the economic profile of riga 2015 - liaa proi o riga 2015 3 riga – unique city of opportunities...

1The economic Profile of riga 2015

1

The economic Profile of riga

2015

2 The economic Profile of riga 2015

RIGARiga was founded in 1201. Overlooking several different historical

events, Riga has always been one of the most recognisable places of commerce, culture and tourism in Europe. Starting from the 13th century, when Riga joined the Hanseatic League, in the city evolved commerce, making Riga one of the main intermediates between the West and the East. Until the First World War Riga was one of the main Russian Empire’s port cities, as well as, essential railway trans-port junction. Despite war damages, Riga was able to hold strong and in 1920 the city’s development was resumed as the capital city of the Republic of Latvia.1

At the moment Riga has 30 sister cities in five continents; and it is an essential foothold for the development of different areas. In addi-tion, Riga, as a city and as one of the country’s recognisable objects, regularly participates in different kinds of international projects and activities; for example, in the Union of the Baltic Cities (UBC), in the network of Europe’s largest cities EUROCITIES and others, whose aim is to promote interethnic development for sustainable, competi-tive and territorially united region of the Baltic Sea.

In the first half of 2015 Riga will be the capital city of the Latvian Presidency of the Council of the European Union.

Coordinates: 56°56′51″N 24°6′23″E

status of the City: Since 1201

area: 304 km2

PoPulatioN (1 July 2014): 701 977 (2014. gada 1. jūlijs)

PoPulation density: 2 117 per km2

national CurrenCy: Euro (EuR)

time zone: Gmt+2

muniCiPal Portal of riGa: www.riga.lv; www.investinriga.com

1 Portal letonika.lv section Riga


The economic Profile of riga

2015


RIgA – THE CITy WITH AmBITIOUS TARgETS

Despite the global economic situation and experienced financial difficulties of Latvia, already four years Riga has economic growth and competitiveness development.

In 2014 Riga has won the Smart City title in the contest organized by the magazine The New Economy, which proves that Riga is a city of the future – we think and do things in the long term. Besides, in 2014 Riga has become Europe’s capital city of free wireless Internet.

Credit rating agency moody's Investors Service gave a positive assessment on activities of the Riga municipality in the financial sector and increased the future forecast of the city’s credit rating from stable to positive. In the asses-sment of the agency, such factors as sufficient liquidity of financial resources, financial reserves, and ability to ensure covering liabilities in the coming years are mentioned as the city’s financial sector positive factors.

In FDI magazine annual study “European Cities and Regions of the Future 2014/2015”, Riga is ranked in the first place as “the best European city based on cost effectiveness”.

In 2014 Riga honourably carries a title of the European Capital of Culture revealing to citizens and guests of the city an extensive programme of cultural activities with various world class events.

Riga has always been and will be a venue for significant international events. We are proud that in the first half of year 2015 Riga is the national capital city of the Latvian Presidency of the Council of the European Union, where strategic discussions take place and decisions fundamental for the European Union are made. The Presidency turn increased attention to Latvia and Riga.

I would like to invite you to explore Riga – the city of inspiration!

Nils UšakovsChairman of the Riga City Council


RIgA – UNIqUE CITy OF OPPORTUNITIES FOR EvERyONE

The Riga municipality has brought forward a great challenge for the city – to become the region’s leader in business and in attracting investments, while maintaining high quality standards of life and recreational environment.

To become an interesting cooperation partner for many countries around the world and international companies, Riga has defined economic sectors whose development is receiving increased attention. The municipality is also working on ensuring the necessary informative and consultative support for entrepreneurs, on facilitating cooperation between science and business, and also on developing infrastructure for business start-ups and investment att-raction.

In 2014 the Riga City Council has approved the Sustainable Development Strategy of Riga until 2030 enabling everyone to discover city’s development perspective, and to look and to find new impulses for business promotion to jointly build Riga as the Northern Europe metropolis.

We believe that Riga is a unique city of opportunities for entrepreneurs, as well as for foreign visitors and citizens! Look and you will surely find your op-portunities in this city!

Dzintars BalodisActing director of the City Development Department

of the Riga City Council


TABLE OF CONTENTS1. 1. OUTLINE OF THE URBAN ENvIRONmENT .......................................... 5 1.1. general Information ........................................................................ 5 1.1.1. geographic Location .......................................................... 5 1.1.2. Climate ............................................................................... 6 1.1.3. Natural Landscapes and green Area .................................. 6 1.1.4. Water Bodies ...................................................................... 6 1.2. Population ...................................................................................... 7 1.2.1. Population of Riga .............................................................. 7 1.2.2. Ethnic groups .................................................................... 8 1.2.3. Education ........................................................................... 8 1.2.4. Culture ............................................................................... 9 1.3. Infrastructure ................................................................................. 10 1.3.1. Residential Infrastructure ................................................... 10 1.3.2. Transport Infrastructure ...................................................... 12 1.3.3. Engineering Infrastructure .................................................. 16 1.3.4. Information and Communication Technology Infrastructure .. 182. ECONOmIC COmPETITIvENESS OF RIgA .............................................. 21 2.1. Key Economic Indicators ............................................................... 21 2.2. Economic Activity of Population .................................................... 23 2.3. Sectorial Structure of the Economy and Priority Sectors ................ 24 2.4. Transport and Logistics ................................................................. 27 2.4.1. Freeport of Riga ................................................................. 27 2.4.2. Riga International Airport ................................................... 31 2.4.3. Latvian Railway .................................................................. 33 2.4.4. Road freight transport ........................................................ 35 2.5. Science and technology ................................................................ 36 2.6. Tourism ......................................................................................... 36 2.7. Investing in Riga ............................................................................ 39 2.8. Creative industries in Riga ............................................................. 413. BUSINESS AND INvESTmENT ENvIRONmENT ....................................... 43 3.1. Legal Framework .......................................................................... 43 3.2. Business Start-up ......................................................................... 44 3.3. Real Estate .................................................................................... 45 3.4. Business Support Provided by the municipality ............................. 47 3.5. Business Support Institutions ........................................................ 49 3.6. Opportunities for mutual Business Cooperation ............................ 52 3.7. International cooperation opportunities .......................................... 55Useful information ......................................................................................... 58


Latvija

1.

1.1. gENERAL INFORmATION

1.1.1. geographic Location

Riga is the capital city of the Republic of Latvia; and it is located in the central part of Latvia on the south coast of the gulf of Riga, on both riversides of Daugava. The city is the geographic centre of the Baltic region countries.

The planned usage of territory of Riga2

Residential area 91,03 km2 (29,9 %)

Industrial area 6,9 km2 (2,3 %)

Technical construction territories

8,65 km2 (2,9 %)

Roads (streets) 45,19 km2 (14,9 %)

Green area 85,09 km2 (28,0 %)

Water bodies 47,67 km2 (15,7 %)

Port territory 16,66 km2 (5,5 %)

Airfield territory 2,86 km2 (0,9 %)

2 The Spatial Plan of Riga for 2006 – 2018 with amendments. Explanatory memorandum.

LATgALE suburb 46 km²

3 km²CENTRS district

ZIEmEļU district 77 km²

vIDZEmE suburb 58 km²

KURZEmE district 79 km²

ZEmgALE suburb 41 km²

The total area of the city is 304 km2; and it is divided into six regions that, in turn, are sub-divided into 58 neighbourhoods.

As Riga is located in lowland of the central part of Latvia, there are only a few hills in the city; the highest is Dzeguzkalns (26 m above sea level).

OUTLINE OF THE URBAN ENvIRONmENT


1.1.2. ClimateThe climate of Riga is mainly determined by the moderate latitude air mass-

es born by the Atlantic Ocean connected with the active cyclonic action; therefore, it is often cloudy and with precipitations in the city. Approximately 220 days a year air masses born by the sea dominate in Riga. The climate is influenced not only by the closeness of the gulf of Riga, but also by closeness of other large water bodies (Daugava, Kisezers), as well as by construction territories, disposition of residential objects, area of squares and parks.

The maximum of the sun angle is on July 22nd (56.4° above horizon), and the minimum on December 22nd (9.6° above horizon). As in the city through-out the year the cloudiness is increased, the length of sunlight in summer is 54-57 % and in winter – only 14-25 % of the maximum possible length. Due to the predominant sea air masses, the level of precipitations in the city is high – approximately 700 mm a year. 72 % of the total annual precipitations are rain, 16 % – snow, and the rest – mixed type precipitations.

In the last four years the average air temperature in Riga has been 7.7° C (the norm – 6.9° C).3 However, due to air pollution the average temperature usually is higher than the actual.4

1.1.3. Natural Landscapes and green AreaThe environmental accessibility in Riga is characterised by 39 % natural

landscapes, 16 % of them are water bodies and 23 % are green areas; there-fore, Riga, adequately, can be called a green city.5 The total green area of the city is 85.09 km2, with 29 parks, 24 graveyards, 10 larger forest areas and forest parks, and 66 squares. mentioned in historical annals already in early 16th century, the oldest park Strazdmuiza is in Jugla. Relatively many parks and squares are located in the city centre (including major venues for cultural events – Esplanade, Kronvalda park, vermanes garden, AB Dambis, Baste-jkalns) – they are popular not only among locals, but also among visitors.

Almost in every Riga’s district there is at least one green area – that provides relatively good air quality and considerably improves the quality of urban life. In addition, in every living area there are wide yards for short time relaxation and nearby forest parks and forests for longer time spending.

1.1.4. Water BodiesThe geographical location of the city on coastal lowland of the region of

Daugava creek determines its richness with water bodies – Latvia’s largest river Daugava runs through the city, as well as many smaller rivers. In addition, Riga has nine lakes and ponds. In total, the city’s “blue” area is 17.6 % or 5 400 hectares naturally helping to create landscapes and providing citizens of Riga with additional areas for relaxation.

3 The Central Statistics Bureau. Climate in Latvia. Available at: www.csb.gov.lv4 The Environment Report on Strategic Assessment of Impact on Environment for Riga Development Plan 2006 - 20185 The Assessment of Strategic Impact on Environment. Environment Report. LLC grupa 93. 2014


The largest lake in Riga is Kisezers – it is located in the northeast part of the city and its area is 17.3 km2. The second largest lake is the lake of Jugla (5.7 km2). Water surrounds also the old city – part of Daugava and 3.2 km long city canal runs around it. The majority of water bodies are located on the right coast of Daugava; whereas the largest water body on the left shore, Pardaugava, is between Tornakalns and Agenskalns – artificially created mara pond.

1.2. POPULATION

1.2.1. Population of RigaAccording to data on population, Riga is the largest city in the Baltic States

and the third largest (behind Saint Petersburg and Stockholm) in the region of the Baltic Sea. On July 1st 2014, population in Riga was 701 977 (313 143 men and 388 834 women), that is 32 % of total population of Latvia. In the last three years the number of new-borns in Riga has also increased.7

6 The Office of Citizenship and migration Affairs. Number of population of Latvia in municipalities. Available at: http://www.pmlp.gov.lv7 The Central Statistical Bureau. Live births by gender. Available at: www.csb.gov.lv8 The Central Statistical Bureau. Age structure of men and women. Available at: www.csb.gov.lv9 The Office of Citizenship and migration Affairs. Working age and gender structure in municipalities. Available at: http://www.pmlp.gov.lv

The same as in the largest cities of Europe, the level of demographic burden in Riga is higher in the group above working-age. The data from July 1st 2014 indicates that 98 215 people till the working-age, 450 309 people in the work-ing-age, and 153 453 people above the working-age live in Riga.9

When comparing the administrative-territorial units by population, it can be concluded that the majority of population lives in Latgale suburb (187 710 people) and vidzeme suburb (175 925 people), and the minority in Centrs district (24 027 people).

Number of new-borns in Riga The population of Riga Region by age groups to January 1st 20148

11,76 %

8,76 %

15,74 %

16,52 %

13,92 %

13,96 %

9,74 %

9,60 %

8,80 %

6,56 %

13,16 %

13,62 %

12,62 %

14,63 %

12,47 %

18,14 %

0–9

10–19

20–29

30–39

40–49

50–59

60–69

70<

Age group (years)

2009 2010 2011 2012 2013

7 3086 789

6 2966 739

7 040

3 732 3 496 3 271 3 482 3 537

3 576 3 293 3 025 3 257 3 503

girls

boysMen Women


1.2.2. Ethnic groupsRiga is a multinational city. In the past years the ethnic composition of the

population has not changed noticeably. Comparatively the largest proportion is Latvians (43 %) and Russians (39 %), still the proportion of other nationalities is also considerable – 18 % – Belarusians, Ukrainians, Poles and others.10

1.2.3. EducationThe level of citizens’ education is one of the most important preconditions for

the city’s development; therefore, also in Riga the increase of education level is facilitated ensuring general education and other kinds of additional – including higher, interest-related and vocational-oriented – education. In order to achieve long-term goals, the Riga City Development Programme 2014 - 2020 has deter-mined qualitative and modern education as one of the main priority directions.11

There are 157 pre-school institutions in Riga, 74 of them with Latvian teach-ing language, 51 – with Russian language, and 32 with both Latvian and Rus-sian teaching language. Since school year 2008/2009 the number of students has overall increased by more than 2 600 children; and up to this day more than 26 700 young inhabitants of the city learn in pre-school institutions.

The city owns 119 general education institutions, 5 of them are prima-ry schools, 23 – elementary schools and 91 – secondary schools. From all the schools 12 are special schools, 10 – boarding schools and 5 – evening schools. Approximately 65 000 students study in these schools. There are also several interest-related and vocational-oriented educational institutions:

● Sports-oriented educational institutions (all together – 11); 7 000 students study there (the most popular sport is basketball; 27 % of students practice it);

● Nine cultural education institutions; on average 4 000 students study there each year;

● 13 interest-related education institutions.

