Latvia

Latvia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Latvia

  • Visa free travel into 179 countries, including US and Canada.
  • Long standing partner of NATO, the EU, the EUR Zone Schengen since accession.
  • GDP per capita of Latvia is 18,000 USD per year.

Property prices are still below 1,000 EUR, but the new ones in the capital city will cost 2,000-7,000 EUR/m2.

The yields are not great (around 4%), but investing in Riga's Old Town may bring you the yield of 6-7% annual yield.

GDP has sustained stable and Latvian economy is really good' in the years of pandemic it only dropped by 3.5%, which is much better than most of the West-European countries.

Salary increase has been 600 to 860 EUR in the last few years.

National debt is around 50% of GDP.

Tourist numbers are growing steadily.

The process of buying real estate is simple and regulated; and it is very fast.

Residence permits on the grounds of owning real estate
250,000 EUR investment into Latvian properties is necessary to obtain this kind of residence permit. You would not be permitted to buy agricultural land, woods or forests though. Each property you buy would have to be valued at least 80,000 EUR to join the scheme, to which a 5% state tax is added and a 2% state duty. The residence is then granted to the dependants such as spouse, minor children and parents.

The residence permit is granted for 5 years with the annual renewable requirement.

Residence permits on the grounds of company formation
This is not exceptionally necessary and not even advised for taxation reasons once you apply for the residence permit on the grounds of purchasing a property.

Taxes & Rental income tax
Dual citizenship is permitted but the profit derived globally does get taxed. Personal income tax rate is 31%, CIT is 20%, VAT is 20%, social security tax is 35.09% and they charge taxes on the worldwide income.

Purchasing estates is cheap - the buy-sell costs are very affordable. 21% VAT on the new builds; older buildings are 2% stamp duty and 0.5% of the notary; sales party pays 3%.

No inheritance tax, no city tax, no wealth tax. CGT is 20% (up to 20,004 EUR) - 31% (above 64,000 EUR) and fairly good deductions are allowed. Alternatively a 10% flat fee tax is allowed with no deductions.

Property taxes are higher than in Lithuania or Estonia, but lower than in the Western Europe.

Which residence permits offer a path to permanent residency and citizenship?

Various, such as spouse residence permit, employment, etc. You can apply for a passport after 5 years of permanent residence, which makes it at least 10 years of living in Latvia.

Restrictions & Challenges
20% sales rate is applied to the new builds.
The population of Riga and Latvia is actually going down, which is not a good indicator to invest in the real estate market, and is different to the other Baltic states capital - Vilnius or Tallin.

There are a lot of foreign buyers - up to 70% in Riga. There is risk of depression when they liquidate their investments.

Unemployment is quite high.

Latvian ecosystem is small, yet vibrant, it consists of highly motivated multilingual (often with at least 3 languages or more) talented people of various age and backgrounds. The startup environment is dynamic and rapidly growing. To nurture this growth, all important stakeholders have joined hands together.

Latvian startup infrastructure consists of 400+ registered startups, a pool of institutional investors and business angels, a diverse range of modern co-working spaces, dozens of business incubators fuelled by the government, academia and private individuals, as well as full of exciting gatherings, productive conferences, hackathons and meetups. The capital city Riga hosts numerous annual Tech & Innovation conferences: the iNovuss, Deep Tech Atelier, Riga Tech Girls, TechChill and others. Moreover, a unique Startup Law has been passed and Startup Visa, officially - temporary residence permit, has been created in order to make Latvian startup ecosystem even more vibrant and productive.

>Growth And Business Advantages

As European Union is starting to get back on track after the pandemic and economic forecast by European Commission is also becoming more optimistic. Latvian indicators in this forecast are not the exception. In this briefing, figures provided by the EC Spring 2021 Economic Forecast are analysed. Also, the financial sector is playing a big role in the recovery of the country after the pandemic, so understanding the trajectory of its development is essential. Considering that the financial sector in Latvia is one of the most developed areas in the country, the issue of faster and more efficient improvement remains even more acute.

The Latvian economy will grow by 3.5% this year (GDP growth) and consumption are going to return to the pre-Covid level, additional stimulus to the economy will be provided by an increase in investment, including due to a significant inflow of European Union (EU) funding.[ii] In 2021 Latvia’s state support for entrepreneurs and households has significantly increased compared to 2020, while the state budget deficit is growing accordingly. The budget deficit reached 4.5% of the GDP in 2020, but this year it is already forecasted at 7.3%. In turn, the EC forecasts that next year the Latvian GDP will grow by 6% and the budget deficit will be reduced to 2%.

Consumer price inflation was lowered in 2020, displaying decreasing energy prices and low service prices, because of the low demand. More expensive energy and service prices over the projection period are set to raise headline inflation to 1,7% in the current year and 2% in 2022.

Latvian government has particular interest and determination in boosting the development of startup environment, therefore, the support is provided at various stages: ideation & conceptualization, initiation, development and expansion. No matter what stage you have reached – there is a support mechanism just for you! And it is implemented and delivered through Magnetic Latvia Startup.

