Latvia, which is one of the most important favorites of foreign investors, stands out with its amount of investment increasing day by day. Considering the latest data announced at the end of 2019, it is seen that the amount of foreign investment has exceeded 7 billion Euros. A total of 13,300 new businesses were established in Latvia in the previous year and a significant portion of them started operations in the capital Riga. The Baltic countries offer different opportunities for investors and are therefore more preferred recently.
Estonians Prefer Latvia for Investment
When looking at foreign investments in Latvia, it can be said that the most important share belongs to Estonians. Due to the general situation in the world, while the amount of foreign investment coming from almost all countries has decreased, it is seen that the amount of investment from Estonia has increased. For example, investments from Russia have decreased by 183.2 million Euros, and investments from Lithuania have decreased by 17.4 million Euros.
It can be said that Estonians generally have a special interest in Latvia for investment. The number of investments made by Estonia of 10 million Euros and above was five last year. However, Lithuanians did not have a single investment of this size in the same period.
It was Germans who made the most important development in foreign investments coming to Latvia last year. The investment amount of Germans was 365.3 million Euros in this period. Around 288 million euros of this amount belong to the German building materials manufacturer Schwenk.
The majority of the investments made by Schwenk Company are in the form of a cement production facility, two cement raw material mines, an aggregate quarry, six rapid mixing plants, etc. As can be understood from here, the company has made a serious investment in Latvia by purchasing a ready and working factory. Besides, 38% of the acquired company’s share in a different cement factory in Lithuania is among those purchased.
The cement company, which is the main reason for the rapid rise of the Germans, caused a decrease in the investments of the Spanish. Because it is known that the former owner of the cement factory was Spanish or the investment had come from Spain.
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Major Parts of Investments are made in Riga
When foreign investments are examined in 2019, it will be seen that the amount of investment in 48 municipalities has increased. Saulkrasti  stands out with its rapid rise among these municipalities. While the total investment made in this municipality in 2018 was only 145.350 Euros, the investment amount made in 2019 was 26.26 million Euros. In other words, the investment increase is around 18000%. To put it differently, the investments increased 180 times.
Most of the districts in the country have managed to attract foreign investment. However, investments in some of them decreased compared to the previous year. Their number is around eight. Besides, four districts could not get investment in 2019, although they had received foreign investment in the previous year.
Most of the foreign investors coming to Latvia prefer the capital Riga. Although the amount of foreign investment decreased by 3% last year, 75% of foreign investments are still made in Riga. This situation can be expressed as a serious success for Riga.
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The Interest in Property Companies are Increasing
It is a fact that foreign companies coming to Latvia show more interest in some sectors. There may be shifts between sectors according to the general conjuncture in the world. The fastest increase last year was in health and social care services. The volume of foreign investment in these sectors increased by about 28% and the investment amount increased by 2.4 million Euros, reaching the 10 million Euro threshold (9.96 million). On the other hand, it should not be forgotten that there has been a slight decrease in sectors such as transportation and storage.
When a financial analysis is made, it will be seen that the lion’s share belongs to property companies. There has been an incredible increase in property sales in Latvia in recent years. While the amount of increase in investments in property companies in 2019 was 235 million Euros, the total investment amount exceeded 1.38 billion Euros. One of the most important signs of how much property will develop in Latvia is the increase in the amount of foreign investments.
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Igors Krumins continues his activities as a commercial and international lawyer within the body of “Jurmala Invest”. He has more than 10 years of experience, especially in the investment sector, and has provided consultancy services to numerous companies with his legal expertise. He successfully completed his undergraduate studies at Baltic International Academy and graduate studies at Latvijas Universitate. Apart from his native Latvian language, he can also speak Russian and English fluently.