10 The Office of Citizenship and migration Affairs. Number of population in municipalities by nationalities. Available at: http://www.pmlp.gov.lv

11 The Riga City Development Programme 2014 - 2020

Proportion of different nationality groups, %

Latvians Russians Belarusians Ukrainians Poles Other nationalities43 % 39 % 4 % 4 % 2 % 8 %

LVRU

.....BY UAPL


Riga is the capital city of higher education in Latvia – here 46 universities and colleges, where it is possible to study different kinds and fields of higher and vo-cational education, educate more than 77 000 students (more than 80 % of all the higher education students in Latvia).12 One of the priority directions defined in the planning documents of the ministry of Education and Science is the inter-nationalisation of higher education and science and the increase of its interna-tional competitiveness, including the promotion of exportability; thus increasing the competitiveness and quality of higher education – holding a certain place in the global education market and contribution in the national economy. During the past four years the number of foreign students in Latvia has increased two-and-a-half times, reaching almost 5 % and contributing 20 million euro each year to the national economy. The ministry of Education and Science aims to increase the number of foreign students studying in Latvia to at least 10 % by 2020.13 Universities in Riga having the highest number of foreign students are the Uni-versity of Latvia, the Riga Technical University and the Riga Stradina University.14

1.2.4. CultureRiga, as the capital city of the Republic of Latvia, has always maintained the

city’s and the whole country’s tangible and intangible cultural heritage. There are many architectural monuments of national importance in Riga; and Riga is also a venue for cultural events of regional, national and international significance. In 2014 Riga was the European Capital of Culture, giving a chance for the city to promote its cultural life and developments within the European Union.

Once every five years the National Song and Dance Celebration Festival takes place in Riga, every three years – the international festival of folklore Bal-tica. Every year Riga is the home for events like the Riga City Celebration, the Lacplesis Day, the Light Festival Staro Riga, the Latvian Independence Day, the music and Arts Festival Bildes, the National music Festival Rigas ritmi, the Baltic Ballet Festival, the Festival of Theatre Zelta Maska in Latvia and others.15 Since 2013 Riga is awarded as the Elegantly Delicious Capital City, highlighting the Latvian culinary heritage and richness.

According to the State Inspection for Heritage Protection data, there are 1 711 cultural monuments in Riga, 786 of them are of national importance and 925 are of local importance.16

The historic centre of Riga with an area of 438.3 hectares (1.43 % of the total area) was included in the UNESCO World Heritage List.17 In the centre of Riga 40 % of all the buildings are Art Nouveau buildings; and it is much more than in any other European city.18

12 The overview of the educational institutions in 2012/2013 school year. The Education, Culture and Sports Department of the Riga City Council. Available at: www.iksd.riga.lv

13 The ministry of Foreign Affairs of the Republic of Latvia: www.mfa.gov.lv14 The overview of the Latvian higher education in 2013. Available at: www.izm.gov.lv15 The Education, Culture and Sports Department of the Riga City Council: www.iksd.riga.lv16 The State Inspection for Heritage Protection: www.mantojums.lv17 The Riga Historical Centre Preservation and Protection Act.18 The Tourism Development Agency: www.tava.gov.lv


There are three independent culture centres, the Association of Culture Institu-tions of the Riga City Council, the Central Library of Riga, the professional brass band Riga, several sport and music educational establishments, etc in Riga. Be-sides, Riga hosts also national culture institutions as: JSC Rigas Kinostudija (Riga Film Studio), the state-owned LLC Latvijas Nacionala Opera (Latvian National Opera), the state-owned LLC Rigas Cirks (Riga Circus), six theatres, and others.

In 2014 the new building of National Library of Latvia, also called “Gaismas pils” (Castle of Light) was put into operation. Its total area is 40 455 m2 and it has enough space for 1 000 readers. In the library it will be possible not only to store 6 million printed matters and to freely access 350 000 editions, but also to use 10 different rooms for group activities, individual work cabins, the music Room, the Room of Tales, language classes, the Latvian Book-printing History museum, as well as a conference and concert hall with 462 seats and seminar rooms with the total capacity of 400 seats.19 The National Library of Latvia is one of the most outstanding projects in Latvia in the 21st century, creating the opportunity of becoming a modern and creative world-level cultural, educa-tional and scientific centre.20 Culture-related artistic groups in Riga 201421

1.3. INFRASTRUCTURE

1.3.1. Residential InfrastructureThe available residential infrastructure in Riga consists of multi-apartment

residential buildings, where live approximately 600 000 inhabitants, and pri-vate houses, where live approximately 33 000 inhabitants. The city’s residential fund consists of state-owned, municipally and privately owned houses built in different time periods. The majority of buildings were built during the Soviet times where now live 72 % of Riga’s inhabitants. many buildings were also built

39vocal groups

18 Folklore groups

4 Photo and

cinema studios7Lute-players

groups

88Choirs 17

Orchestras, instrumental groups and

chapels

31Applied arts

studios

18Amateur theatres

8Fine arts studios

52Dance groups

19 Latvijas Nacionālā bibliotēka jaunajā ēkā. Pieejams: www.lnb.lv20 Latvijas Nacionālā bibliotēka: www.gaismaspils.lv21 Rīgas domes Izglītības, kultūras un sporta departaments. Kolektīvu datu bāze. Pieejams: www.kultura.riga.lv


before the First World War and during the First Independence of Latvia, but the third construction boom started in 2006 that slowed down with the beginning of economical crisis.

According to the study on housing affordability index done by the SEB Bank, in the first quarter of 2014 this index has increased.22 Whereas, accord-ing to the real estate market report provided by the real estate agents com-pany “Latio”, the number of all types of transactions related to real estate in Riga in the first seven months of 2014, in comparison to the same time period in previous year, has increased by 3.8 %. The number of real estate purchase transactions in Riga increased by 4.7 %, including purchase of flats (increase by 3.8 %) and mansions (increase by 11.7 %). During this period there have been 5 800 real estate purchase transactions in Riga, approximately 90 % of them were flat purchases. Within the total real estate purchase transactions, number of mansion purchases is increasing.23

According to The Central Statistical Bureau, the demand for residential in-frastructure continues to recover, as evidenced by both the construction of new residential buildings and the number of buildings given for exploitation and also the number of issued construction permits.

At the end of 2012 the residential stock available in Riga for one resident was 28 m2; that is by 1 m2 more than in 2010.26

2010 2011 2012 2013

22 The Housing Affordability Index. SEB Bank. June 2014. Available at: www.seb.lv23 Real Estate market Report. Riga. Latio. August 2014. Available at: www.latio.lv24 The Central Statistical Bureau. Construction of new residential buildings. Available at: www.csb.gov.lv25 The Central Statistical Bureau. Number of building permits issued for building construction. Available at: www.csb.gov.lv26 The Riga City Council City Development Department. Strategies for monitoring System: Residential stock average per capita in

Riga (m²). Available at: www.sus.lv

Number of construction permits issued in Riga25 The number of newly built residential buildings in Riga (thousands, m2 total area)24

One flat buildings (without mansions, summer houses)

mansions, summer houses

Two and more flat buildings

Shared houses by different social groups

2010 2011 2012 2013

2010 2011 2012 2013

2010 2011 2012 2013

2010 2011 2012 2013

59,1

132,1

72,978,9

27,921,4

16,1 10,8

New con-structions, in total

incl. one flat buildings

199 206193

161

10487

11090

5063 58

141

12 15 16 24

1

2

1

4

Total

New construc-tions


1.3.2. Transport InfrastructureAdvantageous geographical location of the city has contributed to its de-

velopment – the city has the advantage to use all types of transport systems. Riga is the key domestic and international passenger and freight transporta-tion junction – there are roads, the railway, the port and the aviation in the city. With the development of all kinds of transportation systems it is possible to support other sectors – trade, logistics, energy, tourism, as well as enhance the cross-boarder relationships. Riga has always been the crossroads be-tween the West and the East.

In order to reach long-term goals, the Riga City Development Programme 2014 - 2020 has stated the balanced traffic infrastructure and organisation as one of the main priority directions.27

Road Transport:Riga and the Riga region is the key international and domestic passenger

and cargo transportation junction in Latvia. Road network in the Riga region is relatively dense and it ensures radial link of Riga with rest of the territory of Latvia.

In Latvia all the major roads and transport corridors cross the capital city:● In the North – South direction, it is ensured by the first transport corridor

in Europe “via Baltica” and it connects European cities: Helsinki – Tallinn – Riga – Kaunas – Warsaw and Riga – Kaliningrad – gdansk;

● In the West – East direction, it is ensured by the European route E22 that begins in the UK and extends till the central part of Russia.

According to data of the Central Statistical Bureau the total length of streets in Riga in 2013 was 1 179 km; that is 125 km less than it was in 2000.28 The bus-iest traffic in the city is the entrances in Riga from Jurmala and Sigulda sides.29

In order to clear the city centre from major transportation transits and traffic jams, the Southern Bridge was opened in 2008. On its both shores, trunk roads with transport junctions are built ensuring the operation of the bridge. In 2011 Slavu transport junction became publically accessible. In case of Latvia, it is un-precedentedly very large size and technically complicated with trestle of three stories. The same year Austrumu transport junction also was opened. In 2013 the transport junction on the left shore in direction of Zemgale suburb was fin-ished, thus concluding all the trunk roads required for complete exploitation of the Southern Bridge. As a result, all the transportation transits can completely and freely bypass the city centre; moreover, the system of the new trunk roads creates an exit to transport corridor of state significance road “Via Baltica”.30

Riga also provides an efficient and comfortable public transportation sys-tem for citizens and visitors of the city. The company responsible is the mu-27 The Riga City Development program 2014 - 202028 The Central Statistical Bureau. municipal streets length. Available at: www.csb.gov.lv29 The Latvian State Roads. The average daily traffic in 2013 on the country's major roads near Riga. Available at: www.lvceli.lv30 The Riga City Sustainable Energy Action Plan for Smart Cities 2014 - 2020


nicipally-owned LLC Rigas Satiksme (Riga Traffic) providing the city with trams (218 trams in 9 different routes), trolley-buses (264 trolley-buses in 19 different routes) and buses (432 buses in 51 day routes and 9 night routes), as well as parking lots (4 796).31

In the next five years, LLC Rigas Satiksme will provide 175 new low-floor buses of Solaris. 60 of them will be 12 meter long, 115 – 18 meter long. It is expected that the low-floor buses will gradually replace the old vehicles with ex-pired exploitation time for serving passengers of public transportation in Riga.32

LLC Rigas Satiksme ensures transportation of passengers not only in the administrative territory of Riga, but also in close regions and districts – regions of Babite, marupe, garkalne, Kekava and district of Olaine.

In addition, several companies operate in the city providing services of mini-buses (2 026 minibuses).33

In 2013 LLC Rigas Satiksme transported more than 150.1 million passen-gers. In comparison to 2012, the number of passengers has increased by 6.2 % that can be explained by increase of the economic activity, maintenance of the basic transportation tariff, gradual decrease of unemployment and simple ways how to pay for public transportation services.34

In Riga, as in the capital city of Latvia, a notable importance is given to ensure agglomeration with the rest territory of Latvia, as well as for transporta-tion of international passengers; it is provided by JSC Riga International Coach Terminal, cooperating with 28 passenger transportation companies in total. 12 companies ensure domestic transportations (three of those ensure both do-mestic and international transportations), and 19 – international transportations (nine of those are foreign companies). The JSC Riga International Coach Termi-nal cooperates also with three tourism agencies that provide tickets for interna-tional routes. On average in 2013 Riga International Coach Terminal served 400 routes daily, of those 340 are domestic and 60 are international routes.35

3 LLC Rigas Satiksme. management Review of the integrated management system performance. 2013 annual report and future challenges. Available at: www.rigassatiksme.lv

32 LLC Rigas Satiksme. Available at: www.rigassatiksme.lv33 Taxi operators in the administrative territory of Riga. Situation on 4 August 2014. Available at: www.rdsd.lv34 LLC Rigas Satiksme. management Review of the integrated management system performance. 2013 annual report and future

challenges. Available at: www.rigassatiksme.lv 35 JSC Riga International Coach Terminal. 2013 annual report. Available at: www.autoosta.lv

Trams 218

Trolley-buses 264

Buses 432

minibuses 2 026

Public transportation units of Rigas Satiksme


Railway TransportRailway transport is one of the most advantageous types of land transpor-

tation from security, as well as from ecological aspect. From all the domestic land transportation extent, railway cargo transportation is approximately 52 % and passenger transportation in the Riga region – 30 %. According to the railway cargo transportation structure, 85 % are transit operations, generally from Russia and Belorussia to Latvian ports (the Eastern – Western transport corridor); inland transportation is about 5 %; that can be explained due to relatively short transportation distances. Almost all railway routes in Latvia go through Riga.

Railway of Latvia is included in one of the five transnational transport corri-dors set by the European Union – the Northern Transport Corridor connecting EU northern part with Norway and eastern part with Belorussia and Russia.

The existing railway network in the Baltic States is built according to Rus-sian standards. As in Western Europe railway tracks differ in width, railway of Latvia cannot be connected with railway network of Poland and germany directly, therefore on Lithuanian boarder width of wagon wheels is now being changed. However, the implementation of the project Rail Baltica continues aiming to re-establish direct link between the railway network of the Baltic States and the European railway network; and to promote regional integration by connecting metropolis of Tallinn – Riga – Kaunas – Warsaw – Berlin.

Following companies operate in the Latvian railway sector:● JSC Latvian Railway, manages the public railway infrastructure;● JSC Pasazieru Vilciens (Passengers Train);● several organisations and sector companies.

Cargo transportation in Latvia is ensured by JSC Latvian Railway daugh-ter-company LLC LDZ Cargo and by two private capital companies – JSC Balti-jas Ekspresis and JSC Baltijas Tranzita Serviss. Private companies transport on average 20 % of the total amount; it is one of the highest ratios in Europe.

JSC Pasazieru Vilciens is the domestic public railway transportation provid-er and LLC LDZ Cargo, cooperating with LLC L-Ekspresis, ensures interna-tional passenger transportation to Russia and Belorussia.

Water Transport

Water transport in Riga is ensured by the Freeport of Riga that plays an important role in the global and regional cargo transport chain, as well as in the passenger transportation network in the region of the Baltic Sea. The Free-port of Riga is a middle point of major transit roads and the eastern – western


transport corridor, as it is included in such corridors:● Trans-Siberian highway;● North – South road through minsk;● Daugava – Dnieper waterway project.moreover, the European Union has stated that Riga is a part of Trans Europe-

an corridor I (TEK I) connecting Helsinki with Tallinn, Riga, Kaunas and Warsaw.