Startup Law
The Law creates a favorable tax regime for startups. The law foresees two benefit scenarios: 1) a special flat tax regime, currently 340,90 euros/month per employee, regardless of salary paid, combined with the 0% individual income tax rate, or 2) 45% co-financing for the highly qualified specialists.

Startup Visa
Startup visa, officially - a temporary residence permit, is offered to all non-EU startup founders who are willing to come and develop their startup ideas in Latvia. One startup can have up to 5 founders with a startup visa. The application process takes one month. The visa is given for the period of maximum 3 years and it is also issued to the spouse and children.

Innovation Vouchers
Innovation voucher program is aimed for any-size businesses that develop new products or technologies. The R&D actions supported by the program are the development of a new product or technology, the strengthening of industrial property rights and the certification and testing of new product or technology. Innovation vouchers are up to 85% co-financed in the amount of 25 000 EUR.

Science Commercialization
The Investment and Development Agency of Latvia provides support to public research organizations for commercialization of research results. Among supported activities are: carrying out a feasibility study, preparation of a commercialization strategy, industrial research, experimental development, participation in international exhibitions, contact exchanges, conferences (seminars) abroad, individual visits and participation in national booths and trade missions, preparation of commercialization offers, attraction of experts and other activities.

Business Incubators
There are 13 LIAA incubators throughout the whole Latvia that support the necessary environment for the set up and development of business by offering training, mentor support and grants, and organizing events on general business issues.

Acceleration Funds
In 2017, the government made a special EUR 15 million acceleration fund (allocated by the European Regional Development Fund during the planning period of EU structural funds 2014-2020) available through ALTUM to support Latvia-based early-stage startups. The fund was then equally divided after a public procurement between three professional funds: Buildit focusing on hardware and the internet of things startups, Commercialization Reactor focusing on deep-tech startups, Overkill Ventures focusing on B2B software startups. There is one more acceleration fund in Latvia - Startup Wise Guys, focusing on B2B Fintech startups.

REAL ESTATE TRENDS

Properties from the top shelf of the Latvian market have already dropped by 20-30 percent and that is because the Russian clients conclude fewer and fewer transactions. Until recently, Latvia was popular with Russians looking for real estate. A quarter of Latvia's 2 million people are ethnic Russians, and 37 percent of Latvia's population is Russian is the primary language of Latvians. In the eastern border region of Latgale, Russians built cheap holiday homes, but the greatest demand for real estate is in the country's capital, Riga and its coastal satellite, Jurmala, the Financial Times reads. Until last summer, the Russians could obtain the right to purchase real estate in exchange for investments in the amount of 150,000 euro, which was the lowest rate to obtain residency in the entire EU. Latvia was considered a "convenient haven" bearing in mind the complexity of the situation in Russia. The city of Jurmala attracted Russian oligarchs, politicians, entrepreneurs and mafiosi, and their big money was invested in luxury real estate. Now the problem has arisen as to whether Russian demand for luxury real estate will slow down or whether bargain purchases will not appear on the market. - Properties from the top shelf of the Latvian market have already dropped by 20-30 percent. - says for "The Financial Times an agent from a Moscow agency, according to which the demand for real estate has dropped by 90 percent. - There are fewer clients from Russia. Although they view real estate, transactions are very rare."

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Statistics

Capital City
Riga
Currency
EUR
GDP Growth
3%
GDP Per Capita
€14,900
Annual Inflation
1.4%
Unemployment
7.8%
Avg net salary
€890
Avg salary growth
6%
Area (km²)
64000
Border states
LT, EE, RU, BY
Residence

By acquiring a property of >250,000 worth

For Sale
Miniature
€566,500
For Sale
Miniature
€155,000
For Sale
Miniature
€223,000
For Sale
Miniature
€240,000
For Sale
Miniature
€170,000
For Sale
Miniature
€357,000
For Sale
Miniature
€273,000
For Sale
Miniature
€100,000
For Sale
Miniature
€600,000

Greece > Halkidiki > Pallini — Villa 150 m²

Greece > Halkidiki > Pallini
For Sale
Miniature
€610,000
For Sale
Miniature
€430,000
For Sale
Miniature
€211,000
For Sale
Miniature
€72,000
For Sale
Miniature
€195,000
For Sale
Miniature
€200,000
For Sale
Miniature
€499,000
For Sale
Miniature
€610,000
For Sale
Miniature
€127,000
For Sale
Miniature
€169,000
For Sale
Miniature
€550,000
For Sale
Miniature
€114,000
For Sale
Miniature
€305,544
For Sale
Miniature
€296,945
For Sale
Miniature
€235,000
For Sale
Miniature
€496,000
For Sale
Miniature
€410,000
For Sale
Miniature
€61,000
For Sale
Miniature
€302,500
For Sale
Miniature
€261,800
For Sale
Miniature
€700,000
For Sale
Miniature
€284,900
For Sale
Miniature
€260,000
For Sale
Miniature
€577,000
For Sale
Miniature
€134,500
For Sale
Miniature
€247,000
For Sale
Miniature
€671,000
For Sale
Miniature
€410,000
For Sale
Miniature
€127,000
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