Active Population –
1 015 300)
GDP: $ 25.6 billion in 2006
GDP per capita: $ 11 217 in 2006
Riga – Metropolis of the Baltics
• Large
• Beautiful
• Cultural
• Ambitious
• Educated
• Hospitable
Labor force administration.
State Employment Agency (established
in 2003)
consists of:
–the board,
–27 affiliated offices,
–25 sectors, and
–3 client service centers.
Brief overview on Latvia’s key facts, labor administration and unemployment.
State Employment Agency’s Services:
Registration of
jobs & unemployed
Staff selection
Vocational counseling/
career guidance services
Vocational training at
various professions
Organizing paid
temporary work
Labor Market
Analysis& Forecasts
Subsidized jobs for
Cooperate with
Employers/Businesses
(long term unemployed, youth,
ex-offenders, before retirement
age and disabled individuals)
Subsidizing jobs for
school children (age: 14 – 18)
during summer holidays
Information exch.
vis-à-vis
European Union
Why Latvia?
 Low and easily
understandable taxes
 Highly educated and
motivated labor
 Liberal employment
legislation
 Well connected by flights
 Developed financial and IT
sector
 Easy to set up and manage a
business
Riga: well connected flights
Latvia – Gateway between Europe
and CIS
Excellent Business Environment
30
25 %
25
24.09 %
20
%
18 %
15 %
15
9%
10
5
0
CIT
Income tax
Employers social Employee social
tax
tax
VAT
(sales tax)
10
5
0
15
24
19
26
28
Germany
28
Norway
30
Sweden
25
Finland
30
Slovenia
19
Slovakia
21
Poland
15
Lithuania
15
16
Latvia
20
Hungary
Estonia
25
Checz. Rep.
UK
40
USA
Tax, %
Corporate Income Tax
45
39
35
29,8
Liberal labor legislation
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Working time: 8 hours a day (40 hours a week)
Annual vacation: 20 working days
25% residential income tax
9 % social tax (res.)
24% social tax (empl.)
Termination of contract with employees: notification
1 month in advance
Growth of Investment Among the
Highest in EU
8.00
7.22
7.00
5.74
6.00
5.00
4.03
4.00
3.00
2.65
2.68
2.64
2001
2002
2003
3.36
2.24
2.00
1.00
0.00
2000
2004
Source: Bank of Latvia
Cumulative FDI into Latvia (Accumulated stock in billion EUR)
2005
2006
2007
Passenger flow Growth at
Riga International Airport
3500
3160
thousands of passengers
3000
2495
2500
1878
2000
1500
1060
1000
500
310
398
504
506 535 555
562 574
623 633
712
Source: Riga International Airport
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
0
Investors
FDI share by country, 2007
Estonia
14,2%
Other
23,6%
Sweden
12,5%
Norway
3,7%
Germany
10,2%
Cyprus
4,8%
United
States
5,0%
Source: Bank of Latvia
Netherlands
5,4%
Russia
5,8%
Finland
6,2%
Denmark
8,5%
Major U.S. Investment Projects: Jeld Wen
Major U.S. Investment Projects: GE Money

In 2004 GE Consumer Finance entered
Latvia bought two local consumer finance
companies, 210 employees

In 2005 GE Money Swedish subsidiary
established shared services center in Riga
for its Scandinavian operations:
number of employees - 100

In October 2006 GE Money
entered retail banking sector:
assets EUR 363 mio, loan portfolio EUR 157
mio, 550 employees
Overview of Labor Costs, 2007
Position
Net Salary
(EUR)
Gross Salary
(EUR)
Total Employment
Costs incl. full social
taxes (EUR)
From
To
From
To
From
To
Unskilled workers
498
640
667
858
827
1 064
Skilled workers
640
783
858
1 049
1 064
1 302
Highly skilled
workers
711
996
953
1 335
1 182
1 656
Engineers
854
1 423
1 144
1 907
1 419
2 366
Department
managers
1 423
2 134
1 907
2 860
2 365
3 549
Top managers
2 134
3 557
2 860
4 767
3 549
5 915
1 EUR = 1.7 $
Source: HR company CVO Technology People, 2007
Perfect place for business - and leisure !
Thank you for attention!
Nils Freivalds, IAWP Latvia Chapter