Key facts and numbers of the Freeport of Riga:● The Freeport of Riga is located 15 km along both banks of the river Daugava;● Total area: 6 348 ha;● The Freeport of Riga is open for sailing throughout the whole year;● Status of free economic zone;● Total length of piers: 18.2 km;● maximum depth at piers: 14.5 m;● Warehouse area: 370 979 m2;● Cargo storage area capacity: 1 926 362 m2;● Cargo handling capacity: 58.2 million tons/year;● Freezer facility capacity: 25 500 t;● Oil reservoir capacity: 665 063 m3;● The largest port in the Baltic States in 2013 by cargo turnover: 35.5 million

tons;● Ship visits in 2013: 3 850● Up to 77 % of cargo turnover in the Freeport of Riga consist of transit cargos

sent to or received from the Commonwealth of Independent States (CIS);● 34 stevedoring companies and 27 shipping agents operate successfully in

the Freeport of Riga;● The main cargos are containers, different metals, wood, carbon, fertilizers,

chemical cargos and petroleum products.36

gaisa transportsLarge amount of passenger transportation between Latvia and other world

countries ensures economical growth not only for the city, but also for the entire country. Air transport has a noticeable influence on the national economy in gen-eral and on the increase of its gross domestic product, creating preconditions and promoting development of other sectors, especially tourism, as well as con-tributing to increase of the level of employment. In Latvia air transport is provided by JSC Riga International Airport, JSC Latvian Air Traffic and air operators, the most influential of them is the national operator JSC Air Baltic Corporation.

During the last seven years the number of JSC Riga International Airport pas-sengers has increased almost four times and it has become a confident leader among airports of the Baltic States, as well as one of the fastest-developing airports in the European Union. 36 The Authority of Freeport of Riga. Available at: www.rop.lv37 The ministry of Transport of the Republic of Latvia. Aviation Specific characteristics.

Available at: www.sam.gov.lv


In 2013 JSC Riga International Airport served 4 793 045 passengers. The amount of transfer and transit passengers was 32 % of total number of passen-gers, whereas cargo transportation reached the highest amount in the airport’s history – 53 539 tons. In comparison to the previous year, cargo transportation increased by 38.44 %. The biggest cargo operators are US company Kalitta Air, in 2013 providing 50 4 % of all cargo transportation, Latvian company Air Baltic Corporation, providing 16.24 %, and the National Air Cargo, providing 13.24 % of all cargo transportation.38

Pipeline Transport Currently in Latvia there is a trunk of gas pipeline network, which connects

the system of gas pipelines of Latvia with the gas pipelines in Russia, Estonia and Lithuania. In 2013 in those pipelines were transported 4.4 billion m3 of natural gas.39 There are two gas pipelines that cross the city and ensure it with natural gas:

● Since 1962 Dashava (Ukraine) – Riga;● Since 1972 Torzhok (Russia) – Riga.

1.3.3. Engineering Infrastructuremodern urban life is unthinkable without such obvious things as water, heat,

electricity, light and sewerage. Connections to centralized supply systems and the quality thereof are necessary for comfortable life.

Water and Sewerage SystemWater supply and sewerage system in the city is provided by LLC Rigas Udens

(Riga Water); the company offers drinking water of good quality and collects, drains and cleans domestic wastewaters. Drinking water in Riga is accessed from six important city’s water sources, using both surface and ground water sources. The majority of inhabitants living on the left bank of Daugava receive water from Daugava river basin in the water supply zone of the Riga Hydroelec-tric Power Plant (Riga HES), whereas inhabitants of the right bank of Daugava – from the ground water source Baltezers-Zakumuiza. Water treatment station Daugava can produce up to 210 thousand m3 in a day and Baltezers-Zaku-muiza – up to 85 thousand m3 of drinking water. quality of the produced drinking water and safety of water treatment stations meet the European standards.40

In the beginning of 2013 the total length of water supply networks in Riga reached 1 399 km, including network inlets of 332 km in length. In order to pro-vide secure and qualitative water supply, LLC Rigas Udens every year changes or reconstructs pipelines, hydrants and bolts in the whole territory of Riga.

The total length of sewerage system network in Riga at the beginning of 2013 reached 1 103 km, including public sewer outlets of 152.87 km in length.

38 JSC Riga International Airport. Annual yearbook. Available at: www.riga-airport.com39 The Central Statistical Bureau. Transport by pipeline. Available at: www.csb.gov.lv40 LLC Rigas Udens. Available at: www.rigasudens.lv


LLC Rigas Udens every year increases the power of sewerage system network and its pumps; thus, ensuring safe collection of wastewater and drainage to the biological wastewater treatment plant Daugavgriva.41

Heat Supply ServicesThe JSC Rigas Siltums (Riga Heat) is the main supplier of heating in Riga. It

ensures production, distribution and sales of heat, as well as provides main-tenance services of the internal heat supply systems in the buildings.

The main heat producers in Riga are the cogeneration stations owned by JSC Latvenergo. JSC Rigas Siltums purchases from these stations approxi-mately 70 % of all the necessary heat. About 0.05 % of heat is bought from other companies and the rest is produced in JSC Rigas Siltums heat sources: five heating stations, as well as several tens of small and medium size boil-er-houses. mainly gas (97 %) is used as fuel; it is also possible to use heating oil, marked fuel and woodchips.

76 % of all heat necessary for Riga is transmitted and distributed by JSC Rigas Siltums. 77 % of all the produced and supplied heat is used for house-hold heating and boiling hot water.42 The total length of the city’s heating circuit is about 900 km.

Power SupplyThe same as with heat supply, power supply is also ensured by the leading

energy company in Latvia JSC Latvenergo. The company produces 90 % of all the electro energy produced in Latvia; the majority is produced from water as energy resource.43

gas SupplyThe supply of natural gas in the Latvian market is ensured by JSC Latvijas

Gaze (Latvian gas) that, in accordance with licenses published by Public Utili-ties Commission, manages, distributes, maintains and sells natural gas. From the gas used in Latvia, approximately 65 % is consumed in the Riga region.

Lightning Network SystemAlready since 1947 the lighting network system of Riga is operated and

managed by the Riga municipally owned agency Rigas Gaisma (Riga Light). Its main task is to maintain, to repair and to improve the operational efficiency of the external lighting networks of urban roads (streets), parks and other public objects owned by the municipality.

In 2013 the agency provided external light on streets for 3 903 hours a year, managed the operation of 351 traffic lights and ensured several other not less important duties.44

41 LLC Rigas Udens. Available at: www.rigasudens.lv42 JSC Rigas Siltums. Available at: www.rs.lv43 JSC Latvenergo. Available at: www.latvenergo.lv44 The Riga municipal Agency Riga Light 2013 Public Report. Available at: www.rigasgaisma.lv


11.3.4. Information and Communication Technology InfrastructureInformation and communication technology is one of the key elements for

the growth of economic competitiveness and national economy. The fast de-velopment of technologies in the whole world proves that long-term growth cannot happen without the development and extensive use of information and communication technologies. Nowadays, almost in every household and company there is a necessity for information and communication technology infrastructure – it improves the quality of life, provides easy access to differ-ent kinds of public services, promotes development of entrepreneurship and effective work of the municipality, enhances the process of studying and inter-communication of inhabitants.

Information and communication technology is one of the leading economic sectors in Latvia that stimulates the development of all national economy. In the recent years, the information and communication technology sector has developed, and its export extent has increased, as well. more and more new companies have been established, mostly in computer programming and con-sultation field. In 2013 the amount of taxes paid in this sector has increased, the service field developed rapidly, the export level reached 30 % and it had a notable growth.46

The Riga municipality is a friendly and suitable city for information and communication technology sector, actively participating, supporting, using and promoting different activities and services provided by this sector. For example, in the public transports of Riga people use electronic travel cards; and exhibits of the museums of Riga can be explored on mobile applications. Since 2014 anyone who is interested can explore collections of museums from a distance and search for specific expositions and items located in the stocks by entering the catalogue of museum collections of the National muse-um of Latvia. Whereas, speaking about the education sector, a portal E-klase (E-class) has gained popularity among education institutions, students and parents. To ensure convenient communication between inhabitants and local authorities and departments, the Riga municipality is using IT tools more and more, at the same time reducing its expenses and administrative burden.

The most important cooperation partners in the development of information and communication technology are the Latvian Information and Communica-tions Technology Association, the Latvian IT Cluster, the foundation TechHub Riga (that helps new entrepreneurs of the sector to reach the global market), as well as the Riga Technical University and the University of Latvia.

In 2014 Riga became the capital city of free wireless Internet in Europe (tak-ing into account the number of free Wi-Fi points to one km2 and the number of citizens). On average, in Riga one Lattelecom free Wi-Fi connection point is available for 750 people and three Wi-Fi points on one square kilometre. After 45 Latvian Information and Communications Technology Association: www.notepad.lv46 The Latvian Information and Communications Technology Association: www.likta.lv


Profit before taxes of enterprises in the information and communication technology sector (million, euro)50

47 Information of Lattelecom. Available at: www.lattelecom.lv48 The Central Statistical Bureau. Number of enterprises in the ICT sector. Available at: www.csb.gov.lv49 The Central Statistical Bureau. Number of enterprises in the ICT sector. Available at: csb.gov.lv50 The Central Statistical Bureau. Profit before taxes of enterprises in the ICT sector. Available at: csb.gov.lv

Number of enterprises in the information and communication technology sector48

Employees in the information and communication technology sector49

2009 2010 2011 2012

54 64 72 96

472 471 434 506

2 255 2 616

2 867

3 788

2009 2010 2011 2012

860 838 849 1 045

2 578 2 251 1 994 2 284

13 922 14 22715 494

18 120

2 781 3 151 3 373 4 390 17 360 17 316 18 337 21 449

ICT production

ICT wholesale

ICT services

The TOTAL in the ICT sector

2009 2010 2011 2012

13,9 22,6 27,2 29,2

0,1 5,3 2,7 35

153,2 150,4 122,4 140,6

167,3178,3

152,2

204,3

ICT production

ICT wholesale

ICT services

The TOTAL in the sector

Riga, the next most developed cities in terms of free Wi-Fi are Tallinn, Stock-holm, vienna, Paris and Helsinki.47

According to the data of the Central Statistics Bureau, in four years time (2009 – 2012) the number of employees and amount of personnel expenses, as well as turnover and indicators of added value of enterprises in the information and communication technology sector have considerably increased. In 2012 the turnover of information and communication technology enterprises reached almost 2 850 million euro a year and the added value exceeded 700 million euro.


Turnover, personnel expenses and added value (million, euro)51

Indicators Working sector 2009 2010 2011 2012

Turnover of enterprises in the field

The TOTAL in the ICT sector 1 820 2 067 2 275 2 897

ICT production 74 87 102 122

ICT wholesale 659 885 1 010 1 429

ICT services 1 087 1 096 1 162 1 346

Personnel expenses of enterprises in the

field

The TOTAL in the ICT sector 205 181 248 314


ICT wholesale 23 20 24 28

ICT services 175 155 212 273

Added value of enterprises in the field

The TOTAL in the ICT sector 586 572 602 686


ICT wholesale 58 57 58 71

ICT services 497 491 499 569

In the Riga region, the number of Internet users in households is almost 5 % higher than it is in Latvia on average – at the beginning of 2013 it reached 76 %. Computer accessibility in the Riga region was 75.8 %, what is by 4 % higher than in the whole country.52

51 The Central Statistical Bureau. Turnover, personnel expenses and added value of enterprises in the ICT sector. Available at: csb.gov.lv52 The Central Statistical Bureau. Computer/ Internet accessibility in different types of households. Available at: www.csb.gov.lv

Accessibility of Internet in households at the beginning of the year (%)

Computer accessibility in households at the beginning of the year (%)

Altogether in households of Latvia In Riga region

2010 2011 2012 2013

59,8 63,6

68,7 71,665

68,375,8 76

2010 2011 2012 2013

62,8 64,369,566,6 69,1

76,6 75,871,7


2. ECONOmIC COmPETITIvENESS OF RIgAThe main national and planning and development documents determining the economic competitiveness and development of the city are:

● The National Development Plan of Latvia 2014 – 2020;● The Sustainable Development Strategy of Latvia 2030;● The Sustainable Development Strategy of Riga 2030;● The Riga Development Programme 2014 – 2020;● The Riga Spatial Plan 2006 – 2018.

2.1. KEy ECONOmIC INDICATORS

In order to reach sustainable goals, in the Riga Development Programme 2014 – 2020 favourable business environment and high economical activity are stated as the priority directions.

The economical recovery and growth in Riga is obvious during the last four years when economic indicators have considerably improved after the financial crisis. However, they are still not as high as in 2007; and it is an additional mo-tivation for more rapid development of the economic competitiveness the city.

In 2013 in terms of gDP per capita, Riga is on the average level of the Eu-ropean Union. Besides, growth of gDP in Latvia can be noticed every year – in 2013 comparing to previous year it increased by 4.1 %. But gDP per capita in the capital city excel the average level of the national indicator – for 58 %. In 2013 the trade sector has the largest share in Riga economy sectors structure by added value – 19.3 %. The second largest economy sector of the city is transport with 11.9 % share; the third – professional, scientific and technical services, administrative and customer service sector with 9.8 %; and with only a little lower share industry sector – 9.7 %.

After considerable fall in the period from 2008 to 2010, when total invest-ments in the economy of Riga decreased 2.4 times, in recent years constant growth of investments can be noticed. In the period from 2010 till 2012 the amount of investments in the capital city increased by 43 %; however, it is still 40 % lower than the pre-crisis indicator.

In 2013 the amount of investments in Riga made approximately 46 % of total investments in the country; that is a considerably lower than the pre-crisis indicator – 54 %. But the share of construction works done in the capital city


of the total in the country in 2013 was 38 %; in comparison to 2008, when it reached 47 %.1

Non-financial investments in the statistical regions (in comparable prices of 2012; million euro)2

According to data of the Central Statistics Bureau, in the Riga region there are active more than 40 % of all the companies of Latvia. The majority enter-prises in Riga are microenterprises – in 2012, 88 % of the total market sector. There are 266 large enterprises located in the Riga region; that makes 70 % of all economically active companies in the country.

