Latvia’s Cabinet of Ministers has approved an Economics Ministry programme to lower taxes and co-fund the salaries of highly qualified employees at start-up companies in 2017. The Economics Ministry has been charged with organising a EUR 3 million programme to co-fund wages when start-ups lack financing to hire qualified specialists. The plan is to be submitted to the full Cabinet of Ministers on October 11.
The ministry also has proposed easing up the rules of business for early-stage start-up enterprises. Under the new plan, start-ups would pay a fixed tax of EUR 252 a month for each employee, to be paid into Latvia’s social budget. Start-ups would be exempt from the income tax. The Economics Ministry says that the rules would apply to companies which manufacture, develop and sell innovative products for the first five years of their operations. Attracting risk capital investments would be a prerequisite for support from the state.
Economics Minister Arvils Ašerādens (Unity) says that start-ups play a great role in promoting Latvia’s economic growth, also boosting innovation and creating products with a high level of added value. “That’s why Latvia must create a business environment that is conducive for the further growth of these companies and for the creation of products with a high level of added value, as well as new jobs,” the minister says.
There are some 20 start-up companies in Latvia at this time that would be eligible for the new plan, but Mr Ašeradens says that his ministry hopes to double that number soon. Other tax initiatives to help out budding enterprises are to be rolled out in 2018.