Four reasons why UK businesses should look to Latvia – London Business News | Londonlovesbusiness.com

Latvia offers a compelling proposition for UK businesses seeking to expand their European operations. As a member of the European Union, Latvia provides easy access to the single market, while also offering a competitive business environment.

The Baltic nation has consistently demonstrated strong economic growth, with foreign investments growing yearly. The country ranks #2 in the International Tax Competitiveness Index among OECD countries, making it an attractive destination for businesses seeking tax efficiency.

But what makes the country stand out from others? Why would British companies seek to invest and expand their business there? We give you four reasons.

Reason 1: A world-class, multilingual talent pool

Latvia boasts a highly skilled and motivated workforce, with 86% of the population holding secondary or higher education. The country also has a high rate of multilingualism, with 96% of the population speaking at least two languages. Many Latvians are actually fluent in multiple languages, including English, French, German, and Russian, making them highly adaptable to international business environments.

Latvia’s highly skilled workforce, particularly in IT, finance, and engineering, coupled with high-quality education programs offered by Latvia’s universities, contributes to a dynamic and diverse academic environment. The country is also home to renowned research institutions, such as the Latvian Institute of Organic Synthesis and the Institute of Solid State Physics.

Reason 2: A strong culture of innovation

For decades, Latvia has held a reputation for being an R&D hub for information and communication technologies. In the 1930s, the world’s smallest photo camera was invented here. Nearly a century later, Latvia is one of Europe’s pioneers in developing 5G-enabled technologies.

In 2020, the Latvian Ādaži military base became the first innovative 5G military test site in Europe. 5G innovators from all over the world can use this testbed for the research and testing of new 5G defense technologies.

The Latvian capital, Riga, has emerged as a thriving tech hub that attracts international tech companies, such as Accenture and Tietoevry. Latvia and the UK also share business ties in the ICT sector, as evidenced by tech companies like GoCardless and Giraffe360.

Latvia’s innovative spirit is further exemplified by a study conducted by Cambridge Executive MBA students exploring Riga as a fertile ground for metaverse-related ventures. The research identified Riga’s potential to emerge as Europe’s next thriving Metacity, emphasizing its robust digital infrastructure, dynamic tech ecosystem, and forward-thinking governance.

Reason 3: Cost-effective manufacturing conditions

What do electronic equipment and wood have in common? They both are Latvia’s most exported goods!

Latvia’s wood industry—supported by vast forests covering over 50% of the country—is a key driver for attracting foreign businesses. For example, BSW Timber – now the largest sawmilling company in the UK – has 11 manufacturing sites across the UK and Latvia, producing certified timber products for various industries, from landscaping to construction. The company’s Latvian sawmill, a 35-hectare site on the outskirts of Riga, houses state-of-the-art machinery and produces 220,000m3 of sawn timber annually.

Latvia has a long-standing tradition in manufacturing, including woodworking, metalworking, and electronics. Compared to many Western European countries, Latvia offers competitive labor costs, making it a cost-effective location for manufacturing operations. Evopipes, a leading European pipe producer based in Latvia, is another example of a company with British board members that has found success in the country.

Reason 4: Vast renewable energy potential

Latvia boasts a significant share of renewable energy in its energy mix, ranking third in the EU (according to Eurostat’s 2022 data). The country has high potential for green energy investments, particularly in wind and solar.

The strong commitment to clean energy has attracted innovative companies with British leadership, like Baltic Hydrogen Group, which is at the forefront of developing and deploying sustainable hydrogen solutions. The company recently announced the successful completion of a partial seed round investment from HelioFidem, a UK-based renewable energy company.

Latvia’s supportive business environment and commitment to renewable energy have also attracted Fokker Next Gen, a Dutch company developing a hydrogen aircraft project in Latvia. The company is benefitting from the support from local authorities and leveraging the country’s abundant renewable energy resources, including the Elwind offshore wind park, which will provide a large amount of energy at a competitive price. This collaboration highlights Latvia’s potential to become a hub for innovative, sustainable energy solutions.

Pick your reason

The Latvian government is committed to supporting business growth and has implemented a range of initiatives to attract foreign investment. From startup visas to a competitive tax regime, UK businesses increasingly choose Latvia for a wide variety of reasons.

Let us help you find yours – get in touch with the Investment and Development Agency of Latvia to discover what Latvia has in store for your particular business.