Economically active entities*, in breakdown by size groups3

1 The Riga City Council Public Report 20132 Central Statistical Bureau. Non-financial investments. Available at: www.csb.gov.lv3 The Central Statistical Bureau. Economically active statistical units. Available at: www.csb.gov.lv

Non-financial investmentincl. construc-tion work

Non-financial investment

incl. construc-tion work

Riga Region

Latvia5 898,2

2 750,3

6 452,4

3 179,7

6 882,3

3 280

6 671

3 627,6

4 374,6

2 414,6

3 316,3

1 536,7

4 256,8

1 767,8

4 770,9

2 192,4

2005

2006

2007

2008

2009

2010

2011

2012

2 082,4

702,3

2 501,6

1 029,9

2 996

1 328,7

2 440,5

1 155,9

1 720

783,3

1 119.8

409,2

1 439,8

476,7

1 669,9

641,9

* Entities of market sector: self-employed persons, individual merchants, commercial companies, farmers and fishermen. Entities of out-of-market sector: funds, foundations and associations, state budget institutions, municipal budget institutions.

2009

2010

2011

2012

137 626

54 308

145 303

55 978

151 911

59 255

162 517

64 859

Riga Region

Latvia

Riga Region

Latvia

Riga Region

Latvia

Riga Region

Latvia

micro

small

Out-of-market sector

market sector

medium

large


In 2013 the Riga municipality continued its long-term cooperation with the credit rating agencies Standard& Poor’s and Moody’s Investors Service. Moody’s Investors Service assessed positively work of the Riga municipality in the financial field, its constant capability to ensure operative balance of the budget and sufficient level of financial resource accumulation for covering fu-ture liabilities, as well as it increased the future forecast of credit rating of the city from stable to positive. In the assessment of the agency, such factors as sufficient liquidity of financial resources, accumulation of financial resources, and ability to ensure covering liabilities in the coming years are mentioned as the financial sector positive factors of the city.4

2.2. ECONOmIC ACTIvITy OF POPULATIONThe population of Riga is a key driving force and foundation for the eco-

nomic development of the city. As it is stated in the 2014 report of the ministry of Economics, gradual increase of economic activities positively affects the labour market – the level of employment increases and high unemployment caused by the crisis decreases. Nevertheless, certain groups of population, especially people with low education level and qualifications, elderly people, as well as young people, feel the improvement of situation less than others.

Since the middle of 2010, the total number of employees has steadily in-creased in Latvia. According to data of the Labour Force Survey, in the time period from 2011 to 2013 the number of employees has increased by 43.2 thousands, or by 14.4 thousands a year. The relatively stable economic recov-ery basically determined employment growth – since the end of 2009 gDP has increased by one fifth. At the same time, increase of employment has facilitated considerable decline of unemployment. The rate of unemployment has decreased by almost one half during the last four years.5

In 2013 the number of unemployed people in Riga continued to decrease, in one year time dropping by 3.1 thousand. In the end of 2013 approximately 18.3 thousand unemployed people were registered in Riga, decreasing the rate of unemployment to 5.6 % of total economically active population.6 In July 2014 on the national level the lowest rate of unemployment was regis-tered in the Riga region – 5.4 %, while in Riga it is 5.1 %. Comparing with the data of July 2013, the rate of unemployment has decreased by 0.7 %.7

Since 2011 Riga has the highest employment rate in the country and high-est increase of the number of employed people. In 2013 the most people are employed in the trade, finance and commercial sectors, as well as in transport sector. In comparison to 2008, the number of employees has decreased in industrial and construction sectors (by 43 %); but the largest increase can be noticed in finance and commercial activity sector, as well as in education sector.4 The Riga City Council Public Report 20135 The Report on the Latvian National Economy 20136 The Riga City Council Public Report 2013 Unemployment rates. The State Employment Agency. Available at: www.nva.gov.lv


Industrial manu-facturing

Construction

Trade

Transport

Finance and commerce

Public administration

Health protection

Other

Education

2008

2013

1712,7

12,26,9

2219,7

13,915,4

12,117,4

6,76,66,6

10,44,4

5,24,84,9

Employment in Riga by economic activity sectors (% of total)8

In 2014 wages in Riga are by 12 % higher than in the country overall. In comparison to the last year, in the first half of 2014 the average gross salary has increased, reaching on average 853 euro a month. In Riga, employees in the public sector have higher average gross salary by 101 euro than employ-ees in the private sector.

Average monthly wage (euro)9

*In the first half of the year

2.3. SECTORIAL STRUCTURE OF THE ECONOmy AND PRIORITy SECTORS

One of the key pillars for the development of the city is economy whose main task is enabling citizens to earn money and to take care of themselves and their families. Economy is directly related to other pillars as well – the urban environment (economical development based on the east – west direc-tion) and society (educated, capable and culture-respecting society). During the implementation process of the strategy of the city, municipal institutions choose such development policy activities that contribute reaching high em-

8 The Riga City Council Public Report 20139 The Central Statistical Bureau. Employees’ average monthly wage. Available at: www.csb.gov.lv

2011 2012 2013 2014*

In Latvia In Riga In Latvia In Riga In Latvia In Riga In Latvia In Riga

TOTAL 660 756 684 777 715 814 751 853

Public sector 701 828 732 859 766 894 790 919

Private sector 636 716 657 733 688 771 730 818


ployment rate, sustainable economical growth and price stability thus creating material basis for growth of welfare of citizens and the city itself.

The main part of gDP of Latvia is formed by the service sector (approxi-mately 70 %), manufacturing in the national economy forms 14.1 % of gDP, trade – 16.9 %, transport and storage sectors – 13 %, construction sector – 6.1 %.10 In 2013, the economical development of Latvia was supported by four main sectors – trade, construction, operations with real estate and com-mercial services. Consequently, by the breakdown of the sectors the growing economical dependence on the domestic market demand is emerged clearly. However, in the sectors of transport and logistics occurred only small devel-opment and in the manufacturing sector the overall results were the same as in the previous year.11

According to the data of the Riga City Council Public Report 2013, the larg-est proportion of economy sectors by added value has trade (19.3 %), trans-port (11.9 %) and professional, scientific and technical services, administrative and customer services (9.8 %). Only slightly smaller proportion has manufac-turing (9.7 %). During the post-crisis years major changes in the structure of Riga city economy sectors have not occurred; customer service sector still dominates in the economy of the city.12

Proportion of Riga economy sectors by added value (%)

* 2013 – evaluation

Industrial manufacturing

Construction

Trade

Transport

Finance and insurance services

Public administration

Health protection

Other

Education

2011

2013*Energetics

Information and communication services

Operations with real estate

Professional, scientific and technical services

9,89,7

3,73,4

4,55,3

19,319,3

12,811,9

77,3

5,86

8,39,1

109,8

5,85,6

3,43,2

2,92,8

6,76,7

10 Information platform Balticexport.com11 Nordea Economical review of Latvia. Available at: www.nordea.lv12 The Riga City Council Public Report 2013


By number of enterprises, in 2013 in Riga the most of enterprises work in sectors of real estate, services (financial, management, legal and other), and in transport and industrial sectors. By turnover, in 2013 the largest company in Riga was LLC Uralcheim Trading, at the same time period it was also the largest company in Latvia in trade sector. Next largest companies were JSC Latvenergo, state company working in the field of energy, and LLC Orlen Lat-via, working in fuel and wholesale of solid, liquid and gaseous fuels business.13

Number of companies by sectors in Riga sorted by overall turnover in 2013 14

Companies with highest turnover in Riga

Company Turnover, EUR In comparison to 2012

LLC URALCHEm Trading 1 123 360 042 -7 %

JSC Latvenergo 944 463 384 1 %

LLC ORLEN Latvia 769 964 666 11 %

LLC RImI LATvIA 672 326 380 7 %

JSC ELKO gRUPA 640 531 124 -11 %

JSC Latvijas gāze 573 963 012 -5 %

LLC LDZ CARgO 361 588 033 -8 %

LLC NESTE LATvIJA 327 087 764 10 %

LLC LUKoil Baltija R 325 524 078 0 %

JSC Sadales tīkls 298 417 745 1 %

The main priority sectors of the country are: production of food and bev-erages, manufacturing of wood products, production of chemical and phar-maceutical substances and production of chemical products, mechanical en-gineering and metalworking products, production of computers, electronic, electric and optical equipment, telecommunication and other IT services, stor-

13 Statistics of Lursoft. Available at: www.lursoft.lv14 Statistics of Lursoft. Available at: www.lursoft.lv

Renting and management of owned or rented real estate

Book-keeping, accounting, audit and revision services; tax consultancy

Consultancy on commercial activities and management

Freight transportation on roads

Construction of residential and non-residential buildings

Buying and selling of own real estate

management of real estate for remuneration or on contract basis

Legal services

Public relations agencies

Car maintenance and repair services

3 721

2 165

1 848

1 489

1 400

1 281

1 184

1 114

1 095

1 016


age and transport activities. Riga City Council City Development Department has defined the following priority sectors to improve the competitiveness of the City of Riga:

● transport and storage sector;● manufacturing of wood and cork products;● production of food and beverages;● computer, electronic, electric and optical equipment production and infor-

mation and communication technologies;● construction sector;● mechanical engineering and metalworking sector;● tourism, including other sectors that are important for development of tourism.

2.4. TRANSPORT AND LOgISTICS

Riga as the capital of Latvia, by its advantageous geographical location in the middle of Baltic States next to gulf of Riga, successfully operates as a crossroads between the East and the West of Europe, as well as the North and the South. The Riga municipality and involved institutions successfully fulfil their functions and responsibilities to maintain and to develop internation-al cooperation with all the involved countries. Riga can be called the largest transport and logistics centre not only of the region, but also the whole country where all types of transports are used.

For the development of the sector different types of studies are done by the Riga municipality. The main references, future goals and tasks are included in the following development planning documents of the city:

1. The Riga Development Programme 2014 – 2020;2. The Sustainable Development Strategy of Riga 2030;3. The Riga and Riga Suburbs mobility Plan (accepted in 2010) and action

programme thereof determining the priority activities to be implemented in the long-term in order to improve and to arrange the transport infra-structure considering the available financial resources. The main goal of the Riga and Riga Suburbs mobility Plan is to determine the necessary actions for creating joint traffic system and to improve territorial acces-sibility by ensuring coordinated and united transport infrastructure plan-ning and traffic organization in Riga and Riga suburbs.

2.4.1. Freeport of RigaSince old times Riga has had a port (the first mentioning in 5th century).

Initially it formed naturally along the coasts of Daugava as one of the destina-tions of the international trade route between the Baltic Sea and Black Sea; however, over the time it was developed and formed according to the particu-lar situation and requirements. Currently the Freeport of Riga is located at the


further southern part of the gulf of Riga and it has been formed along both coasts of Daugava in 15 km of length. The port is a multi purpose venue that in terms of cargo turnover is the fifth largest port in the eastern coastline of the Baltic Sea; in addition, it also provides passengers transportation.15

The Freeport of Riga is directly related to the development of the North axis of Trans-European transport network TEN-T and sea mainlines – in these directions it can serve as a transport junction. The Freeport of Riga is also strategically the most advantageous cargo transportation road in the region; cargo could be transported also in the European – Asian transport corridor (to/from Kazakhstan, China and other countries). Riga has the closest port of the Eastern border of the European Union with the consumer markets of Russia, Common Wealth of Independent States and Asia.

The Freeport of Riga for many years cooperates with international organiza-tions – the Cruise Europe organisation, the Baltic Ports Organization, the Euro-pean Sea Port Organization, the german-Baltic Chamber of Commerce in Lat-via, the International Association of Cities and Ports, the International Federation of Hydrographic Societies and the International Harbour master Association.

Riga has a multi-functional port handling all types of cargo except crude oil. The total cargo turnover in the first eight months of 2014 has reached nearly 27 000 tons, that is 14 % more than at the same time period last year. In 2014 the main types of cargo are coal (36.9 %), petroleum products (25.2 %), con-tainerized cargos (9.6 %) and timber (7.5 %). The transportation tonnage of chemicals, ore, scrap-iron and different types of metal has increased. Overall, the port serves 4000 ships a year on average; the majority of them are dry cargo ships, oil tankers and container ships.

The structure of transhipped cargo in January – August 2014

15 The Freeport of Riga Authority. Available at: www.rop.lv

Chemicals6,1 %

Containerized cargos9,6 %

Petroleum products25,2 %

Coal36,9 %

Timber7,5 %

Other14,7 %


Oil tankers

Passenger ships, ferries

Bulker

Container ships

Others

Dry cargo ships

2009 2010 2011 2012 2013

1000

2000

3000

4000

5000

2004 2005 2006 2007 2008

Amount and types of ships served

Cruise ships are served for a long time now in the Freeport of Riga. On may 22nd 2013 the cruise ship Ocean Dream paid its first visit in the Freeport of Riga. The visit of this ship in Riga was special – the ship Ocean Dream makes a hundred days journey around the world within the peace mission organiza-tion Peace Boat. Ships of such European cruise companies as MSC Cruises, Viking Line ABP, Pullmantur Cruises, Silja Line and others regularly visit the Freeport of Riga. In 2013, as it was in 2003, Riga was visited by regatta Tall Ships Races with its countless sailing ships – for four days everyone could explore gorgeous ships and talk with their teams.

Number of entering cruise ships and passengers in the Freeport of Riga

Besides cruise ships, since April 6th 2006 in the Freeport of Riga JSC Tallink provides passenger transportation in the route Riga – Stockholm. The number

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

61 431

48 82440 811

65 461

50 176

69 413

58 56463 527

83 091

66 968

107

84

60

90

76

88

6469

92

65

Ships entering the port

Number of passengers


of passengers rapidly increased from 2008 till 2009, when two ships cruised in the route Riga – Stockholm serving more than 500 000 passengers. At the moment, the number of passengers is decreasing – the ship M/S Isabelle cruises in the route Riga – Stockholm providing transportation of passengers, passengers’ vessels and cargo between Latvia and Sweden, departing from Riga and Stockholm every second day.

The number of ferry passengers in the Freeport of Riga

The Freeport of Riga Authority has started to elaborate an infrastructure devel-opment project “The Infrastructure Development in Krievu Sala for the Transfer of Port Activities from the City Centre”. In the Spatial Plan of Riga 2006 – 2018 it is also foreseen to make the northern crossing of Daugava and to continue the construction of the Freeport of Riga station in Kundzinsala. The Riga municipality also emphasizes the necessity for development of passenger transportation en-visaging facilitation of passenger transportation between Riga and other cities.

