The regulatory framework, which turns 10 this year (since the Cabinet of Ministers adopted protocol N 48 on September 27, 2016), is designed to "promote the creation of new enterprises in Latvia, thereby facilitating research as well as the use of innovative ideas, products, or processes in economic activity."
Concepts enough for 20 enterprises
This is the number of startups that, according to the Ministry of Economics, can be supported over the course of a year thanks to the Law on Supporting the Activities of New Enterprises and the conceptual communication "On the Start of Entrepreneurial Activity and the Ecosystem of Entrepreneurial Activity and Necessary Future Support Stimuli." The state:
- Supports minimally fixed payments for each employee;
- Assists in attracting highly qualified labor;
- Ensures the creation of a network of venture capital investors.
"Latvia is the number 1 choice for new enterprises in the Baltic States," proclaims the Ministry of Economics, however, statistics from 2017 to 2025 do not indicate a rapid growth of startups. During this period, 69 applications for labor (45 supported), 181 for tax support (138), and 33 for venture investments (25) were submitted.
Strangely enough, during the time of the corona crisis – 2021-2022 – "there was a rapid increase in the number of applications." "Analysis of the turnover dynamics of 98 new enterprises shows that within the support program from 2014 to 2024, the total turnover... amounted to 119.3 million euros," the document from the Ministry of Economics states. At the same time, 16 out of 98 firms have already been liquidated.
In any case, among 150 countries in the world where startups operate, Latvia ranks 49th – at the end of the first third, which is not so bad.
IT specialists are leading the way
Analysis of the distribution of support recipients by sectors of economic activity (NACE codes) shows that the largest share belongs to the information and communication technology sector. The dominant sector is computer programming, which employs 36.7% of the total number of enterprises.
The second largest share belongs to the data processing, hosting, and related activities sector, represented by 11.2% of firms.
A significant share of beneficiaries is in the field of research and development, especially in natural sciences and engineering, where 5.1% of companies operate. There are also "other activities in information technology and computer services," as well as web portal management. A smaller number of enterprises engage in business consulting and management consulting, professional, scientific and technical services, engineering, trade, manufacturing, and healthcare.
Going for export
Some companies, the Ministry of Economics notes, "have achieved relatively small sales volumes typical for early-stage new enterprises, while others have demonstrated significant market penetration, including sales volumes exceeding 1 million euros."
"Sales results largely depend on the stage of project development and the industry in which it operates. Developers of digital solutions and software products typically demonstrate faster market penetration and initial sales results, while developers of technologically more complex products, such as medical technologies or hardware solutions, are characterized by longer development and certification cycles, which, accordingly, affects the pace of commercialization."
Relying on local resources
The total number of employees in startups has increased by 37.6% thanks to state support (the volume of taxes paid has tripled!). However, our companies are not yet very internationalized:
"There is a trend that in the last two years, highly qualified employees have been hired predominantly from Latvia. Previously, they were hired from EU member states and Middle Eastern countries." The Latvian Investment and Development Agency inquired with startups covered by programs where they sell their products.
"Most respondents have existing export markets, and several companies export a significant portion (40-60%) of their turnover, including to the USA, EU countries, Middle Eastern countries, and other countries outside Latvia. In some cases, the export volume accounts for almost the entire net turnover of the company, indicating high international competitiveness. At the same time, some companies are still planning to start exporting or entering target markets, indicating varying levels of readiness for internationalization."
Giving more than receiving
Nevertheless, overall, the state has received much more tax revenue from startups than it has provided in support, according to data from the Ministry of Economics. And in general, happiness is not in money: "enterprises emphasize the need for practical, targeted support, especially in the areas of export assistance, business development, and B2B coaching, as well as in the implementation of process and digital solutions."
Organizations such as Startin.LV, LatBAN, TechChill, and Startup House Riga operate in the field of startup consolidation. On average, 150 new enterprises participate in experience exchange sessions annually. The Riga Technical University provides significant support in the acceleration of startups.
However, the funds allocated from the budget for 2026 look simply ridiculous – only 400,000 euros. Meanwhile, neighboring republics stand out with competitive advantages:
- In Lithuania, the cryptocurrency market is developing very actively;
- In Estonia, the minimum wage is significantly higher, plus there is an "e-residency" system, where a company can be registered remotely in the country while physically conducting its activities anywhere in the world.