On February 7th 2011 the Freeport of Riga Authority agreed to be a partner for the Baltic Sea regional program of the European Union 2007 – 2013 in the project “Amber Coast Logistics”. Implementation of the project took place till march 2014 and the Freeport of Riga Authority was responsible for the 4th work package “The Concept of Sustainable and Efficient Transport Provision, multi-modal Transport Chains”, where four activities were included:

● macro economical development, the market perspectives of multimodal transport chains and their impact on land infrastructure of ports in the re-gion of ACL project (November 2011 – November 2012);

● innovations in the work of multimodal transport chains and their impact on the environment (march 2012 – July 2013);

● challenges in the port operations ensuring development of land infrastructure

2009 2010 2011 2012 20132004 2005 2006 2007 2008

50 828 53 89145 043

53 651

80 589158 700

152 315158 700

196 483206 438

271 831280 974

319 272327 622

416 000

360 211

444 769

370 261

118 897

388 768

Entering

Departing


and work of multimodal transport chains (January 2012 – September 2013);● the action programme of multimodal transport system in the Baltic Sea

Region (January 2013 – march 2014).

The existing data and development indicators of the port indicate long-term viability, confirmed by the forecasts of indicative traffic intensities included in the Freeport of Riga Development Programme 2009 – 2018. For elaboration of forecasts of entering ships traffic, cargo turnover was taken into account, as well as tendencies of small ship development, such as Handy Size, Handymax and Panamax.

2.4.2. Riga International AirportThe Riga International Airport is the largest international aviation company in the

Baltic States and it is the main air traffic centre of this region that provides regular passenger transportation, cargo and mail transportation with the civil aviation air-crafts to European and other cities world wide. The Riga International Airport pro-vides both aviation services (aircraft, passenger and cargo service) and non-avia-tion services (premises and territory renting, parking lots, vIP centre services and others). It works with domestic and international airlines and has become one of the few European airports that cooperate with both full-service and low-cost air-lines. 83 direct destinations are available from Riga International Airport.16

The Air Transport Research Society (ATRS), after comparing the financial data of 200 airports, has evaluated the Riga International Airport as the most com-petitive airport in Europe, taking into account expenses and structure of tariffs per passenger. ATRS carries out such research every year since 2002 and the Riga International Airport receives this honour for the first time. The research compared 69 European, 78 North American and 53 Asian airports. In order to determine the most effective and competitive airports in the world, comparative analysis of financial and price policies of airports included in the research have been carried out.

The Riga International Airport in the field of customer service handles transfer and transit passengers, passengers with special needs, under-aged children trav-elling unaccompanied, as well as accommodates vIP, CIP and general aviation passengers, handles passengers services in case of flight delay and baggage lost, and registers passengers, checks documents, organises passengers board-ing and getting off from the aircraft and supervises passengers on the platform.

In the airport group which includes the Riga International Airport (to 10 mPPA), the average share of transit passengers is around 9 %. The amount of transit/ transfer passengers in the Riga International Airport reaches 36.8 %; as a result, due to its experience with large number of transit passengers, the airport has 16 SJSC Riga International Airport. Available at: www.riga-airport.com


notable advantages in increasing the future number of transit passengers. In the Riga International Airport the main stream of transit passengers is provided by the airline company AirBaltic. In 2011 the AirBaltic market share in the airport was 66 %, or more than 3.37 million passengers.

Regular and non-regular flight services are performed in the aircraft, baggage, mail and cargo services. In October 2013 the Riga International Airport reached a new record in the amount of cargo shipments – 7 809 tons, that is by 215 % more than in October 2012, and by 290 tons more than in April 2012. The ma-jority of cargo shipments in the airport (~70 %) are for supply of the international forces in Afghanistan proving the credible partnership role of Latvia in the NATO.

Amount of cargo (t), passengers and flights in the Riga International Airport

For development of the airport, different types of projects are planned and implemented to improve both infrastructure and services. In 2015 it is sched-uled to finish the work on the project “The Riga International Airport Infrastruc-ture Development”; the aim of the project is to improve environmental condi-tions of the controlled and open areas, to enhance air travel security standards and to increase the capacity of the Riga International Airport. The project is financed by the Cohesion Fund.

In 2014 the project Complex Solutions for Reduction of greenhouse gas Emissions at the Riga International Airport has been started aiming to reduce greenhouse gas emissions by changing the existing luminaries with the ener-gy-efficient LED luminaries in the administrative building and in the terminal. The project is financed by the CCFI.17

2009 2010 2011 2012 20132004 2005 2006 2007 2008

27 325

8 751

34 552

15 896

40 162

12 558

47 347

8 130

57 232

7 669

60 087

9 431

68 145

12 294

72 855

12 665

68 572

32 953

62 486

51 087

1 060 426

1 878 035

2 495 020

3 160 945

3 690 549

4 066 854

4 663 647

5 106 926

4 767 7644 464 859

17 SJSC Riga International Airport. Available at: www.riga-airport.com

Cargo (t)

FlightsPassengers


2.4.3. Latvian RailwayLatvian railway transport is organised by two state enterprises whose centre

is located in Riga. For passenger transportation is responsible JSC Pasazieru vilciens, founded in 2001, but for freight transportation and overall railway in-frastructure is responsible concern Latvian Railway, which is one of the largest enterprises in the country employing almost 12 000 people.18

In Latvia the main railway passenger routes provided by JSC Pasazieru vil-ciens are:

● The electric train routes: Riga – Aizkraukle, Jelgava, Skulte, Tukums;● The diesel train routes: Riga – Daugavpils, madona, gulbene, Krustpils,

Sigulda, valga, Rezekne, Zilupe, Liepaja.19

In 2013 the passenger circulation in railway transportation reached 729 mil-lion passengers/km; that is four million passengers/km more than the previous year.20 It is expected that railway transportation services in the future will be used even more often.

Railway is one of the main transportation roads for variety oversized freight, and it is a essential development factor of the entire country, as well as sup-port for the economical growth. mainly bulk and liquid freight are transported by railway, however, during recent years, amount of transported containerized freight has also increased. In 2013 the majority of transportations were import freight – 47.7 million tons, or 85.4 % of the total freight transportations. In comparison to the previous year, import freight decreased by 4.1 %. moreo-ver, in 2013 freight transportations through ports were 45.2 million tons that, in comparison to the previous year, is 7.7 % less. 4.4 million tons were export freight transportation – by 10.8 % less than the previous year. 2.6 million tons were transported by land transit and in 2013 1.2 million tons were domestic freight transportation.21

Freight transportations are mainly done from Russia and Belorussia to Lat-vian ports,22 but only 2 % are domestic transportations.23

Understanding the major influence of railway on the development of the country, more and more new projects are elaborated and implemented for the development of railway infrastructure and services. Currently TEN-T project is implemented for track reconstruction in the Rail Baltica corridor in Latvia; its aim is to reconstruct and to adjust existing railway tracks in the sections from Sigulda till Latvian and Estonian boarders in valka and from Jelgava to Latvi-

18 SJSC Latvian Railway Annual Report 201319 JSC Pasazieru vilciens. Available at: www.pv.lv20 The ministry of Transport of the Republic of Latvia. Passenger circulation of railway transport in the first quarter of 2014. Available at: www.sam.gov.lv21 SJSC Latvian Railway Annual Report 201322 SJSC Latvian Railway Annual Report 201323 The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv


an and Lithuanian boarders, ensuring freight train speed up to 80 km/h and passenger train speed up to 120 km/h. In the autumn of 2014 elaboration of sketch project for electrification of the Latvian railway network was finished. This project is the initial stage for electrification of the Latvian railway network in the East – West corridor, Rail Baltica route, and modernization of the exist-ing electrification network for operating with alternating current of 25 kW. After finishing this project, the necessary sketch project is developed for elaboration of the project application to receive European Union financing and to prepare procurement documentation for electrification works.

Besides that, the following projects co-financed by the Cohesion Fund are implemented:

1 modernization of Liepaja station signalling system with reconstruction of rail tracks;

2. Reconstruction of railway tracks;3. Replacement of switches;4. Construction of the second track in the section Skriveri – Krustpils;5. modernization of railway passenger infrastructure;6. Reconstruction of marshalling hump of Skirotava Station;7. Construction of the Bolderaja 2 station with an access track to the Krie-

vu Sala terminals;8. modernization of signalling, telecommunication and power supply sys-

tems in the section Bolderaja 1 – Zasulauks.24

Freight turnover in railway transport (million t/km)25

24 SJSC Latvian Railway. Available at: www.ldz.lv25 The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv

2009 2010 2011 2012 20132004 2005 2006 2007 20082002 200320012000

13 31014 179

15 020

17 95518 618

19 779

16 831

18 31319 581

18 725

17 179

19 532

21 86721 410


24 SJSC Latvian Railway. Available at: www.ldz.lv25 The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv

Information of the freight transportation amounts (thousand tons) transported by JSC LDZ Cargo in the Latvian railway in August and eight months of 2013 – 201426

2.4.4. Road freight transportRoad transport also has an important role in the development of transport

sector and national economy. Road freight transportation has two NACE 2 codes 49.41 and 49.42. According to the Central Statistics Bureau, in 2012 there were 3 296 companies working in the railway and pipeline transport sector27 proving that the market is fragmented and dense.

Road freight transport makes approximately 29 % of the total freight trans-port volume in the country and in 2013 more than 80 % of road freight transport was particularly domestic road transportations. From 2010 till 2013 in Latvia, including Riga, relatively small changes can be observed in the market; on av-erage domestic road freight transportations are 50 000 thousand tons a year.

Road freight transport (thousand tons)28

August 2014 % 8 months 2014 %

2013 2014 vs 2013 2013 2014 vs 2013

Transported cargo – overall, incl.: 4 218 3 899 92,4 37 821 38 891 102,8

Domestic shipments 195 203 104,1 688 678 98,5

Export shipments, incl.: 353 297 84,1 2965 3 006 101,4

via near port stations 201 128 63,7 1 164 1 051 90,3

Import shipments, incl.: 3 426 3 270 95,4 32 245 33 957 105,3

via near port stations 3 141 3 033 96,6 29 392 31 220 106,2

Land transit 244 129 52,9 1923 1250 65,0

26 SJSC Latvian Railway. Amount of cargo shipments. Available at: www.ldz.lv27 The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv28 Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv

2010 2011 2012 2013

7 6009 149 9 564

10 12539 209

44 787 43 05750 484

46 80953 936 52 621

60 609

International

Domestic


2.5. SCIENCE AND TECHNOLOgy

Science and technology sector is the basis for national economy, and it has an important role in the prosperity and development of the country. In Latvia the amount of investments in the field of research since 2000 has increased more than 2.8 times. Riga is in the first place in Latvia in terms of number of universi-ties and students and it is also a scientific, research and innovation technology centre of the country. 80 % of all the universities of Latvia are located in Riga. Therefore, the main task of the city is to continue preparing high-level experts, who could contribute in creating new scientific solutions and in developing innovations in the market. In addition, Riga with its educational base is already the centre of medical field in the Baltic States scale; it could also become a centre in the pharmaceutical and biotechnological sectors.

There are seven scientific institutions – the Institute of Electronics and Com-puter Science, the Institute of Physical Energetics, the Latvian Institute of Aquatic Ecology, the Latvian Institute of Organic Synthesis, the Latvian State Institute of Agrarian Economics, the Latvian State Institute of Wood Chemistry and Latvian Biomedical Research and Study Centre, as well as two private scientific institutes – LLC Economical Institute of Latvian Academy of Sciences and the Information Technology Institute of Riga working actively in Riga.29

The interest of entrepreneurs for science and new researches is directly linked to their free financial resources and new funding possibilities with the support of different national and European Union programmes and funds. To develop and to improve entrepreneurship, services of technology practice contact points (hereinafter – TPCP) are provided. Four of eight TPCP operate in Riga:

1. TPCP of the University of Latvia;2. TPCP of the Art Academy of Latvia;3. TPCP of the Riga Technical University;4. TPCP of the Riga Stradina University.

A technology practice contact point is a structural unit of a scientific insti-tute or a university, that supports and promotes knowledge and technology transfer activities, as well as is responsible for founding and maintaining ex-ternal networks (including private sector), by providing information about the research activities and experience of the organisation. Its aim is to identify the existing and necessary research competences in universities and institutes, and to develop them.30

2.6. TOURISm

Tourism is a one of the priority sector of the economy of Riga and Latvia, and the capital city is the most popular foreign tourist destination in the coun-29 The ministry of Education and Science of the Republic of Latvia. Available at: www.izm.gov.lv30 The Latvian Investment and Development Agency. Technology Practice Contact Points. Available at: www.liaa.gov.lv


try. To promote the development of tourism sector, country has defined the following economical goals of the sector:

● to increase the share of foreign tourists that stay for three and more days;● to increase the growth of export of tourism services every year by 5 – 10

% in comparison to the previous year;● to achieve the characteristic growth of gDP in tourism sector up to the

average level of countries in Central and Eastern Europe (on average 5 %);● to ensure that growth of share of local tourism services every year has a ten-

dency to outperform the growth of total share of export tourism services.31

Riga, as the Hanseatic League city, has all the precondition for becoming a favourable tourism destination. Since 1997 the historical centre of Riga has been included in the UNESCO cultural heritage list, the city has high quality ur-ban construction, architecture, artistic and historical monuments, and different relaxation possibilities.

Currently the main tourism promoter and developer of the sector is the Riga Tourism Development Bureau, more widely known by its tourism brand name Live Riga. The bureau ensures a platform for five trends:32

● „Look Riga” -

● „Feel Riga”

● „Stay Riga”

● „meet Riga”

● „Work Riga” Since its foundation in 2009, in the frameworks of Live Riga different mar-

keting campaigns in foreign countries have been started – in Russia, Lithuania, Estonia, Denmark, Finland, germany, Norway and elsewhere; therefore, the amount of tourists in Riga has increased. According to statistical data, the amount of guests accommodated in hotels and other accommodation places increase every year – the number of foreign tourists accommodated in 2013 has been almost by 125 000 guests more than in the previous year.

Overall, at the end of 2013 in Riga there were 115 accommodation places, with total number of beds 13 187. In the first half of 2014 the occupancy of hotel beds has grown almost by 64.1 %. In 2013 the majority of tourists came from Russia, Lithuania, Sweden, Estonia, germany and Norway. mostly tour-ists visit Riga during the summer season.33

31 The marketing strategy of Latvian Tourism 2010 - 2015.32 The Bureau of Riga Tourism Development. Available at: www.liveriga.com33 The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv

information about sightseeing

objects, museums and other places in Riga where

events take place

information about events, restaurants,

SPA and shopping

places in the city

information about short-term

or long-term accommodation

possibilities in the city, as well medical tourism

information about

conference, meeting

and event possibilities in

Riga

information about business, invest-

ments, export and possibilities to

develop the eco-nomical environ-ment in the city

LOOK RIGA

FEEL RIGA

STAy RIGA

mEET RIGA

WORK RIGA


Indicators of hotel usage – bed occupancy in Riga (%) 34

Number of tourists accommodated in hotels and other accommodation places in Riga 2009 - 201335

Everyone, regardless of age, gender or interests, can find something inte-resting and useful in the capital city of Latvia, Riga:36

1. Rīga – Baltijas kultūras galvaspilsēta!2. Rīga – arhitektūras pērle!3. Rīga – gastronomijas galvaspilsēta!4. Rīga – vieta aktīvai atpūtai!5. Rīga, kur satiekas gadsimti!6. Rīga – pilsēta tavam skaistumam un labsajūtai!7. Rīga – pilsēta iepirkumiem!9. Rīga – pilsēta tavai veselībai!10. Rīga – pilsēta tavam biznesam!2

2010 2011 2012 2013

34,07

40,8143,31

48,13

Foreign guests

Accommodated guests all together

2010 2011 2012 2013

779 852676 945

943 671823 698

971 728845 681

1 112 990971 303

34 The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv35 The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv36 The Bureau of Riga Tourism Development. Available at: www.liveriga.com

Culture capital of

the Baltic’s! An architectural pearl!

Capital of gastronomy!

Place for active

holidays!

Where centuries meet!

City for beauty and wellness!

City for shopping!

City for your health!

city for your business!


2.7. INvESTINg IN RIgA

Explicit cyclicality can be observed in the dynamics of investments. During the years of economical recession, the amount of investments in the economy of Latvia decreased considerably; but while the economical situation progress, investment activities are growing relatively quickly. In 2013 the amount of in-vestments in the economy of Latvia was by 4.3 % less than in the previous year and it made 21.1 % of gDP. At the beginning of 2014 the dynamics of investments were slowly growing – during the first quarter of the year in the economy was invested 2.2 % more than a year ago.

The country and city have an essential role in the process of investing. In the conditions of weak crediting, the state ensures a crucial support for private investments with co-financing of European Union structure funds.

During the first quarter of 2014 in the economy of Latvia was invested 2.2 % more than in the previous year, including investments in the production sectors grew by 6 %, while the investments in the services sectors stayed at the level of previous year.37 According to Lursoft data, the direct foreign investments in share capital of registered companies in Riga in the first half of 2014 exceed-ed 5.4 billion euro that is by 3 % more than in the previous year. The amount of foreign investments in the city is 79.3 % of total foreign investments in the country. The largest investors in Riga are Swedbank AB, GE Capital Global Financial Holdings Inc. and DnB Bank ASA.

Direct foreign investments in share capital of registered companies in Riga (million euro)38

Lielākie investori Rīgā, uz 2014. gada 1. jūliju3

37 The Report on the Latvian National Economy 201338 Statistics of Lursoft. Foreign investments. Available at: www.lursoft.lv

2009 2010 2011 2012 20132004 2005 2006 2007 20082002 200320012000 2014

1,05311,2126 1,3511,38501,46711,7769

2,04042,3372

3,068

4,31364,50644,5682

5,02275,4250

0,9404


In 2013 47.6 %, of capital, investments of the Riga municipality budget in the sector structure were allocated for economical activities, the majority (90 %) were investments in the development of transport sub-sectors. The second largest share was invested in the social security sector (20 %) and the third –the education sector – 14.5 %. The dynamics of total capital investments of the city in the recent years shows stable investment amounts of the municipality.

The Riga municipality has been active in implementing different projects financed by the European Union funds. In order to implement such projects, in 2013 from the budget of Riga municipality 31.9 million lats were allocated. In 2013, the largest projects of the ERDF, the TRN-T and the Cohesion Fund of the Riga municipality were the following:

● Reconstruction of vienibas gatve (from Kaplava Street to Ozolciema Street);● Reconstruction of Krisjana valdemara Street and Daugavgrivas Street traf-

fic junction;● Integration of Riga city and port in the TEN-T road network: finishing the

research on the Riga Northern transport corridor;

39 Statistics of Lursoft. Foreign investments. Available at: www.lursoft.lv

Investor Country Investments, EUR

Swedbank AB Kingdom of Sweden 942 853 583 64

gE Capital global Finansial Holdings Inc. United States of America 226 794 320 00

DNB BANK ASA Kingdom of Norway 191 178 337 06

Rugby Holding B.v. Kingdom of Netherlands 137 456 708 00

TILTS COmmUNICATIONS A/S Kingdom of Denmark 101 850 587 08

BERgvIK SKOg AB Kingdom of Sweden 99 674 169 47

BITE Lietuva UAB Republic of Lithuania 99 085 286 00

European Bank for Reconstruction and Development United Kingdom of great Britain and Northern Ireland

93 030 206 15

Euromin Holdings (Cyprus) Limited Republic of Cyprus 73 587 176 51

Tele2 Sverige Aktiebolag Kingdom of Sweden 71 146 436 28

NEW EUROPE REAL ESTATE Ltd. United Kingdom of great Britain and Northern Ireland

68 927 034 00

Ektornet Latvia AB Kingdom of Sweden 66 589 652 66

LINSTOW AS Kingdom of Norway 65 532 144 00

guselnikov grigory The Russian Federation 62 373 018 65

Patras Holdings B.v. Kingdom of Netherlands 60 628 482 48

menkevicius Audrius Republic of Lithuania 53 662 755 00

yIT Construction Ltd. Republic of Finland 47 429 297 50

Boswell (International) Consulting Limited Republic of malta 47 111 285 65

Contaq Latvian Cable Holding S.a.r.l. The grand Duchy of Luxembourg 45 679 769 89

FRITRADE SE Kingdom of Denmark 42 643 126 68

The largest investors in Riga, to July 1st 201439


● Providing technical equipment corresponding to qualitative studying of natural sciences in 63 general educations schools of Riga;

● Building the tourism potential of grizinkalns cultural and historical heritage.40

It is expected, that the amount of investments in the economy of Latvia will gradually increase in the future. However, the dynamics of the investing process will be determined by the accessibility of financial resources, increase of the overall demand and the implementation of state supported projects for business promotion.

2.8. CREATIvE INDUSTRIES IN RIgA

Due to the National Culture Policy guidelines, creative industries have a significant role in the development of culture; as a new economy sector it en-sures use of cultural and artistic resources in creating products and services with high added value.

Creative industries are defined as activities based on the creative work, abilities and talent of an individual and that have the potential to make prod-ucts with high added value creating and using intellectual property. Creative industries include architecture, marketing, industries of art and culture, design (including fashion, graphical design and applied arts), film, computer games and interactive programs, music, new media, publishing, radio and Tv.41

Referring to several international comparative researches, for future fore-casts and existing state support instruments promoting effects, there are two priority sectors of creative industry in Riga – design and audio-visual media and multimedia that have the highest export potential. In the sectors of multi-media and audio-visual media the following enterprises are operating in Riga – Lattelecom Technology, DD Studio, film studio Rija and others. In general all creative industries have close link to other sectors, both in creative industries and outside it; besides that, creative industries sector adds value to the urban environment.42

Creative industry centres have established themselves in different quarters of Riga; any of them is unique and with a positive influence on the urban en-vironment – they have become an essential part of cultural and economical development of Riga.

The largest and most well known creative industries in the city are:● Andrejsala – home of innovation and creative industries, it forms the new

cultural environment in the city of Riga. The industry brings together pro-fessionals of different sectors – audio and visual arts, architecture, in-

40 The Riga City Council Public Report 201341 The ministry of Culture of the Republic of Latvia. Creative industries. Available at: www.km.gov.lv42 The Riga Tourism Development Bureau. Creative Riga. Available at: www.liveriga.com


formation technologies, and design and other sectors. In the future it is expected that Andrejsala will enrich the spatial, public open space and transport structure of Riga historical centre; becoming also an important place for business, residence, tourism and entertainment.

● Spikeri – located next to the Central market of Riga, it is the quarter of the city and home for creative culture organisations, events of contemporary music and cinema, art galleries, offices, cosy restaurants and cafes. In-cluded in the UNESCO heritage list, the industrial aesthetics of territory of Spikeri serves as an inspiration for the development of the whole quarter. The territory becomes contemporary, modern and publicly accessible ur-ban environment.

● Riga Film Fund is co-funded by Riga City and its aim is to promote foreign film production in Riga and Latvia. Co-funding are intended for film pro-jects co-produced by Latvia and foreign countries, planned to be filmed in Riga or Latvia; attracting foreign investments, creating new job places, developing national cinema industry and popularizing Riga in the world.43

● Kalnciema Street quarter attracts visitors not only with the 18th/ 19th cen-tury wooden houses, but also with events, theatrical performances, films, musical performances and markets.

● The Republic of miera Street is a world of little shops, cafes, workshops and other creative initiatives.44

● RISEBA, the largest media centre in the Baltic States, the home of archi-tecture, art of audio visual media, culture, education and business.

● vEF creative quarter, where different art events – exhibitions, creative work-shops, plays, concerts and others take place already from 2008. Currently there are at least 20 artist workshops in this quarter.

● Tobacco factory that is an innovation centre of interdisciplinary education, culture and business.45

43 The Riga City Council City Development Department. Portal: www.investeriga.lv44 The Republic of miera Street. Available at: www.mieriela.lv45 Creative quarters in Riga. Available at: www.radosiekvartali.wordpress.com


3. BUSINESS AND INvESTmENT ENvIRONmENT3.1. LEgAL FRAmEWORK

The quality of the business environment is one of the most important el-ements for raising competitiveness of the country, and for the city, as well, – better conditions state can ensure for entrepreneurs, the more investments can be expected in the national economy, and that means new job places and prosperity for its citizens. One of the main aspects of business environment is the legal framework that can regulate the environment to the positive or neg-ative direction. Not only legal documentation of the city, but also the national and the European Union legal acts are relevant for entrepreneurs in Riga.

In Latvia the most common tool to assess the business environment is an international study “Doing Business” carried out by the World Bank. In the study of year 2014 among 189 countries Latvia is ranked on high the 24th place and on the 9th place among member states of the European Union.1

The market of Latvia is a free market, and all interested parties, including foreign investors, have equal rights to start a business in any city or populat-ed area. general business regulatory normative acts apply to all companies equally. The main normative acts are:

● The Commercial Law that defines who is a merchant, what is merchant company, prescribes a procedure for registering a merchant and merchant company in the commercial register;

● The Competition Law, the aim of which is to protect, to preserve and to develop the free, fair and equal competition in all sectors of the national economy in public interests by limiting market concentration obliging to ter-minate the prohibited activities and prosecuting perpetrators;

● The Law on Taxes and Fees that defines forms of taxes and fees and a procedure for estimating, collecting, levying taxes and fees, and rights, du-ties and responsibilities of tax and fee payers and administration, taxpayer registration procedure, as well as, an appeal procedure against decisions on taxes and fees issues. The tax system in the country is structured divid-ing taxes in four types – national taxes and fees, municipal fees and taxes defined in the laws and regulations of the European Union.

In the budget of Riga municipality the following taxes and non-taxes appli-cable to entrepreneurs in the city are included:

● personal income tax for employers registered in the administrative territory of Riga for employees whose place of residence at the start of the tax year

1 Ekonomikas ministrijas 2013. gada publiskais pārskats.


was declared in the administrative territory of Riga;● real estate tax paid by Latvian or foreign natural and legal persons who has

a real estate in their ownership or in legal possession;● lotteries and gambling tax paid by capital companies that have, under the

statutory procedure, obtained a special permit (licence) to organise and maintain lotteries and gambling;

● state fee for changes of last name, first name and nationality records in person identification documents;

● state fee for registration, amendments and supplements of civil registra-tion records;

● state fee for issuing special permissions (licenses);● state fee for declaring domicile;● municipal fee for trade in public places;● municipal fee for keeping animals;● municipal fee for receipt of official documents of the City Council and their

certified copies;● municipal fee for placing advertisements in public places;● municipal fee for maintenance and development of municipal infrastruc-

ture in Riga;● municipal fees for construction works.

Other taxes applicable to entrepreneurs in the state, including the city:● enterprise income tax, that is paid of the taxpayer’s taxable income –

a profit generated from business activities subtracting expenses related to business activities;

● micro-enterprises tax;● state social insurance mandatory contributions;● natural resources tax;● value added tax;● customs duty;● tax on cars and motorbikes;● vehicle operating tax and company car tax;● electricity tax.2

3.2. BUSINESS START-UP

To start a business, you need an idea and a plan how to realise it, only then you can choose a business type corresponding to particular company idea and to start registration procedure. Companies in Latvia are registered in the Register of Enterprises.

Altogether in Latvia there are five legal forms of commercial companies, the most common of them is a company with limited liability. According to Lursoft data, by the first half of 2014 in Riga there are registered 6 635 companies, 6

2 Riga municipality portal: www.riga.lv; legislative web site Likumi.lv


362 of them are companies with limited liability, 158 are individual merchants, but 29 are joint-stock companies.3

Company registration process in Latvia is simplified, and – comparing to other Baltic States, in Latvia there is the lowest number of procedures and the lowest minimum share capital (1 EUR). Since 2012 the electronic registration system in the Register of Enterprises is introduced via a portal www.latvija.lv, where you can also declare amendments in registration data, information on reorganization, liquidation and termination of the contract. Thus, Latvia has considerably facilitated the commencement of the business.

3.3. REAL ESTATEOne of the defining features of Riga development opportunities is its territorial

planning and the real estate of the city, and the market related to it. One of the long-term objectives of Riga is “Opportunity city for everyone”, hence infrastruc-ture and environment of the city is strategically planned for entrepreneurship. The defined development directions of the city for functional use of the territory are:

● development of functions of capital city;● development of municipal functions;● development of business and office functions;● development of commercial services.To ensure above-mentioned directions, different types of functional objects

are needed.

In the market of office building facilities, in the first half of 2014 demand for office premises in Riga has not considerably changed comparing to the begin-ning of the year. During this period there have not been also notable changes of office rent fees. In several categories of office premises share of free facilities has slightly increased. The most active office premises searchers were IT field companies, legal service providers, education-related entities, as well as pub-lic organisations. The most requested are office premises in the active centre of Riga and in high-quality office buildings in the neighbourhood of Duntes Street, Skanstes Street, as well as near Pardaugava. most of the demand is formed by companies that need premises up to 200 m2 area large.

Rental fee of office premises, free space4

Category of office premises

Rental fee, EUR/m² per month

Rate of free space

„Prime” 16–18 3 % – 5 %Class A 13–16 4 %

Class B (centre) 10–13 7 %Class B (other) 8–11 20 %

Class C 4–8 20 % – 30 %

3 Lursoft statistics. Foreign investments. Available: www.lursoft.lv4 market review of trade premises in Riga. 2nd quarter of 2014. Available: www.latio.lv


In the second quarter of 2014 a range of rent charged for Class A office premises was 13 to 16 euro for one square meter per month, Class B office premises – 8 to 13 euro (Riga Centre – 10 to 13 euro, Pardaugava and other territories outside the centre – 8 to 11 euro) for one square meter per month, while Class C office premises – 4 to 8 euro for one square meter per month.

As indicated in the Riga Spatial Plan 2006 – 2018,5 the development of com-plex of Class A offices is planned in new development centres and in other par-ticular areas – in Kipsala, Kliversala, Citadele, Andrejosta, neighbourhood of the Central Station, and building zones of Hanzas street – Skanstes street centres.

In the segment of trade premises the largest activity is in the Old Riga and in the active centre of Riga where number of unrented premises are small. In recent years, in the centre of Riga share of free premises has decreased very rapidly – at the end of 2009 25 – 30 % of trade premises were unused. The demand tends to be segmented – lessees are choosing trade facilities in plac-es with better pedestrian flow and closer to other successful merchants. The most active facilities searchers in the Old Riga and in the centre of Riga are restaurants and other catering businesses. For these lessees very important factor is the ability to have an outdoor terrace. Overall, the most requested premises are 50 – 100 m2 area large.

Rental fee of trade premises, free space6

Category of premises Rental fee,EUR/m² per month

Rate of free space

The best trade premises in the Old Riga 40 – 70 0 %

Premises in active trading streets 15 – 25 10 %

In the Old Riga on streets such as Kalku Street, valnu Street, Audeju Street, as well as on some of the sections of streets in active centre rent of 50-100 m² area large premises in the 2nd quarter of 2014 was 40 – 70 euro for one square meter per month. In the centre of Riga on the best commercial streets – Terbatas Street, K.Barona Street in the direction from the centre to gertrudes Street, Brivibas Street till Lacplesa Street, Elizabetes Street between Brivibas Street and A.Caka Street, in the neighbourhood of the railway station – rent of 150 m² area large premises for the 2nd quarter were 15 – 25 euro for one square meter per month. In suburbs in areas with high pedestrian flow rent of good trade premises is 4 – 15 euro for one square meter per month.

In the segment of warehouses and industrial facilities, activity of lessees and level of rent fee in the 2nd quarter of 2014 comparing with the first months of the year has remained unchanged. The largest demand is for high-quality warehouses and industrial facilities of the area up to 500 – 1000 m2. In general, the offer corresponding to needs and requirements of lessees is limited.

5 The Riga Spatial Plan 2006 – 2018 with amendments6 market review of trade premises in Riga. 2nd quarter of 2014. Available: www.latio.lv


One of objectives of Riga is to ensure that it is an opportunity city to anyone regardless of different aspects (gender, age, nationality, etc.) – everyone can fulfil their visions and dreams. To achieve that, the most important task is to ensure adequate support from the municipality. Riga business environment attracts active people and companies that by earning create workplaces, as well as income for themselves and others.

The Riga municipality are implementing a range of activities to continually support new and existing entrepreneurs, as well as creates favourable envi-ronment for development of enterprises. The management of the Riga City is interested in creating new businesses; therefore, it informs and encourages young people to start their own business. In 2014 different types of support tools and documents were used, that contributed to the emergence of new enterprises and the development of existing ones, thus creating an innovative, open and exportable economy in the city.

In the Riga Development Programme for 2014 – 2020 a favourable busi-ness environment and high economic activity is defined as one of development directions. As it is indicated in the programme, the municipality has identified a variety of tasks to achieve the goal – cooperation with scientific and business sectors will be strengthened for innovation development where municipality will take the role of mediator. Also, the municipality will continue to provide support for implementation of new business ideas in the city and will seek co-operation opportunities with partners interested in the growth from public and private sectors. Since previous experience shows the lack of territory and facil-ities suitable for industrial manufacturing in the city, the municipality will also be actively involved in initiatives that focus on development of industrial areas in its territory. To strengthen the international competitiveness of Riga, activities that focus on international business attraction to Riga will be continued, using the already existing experiences, and the cooperation with international organ-izations, as well as seeking new opportunities for the promotion of the city.7

In the Riga Spatial Plan 2006 – 2018, policy of using the territory of the city is defined, and hence also the possibilities for entrepreneurs developing their activities in most appropriate areas in the city.

In the Sustainable Development Strategy of Riga until 2030 it is defined that pillar of the economy of the city is the following priority sectors: a port, the chemical industry, computer technologies, manufacturing of electronics, professional, scientific and technical services, metalworking industry and me-chanical engineering, transport and logistics, tourism and education. The eco-nomic trends of the city suggest that particular attention should be paid to efforts to increase the added value of manufacturing – export of high added 7 Development Programme of Riga 2014 – 2020.

3.4. BUSINESS SUPPORT PROvIDED By THE mUNICIPALITy


value industrial production ensures multiplicative effect to economic develop-ment of the city and the state overall.8

The Riga City Council, in cooperation with Swedbank, in 2009 has developed a grant programme “Atsperiens” (Take-off) aiming to promote the development of small and medium-sized enterprises, to motivate emigrated people of Latvia to return to Riga, as well as to speed up reaching the European Union welfare level. Regarding the grant programme “Atsperiens” it is possible to receive co-financ-ing of 80% for covering various expenses of new merchants – for purchasing specific technical equipment and licences, accounting and legal – consultant ser-vice fees, web site development, specific employees’ training, elaboration of mar-keting materials, costs of rent and improvements of premises, etc. The maximum grant available for one merchant is 15 000 euro. Twice a year, an open call of the tender is organised to determine economically viable and innovative businesses ideas in Riga. In 2014 the total funding of the grant reached 140 000 euro. So far 12 open calls have been organised, in total 1 118 business ideas were submitted and support has been granted to 105 companies for more than 760 000 euro. Since the 10th open call the mentor club of the programme “Atsperiens” has been launched, where winners of the previous tenders share their experience with emerging entrepreneurs, by telling about the business development process methods, challenges, achievements, lessons learned and errors made.9

One of the leading and priority sectors in Riga is tourism, therefore a project with the brand name Live Riga was developed, whose main task is to pro-mote the business cooperation and exchange of information with the citizens and guests of Riga. During the project implementation the web site www.in-vestinriga.com was created; the Riga City Council continues to maintain it and updates the information on the economic accessibility of the city to local and foreign investors – all the information you need about the city as an attractive investment destination, including data on economic and market dynamics, and the availability of labour force, advantages and business support pro-grammes, as well as it advices companies on development opportunities and possibilities to attract investors.10

To facilitate collaboration between the municipality and entrepreneurs, as well as the development of priority sectors, the contact with industry associations

8 Sustainable Development Strategy of Riga until 2030.9 The Riga City Council City Development Department. Portal www.investeriga.lv10 The Riga City Council City Development Department. Portal www.investeriga.lv

www.liveriga.lv www.investinriga.com


and business associations have been constantly maintained. The municipality also periodically participates in various level and type of exhibitions and busi-ness promotion events. The most important event of industrial manufacturing in the Baltic region is an international exhibition of engineering, metalworking, automation, electronics, electrical engineering, tools and new technologies Tech Industry that takes place in 2014 in Riga International Exhibition Centre Kipsala.

In 2014 the mIPIm event will take place in Cannes, France for the 25th time; it will be attended by the most important real estate market participants of the world – starting from the territory development concept experts up to investors and project users. It is a precious opportunity to get acquainted with investment opportunities and development projects around the world, as well as with members, partners, and potential capital sources.11

For a long time the Riga City cooperates with the foundation The Riga Brand, whose trademark is officially registered as belonging of the city; it is given only to the high-quality products and services. Its aim is to promote products in the priority export markets of Latvia (Russia, Ukraine, Belarus, Sweden, United Kingdom, etc.), thus giving a trademark-using companies and service provid-ers more opportunities for export development. Partners and participants of the foundation are one of the most successful and innovative companies in Riga that by their work improve export and economic indicators of Latvia.12

The Riga municipality actively cooperates with the Latvian Investment and Development Agency, thus contributing to development of entrepreneurs, coop-eration with foreign investors, as well as, establishment of new companies. In the Riga region there are also business incubators established; one of those – a cre-ative industry incubator “Creative Andrejsala” promotes the emergence of new products, general growth and increase of export of creative industry in Riga.13

3.5. BUSINESS SUPPORT INSTITUTIONSBeside municipal services and support activities, entrepreneurs have op-

portunity to cooperate with many other public and private support institutions in Riga that provide various support services for entrepreneurs and investors in Riga or represent their business interests in the city and beyond it.

The Investment and Development Agency of Latvia (LIAA) is the globally competitive organization that managed to attract dozens of million euro of direct foreign investments to Latvia, to conclude export transactions for sev-eral dozens of millions euro and to create hundreds of new job places, also managed to promote the development of industrial parks, establishment of new research laboratories, as well as collaboration in the field of technology transfer. LIAA is one of the organizations where entrepreneurs have possibility to attract co-financing of the European Union for their development. It offers a

11 The Riga City Council City Development Department. Portal www.investeriga.lv12 The Business club “The Riga Brand”: www.rigamark.com13 “Creative Andrejsala”: www.csala.lv


very wide range of services, including a variety of free of charge seminars for business development, fundraising, export opportunities, and more.14

State owned JSC “Latvijas Attīstības Finanšu institūcija Altum” (Latvian de-

velopment financial institution Altum) offers a wide range of services for en-trepreneurs, main support providing to those directions that contribute to the development of the national economy and create added value. Within support programmes implemented by ALTUm, funding can be received by business start-ups, as well as by experienced entrepreneurs who want to develop and to increase business competitiveness, as well as by farmers for various needs.15

Connect Latvia is an association that connects entrepreneurs with inven-tors and investors to create and to develop new and innovative companies in Latvia. The Association aims to promote establishment and development of new and innovative businesses, as well as to support commercialisation of in-novative projects, thereby facilitating creation of new and well-paying job plac-es in the knowledge-intensive industries. The Association organizes different measures that help entrepreneurs to receive the assistance necessary for the implementation of the business plan, offer mentoring services and organize new contacts stimulating measures.16

Creative Andrejsala is a business incubator, where creative industry entre-preneurs up to two years of age can receive support. The incubator offers co-fi-nancing for renting premises, services and research, new networking, etc.17

TechHub Riga supports new entrepreneurs of information technology industry, subsidizing job places, training, providing mentoring services, promoting and or-ganizing new contacts with industry experts and investors motivating measures.18

The Young Entrepreneurs Centre is a foundation whose aim is to promote the development of entrepreneurship in Latvia, to provide professional advice to emerging entrepreneurs during the period of establishing a new business. To achieve that, it offers a number of activities – training, individualized coun-selling and thematic seminars for young entrepreneurs.19

The Latvian Technological Centre provides consulting, research services, organizes seminars, ensures soft landing services, as well as processing of foreign and local business technology requests and helps enterprises to seek new solutions. The aim of the Centre is to promote development and interna-tional cooperation of technology-driven small and medium-sized enterprises, through using more than 20 years of experience in business incubation, trans-fer of technology, commercialization of knowledge, establishing international business contacts, development of training programmes, evaluation of inno-vation systems and elaboration of different level innovation strategies.20 14 The Investment and Development Agency of Latvia: www.liaa.gov.lv15 State owned JSC “Latvijas Attīstības Finanšu institūcija Altum” (Latvian development financial institution Altum): www.hipo.lv16 The association “CONNECT Latvija”: www.connectlatvia.lv17 “Creative Andrejsala”: www.csala.lv18 TechHub Riga: www.techhub.com19 The young Entrepreneurs Centre: www.juc.lv


The Latvia Technology Park is an association that organizes various sem-inars, consultancies, including on business optimization matters, as well as processes technology demand or supply using science network. Support is available for technical companies.21

Business incubators of higher education institutions offer for students of the University of Latvia, the Riga Technical University, the Riga International School of Economics and Business Administration and the Turiba University to develop and to realise their ideas subsidizing premises, training and providing mentoring for them.22

The Stockholm School of Economics in Riga Mentor Club, where mentors work individually with each interested enterprise, thus assessing its business activities, problems and potential opportunities for development, provide ad-vice and recommend specific actions for the development of their business. mentors are highly qualified professionals working in different sectors.23

The Innovation Centre of the University of Latvia aims to promote the in-volvement of the University of Latvia as an innovation partner in the develop-ment of knowledge based economy in Latvia, providing collaboration possibil-ities between researchers of the University and companies aimed at applying knowledge, technologies and research competencies, and also at commer-cialisation of individual research results.24

The Medical Engineering Innovation Centre of Riga Stradins University aims to support and to promote the development of innovative and knowl-edge-based businesses in Latvia in the area of the designing medical appli-ances and related industries, as well as to promote the commercialization of the research results carried out by Latvian scientists. The Centre offers to young entrepreneurs the expert advice on issues related to new product tech-nological development processes and the use of various specific equipment (digital oscilloscope, multimeter, a programmable power supply, etc.), as well as provides possibility to use office premises with modern office equipment.25

The Riga Innovation Incubator aims to promote the formation and devel-opment of new innovative businesses, by providing the necessary support for new business start-ups. The activities of the incubator are mainly focused on offering comprehensive solutions to new businesses to ensure that tech-nological developments and innovative ideas would gradually result in a final product with a high added value. The amount of support depending on the age of the company is up to 90 %.26

Latvian Chamber of Commerce and Industry is a voluntary, politically neutral association, which brings together micro, small, medium-sized and large en-20 The Latvian Technological Centre: www.innovation.lv21 The Latvia Technology Park: www.ltp.lv22 motivation Programme of Innovative Business of the Investment and Development Agency of Latvia. Innovation portal www.innovativelatvia.lv23 The SSE Riga mentor Club: www.mentoruklubs.lv24 The Innovation Centre of the University of Latvia: www.lu.lv25 The medical Engineering Innovation Centre of Riga Stradins University: www.rsu.lv26 The Riga Innovation Incubator: www.rtu.lv


terprises representing various economy sectors across Latvia. It works in three spheres: the business environment, competitiveness of companies and export.27

The association “Lidere” is an organization that brings together women of Latvia –entrepreneurs and professionals in their area. Its aim is to activate the mentoring movement in Latvia, to support emerging and existing female en-trepreneurs in the cities and in rural areas of Latvia, to increase the share of women who start up companies and create new job places, to provide freely accessible information and consulting opportunities.28

The business collaboration is promoted not only by above mentioned state and local institutions, but also by specially established associations, centres and federations with the aim to provide assistance for various types of matters, to represent interests of entrepreneurs, to make new contacts and cooperation. Active, knowledgeable and professional people who are interested in developing a specific industry in Riga and in the country as a whole are working in such insti-tutions; their main mission is to identify the real situation in the sector, as well as existing problems and circumstances hindering development, and to take all the necessary and available measures to prevent them, also to participate in political affairs defending interests of the industry enterprises. With their activities associ-ations contribute to the sustainable economic development of the country.

In Riga, there are dozens of different industries associations and majority of companies work in a respective business association that has knowledge of a specific area and assists in development of the particular enterprise and the industry as a whole.

The Latvian Business Development Centre is an association of companies that provides a comfortable platform for companies of Latvia where to organise cooperation, to communicate and to agree on common objectives to be at-tained, where to receive the necessary information for business development, to find cooperation partners for joint projects, as well as to receive professional expert advice in export, marketing, finance, human resource management and other areas. The Centre was formed aiming to provide support for strengthen-ing business environment and for raising competitiveness of local companies in the local market and abroad.29

The Association of Small and Medium Enterprises of Latvia was established with the aim to defend interests of micro, small and medium-sized enterprises in relation to insufficient support of different aid instruments particularly for existing successful companies, as well as, insufficient support for new compa-nies. One of the objectives of the Association is building a dialogue with rep-resentatives of various national institutions to defend the interests of SmEs.30

27 The Latvian Chamber of Commerce and Industry: www.chamber.lv28 The association “Lidere”: www.lidere.lv29 The Latvian Business Development Centre: www.luac.lv30 The Association of Small and medium Enterprises of Latvia: www.lmvasociacija.lv

3.6. OPPORTUNITIES FOR mUTUAL BUSINESS COOPERATION


The main activity directions of the Asso-ciation of Latvian Chemical and Pharmaceu-tical Industry is participation in elaboration of proposals for industry business development concept and strategy, in elaboration and im-provement of the industry legislation provid-ing position on state institutions developed legislative projects, as well as, representation of interests of members of the association in state and local institutions, and in relations with employees’ organizations (trade unions) and other legal and natural persons, and pro-motion of the Association and its members for raising their prestige in Latvia and abroad, participation in development of vocational education and training system of industry professionals, etc. members of the Associa-tion are leading and largest companies in the sector.31

The Baltic Association – Transport and Logistics was established to participate in development and adjustment of the transit policy in Latvia and in the European Union, to represent the interests of the industry in the political process and business interests in relations with state and local institutions, to create and to strengthen cooperation with institutions and organizations in countries where main shippers are operating, etc. The association represents common interests of transport and stevedore companies in busi-ness relations with the state, municipalities and their institutions, including the Freeport management, in order ultimately create a long-term transit industry development poli-cy in Latvia.

The Association of Electricians and Ener-gy Engineers of Latvia unites both legal and natural persons who work in the industry. The aim of the association is to unite its mem-bers in order to promote the comprehensive development of Latvian electrical power and energy engineering industry according to the latest world standards and common techni-cal policy, to ensure successful work of its members in labour market of electrical power and energy engineering industry and to pro-tect their material and moral interests and to promote the work of members of the Associ-ations and to raise its prestige.32

The Latvian Information and Communica-tions Technology Association brings together organisations and individual members who work in the industry. The Association repre-sents members’ interests both in the legisla-tive field, and actively responding to current events in Latvia, and serves as an industry representative on the international circuit. Its aim is to promote the development of the sector and to increase its competitiveness.33

The Latvian Traders’ Association brings together more than 600 companies whose main business is trade, catering and servic-es. Its mission is to promote the develop-ment of its members.34

The Latvian Electrical Engineering and Electronics Industry Association unites com-panies, research and educational institutions registered and operating in Latvia and relat-ed to industry of electronics and electrical engineering, optical equipment, information technologies and electronic communications equipment, defence equipment, aviation and space technologies, in order jointly define and defend their interests, as well as pro-mote industry consolidation, development and promotion.35

The Latvian Association of Light Industry Enterprises aims at promoting the develop-ment of industry companies facilitating their entering in new markets and participation in exhibitions, organising mutual cooperation, training for industry professionals, helping to establish contacts with entrepreneurs of oth-er countries, defending interests of industry companies in national and international insti-tutions, as well as in the Textiles Committee of the European Union, regularly analyzing changes in the textile and clothing export and import per product group and per country, as well as issuing permissions (licenses) to com-panies confirming that an exported product was produced in the Republic of Latvia.36

Latvian Forest Industry Federation aims to promote the development of the forest industry in Latvia, in cooperation with inter-ested entities, to build a sustainable, stable economic environment for development and

31 The Association of Latvian Chemical and Pharmaceutical Industry: www.lakifa.lv32 The Association of Electricians and Energy Engineers of Latvia: www.bleea.lv33 The Latvian Information and Communications Technology Association: www.likta.lv34 The Latvia Traders’ Association: www.lta.lv35 The Latvian Electrical Engineering and Electronics Industry Association: www.letera.lv

Nozaru asociācijas


competitiveness of forest industry companies and to ensure international representation of interests of Latvian forest industry, as well as development and coordination of activities of the Association.37

The Association of Mechanical Engineer-ing and Metalworking Industries of Latvia unites entrepreneurs, professionals of the in-dustry and other interested natural and legal persons to promote the development of the sector, to facilitate mutual cooperation and professional growth of industry experts.38

The Latvian Builders’ Association works to unite construction professionals for suc-cessful and sustainable development of the construction industry in Latvia and also abroad. An aim of the Association is to con-solidate and to protect interests of its mem-bers in labour market of the construction in-dustry, in economic matters and in relations between employers and employees, as well as in relations with customers. Tasks of the Association include active participation in elaboration of proposals for industry devel-opment concepts and strategies, in devel-opment of vocational education system of industry experts, as well as in the preparation and development of industry legislation.39

The Association of Hotels and Restau-rants of Latvia is an association that brings together accommodation and catering com-panies for professional collaboration. A mis-sion of the association is to improve the qual-ity of customer services, to improve Latvian hotel and restaurant market and to represent the Latvian hotel and restaurant business globally.40

The Association of Latvian Travel Agents and Operators is a professional public organ-ization that brings together tourism agents and operators in order on the basis of equal-ity within the laws and the statutes of the As-sociation to form a common governing body that would coordinate travel agents and op-erators, defend their interests and represent Latvian tourism business globally.41

The Latvian Federation of Food Compa-nies unites food companies and professional associations, represents manufacturers in national and non-governmental organisa-tions, and defends interests of members in elaboration of the nation and international normative acts, as well as provides informa-tive support for members of the Federation. The Federation unites companies which take up to more than 60 % of all Latvian food mar-ket. It is represented by industry associations and several dozens of large, medium and small companies. The aim of the Federation is successful and sustainable development of food processing industry in Latvia and high competitiveness of Latvian food manufactur-ers’ in foreign markets.42

The Association of Latvian Printing Com-panies brings together 46 legal persons whose business is related to the printing in-dustry: the production of printed products, trade of printing equipment and materials, in-dustry vocational and continuing education. An aim of the Association is to represent the common interests of members of the Asso-ciation, to promote development of printing industry in Latvia, to create a favourable public opinion about printing industry, and to promote the printing industry education in the country.43

36 The Latvian Association of Light Industry Enterprises: www.atci.lv37 The Latvian Forest Industry Federation: www.latvianwood.lv38 The Association of mechanical Engineering and metalworking Industries of Latvia: www. masoc.lv39 The Latvian Builders’ Association: www.latvijas-buvnieku-asociacija.lv40 The Association of Hotels and Restaurants of Latvia: www.lvra.lv41 The Association of Latvian Travel Agents and Operators: www.alta.net.lv42 The Latvian Federation of Food Companies: www.lpuf.lv43 The Association of Latvian Printing Companies: www.lpua.lv


3.7. INTERNATIONAL COOPERATION OPPORTUNITIES

Latvia is a country with a high human development index and is rather developed country at global level, as well as is a rightful member state of eco-nomic and political international organizations. Responsible representatives of the state actively participate in various decision preparation and decision ma-king processes, including processes related to entrepreneurship, investments and innovations. Latvia is a member state of 15 international organizations.

The Republic of Latvia has 44 diplomatic and consular representations: 35 embassies, 6 permanent representations, 1 consulate general and 2 consula-tes. In 2014 Latvia has 168 honorary consuls and 16 honorary consuls general in foreign countries.

In Riga there are branches, representative offices and headquarters of se-veral world organizations:

● The European Commission Representation, that is a part of the Directora-te-general for Communication of the European Commission;

● The European Parliament Information Office;● The Body of European Regulators for Electronic Communications (BEREC);● The Nordic Council ministers’ Office;● The International Organization for migration;● The United Nations House, which is also a home for representations of the

International Organization for migration and the World Health Organization;● The European Investment Fund;● Culture centres and institutes of several countries.

In addition, the Riga municipality is a collaborative partner and also regularly participates in the following international organizations and institutions:

● Baltijas The Baltic metropolises Network (Baltmet);● The Union of the Baltic Cities (UBC);● The European Edge Cities Network (Eurocities);● The Network of European metropolitan Regions and Area (mETREX);● The European Committee on Local and Regional Democracy (CDLR);● The Congress of Local and Regional Authorities of the Council of Europe

(CLRAE);● The association on sustainable local energy policy promotion of European

cities (Energy-Cities);● The European city network “Cities for Children”;● The Union of Capitals of the European Union (UCEU);● The Committee of the Regions of the European Union (CoR);● The United Nations Educational, Scientific and Cultural Organization

(UNESCO);44 The ministry of Foreign Affairs of the Republic of Latvia. Embassies and representations. Available: www.mfa.gov.lv


● The European Association for Hydrogen and fuel cells and Electro-mobility in European Regions (HyER)

● modern Alliance of Hanseatic cities (Städtebund DIE HANSE).● The European peoples’ culture and art festival Europeade;● International Council for Local Environment Initiatives (ICLEI);● The Organization of World Heritage Cities (OWHC) and other organisations.

In 2013 the Foreign Affairs Office of the Riga City Council coordinated and organized 170 foreign mission visits of Riga City Council officials and employe-es and ensured 33 receptions of foreign delegations and groups in the Riga City Council, as well as provided support for events of different types and importance in Kobe, moscow, Beijing, Berlin, yerevan, minsk, Norrkoping, Aal-borg, Tbilisi, Pori, Rostock, St.Petersburg, Bordeaux, Suzhou, Tallinn, vilnius and in other cities – it generally promotes new networking and cooperation opportunities for entrepreneurs.45

The Nordic Council of ministers (NCm) is a part of the Secretariat of the Nordic Council of ministers in Copenhagen, whose mission is to promote co-operation between Nordic countries and Latvia. NCm Office in Latvia closely cooperates with national and non-governmental institutions and the Nordic diplomatic missions, in order to implement the common Nordic initiatives. NCm Office in Latvia promotes and implements projects related to the Nordic countries, and perform a wide range of Nordic and Baltic cooperation. The Office also serves as the administrator of projects, including the Nordic and EU projects or joint Nordic-Baltic projects and is responsible for practical work, and quality assurance.46

In the first half of 2015 Riga will be the national capital city of the Latvian Pre-sidency of the Council of the European Union. Latvia overtakes the Presidency from Italy and will pass it to Luxembourg. The Presidency will turn increased attention to Latvia and Riga. It is envisaged that in 2015 25 000 visitors from all over the world, including approximately 700 international journalists, will visit Riga. During the Presidency around 200 events of different levels (including, the Eastern Partnership Business Forum, the Fifth meeting of ministers of Ed-ucation, etc.) will be organized in Latvia and Riga, whereas around 1 500 me-etings will be organized in Brussels and Luxembourg. The main venue for the events will be the National Library of Latvia that also corresponds to one of the themes of the Presidency for promoting opportunities of information society and digital technologies for future development of the EU. The Presidency will give new opportunities for Latvian entrepreneurs to build business contacts, to attract investments, as well as to advertise their goods and services.47

45 Riga municipality Annual Report 2013.46 The Nordic Council of ministers: www.norden.lv47 The Secretariat of the Latvian Presidency of the Council of the European Union: www.es2015.lv


The largest companies of different countries and representing industries that have made considerable investments in Latvia are united in the non-govern-mental organization – the Foreign Investors’ Council (FICIL). Apart companies, the council members are also representatives from nine national chambers of commerce in Latvia. The FICIL is currently represented by 22 companies whose direct investments in core capital of enterprises registered in Latvia is amounted approximately 40 % of total foreign direct investments in Latvia. An aim of the council is to promote the Latvian business environment and to facilitate foreign investments in Latvia.48

The Investment and Development Agency of Latvia (LIAA) not only coope-rates with state and municipal authorities favouring the development of entre-preneurship in the domestic market, but also is active in foreign marketing and in European business support network events. As its main task LIAA considers raising competitiveness of Latvian enterprises that is especially relevant since accession of Latvia in the European Union and integration within European common market. The agency disseminates information abroad about Latvian economy, industries, companies, projects, products, and services, organizes visits of enterprises abroad during visits of senior officials, business days, tra-de missions and business contact exchange, as well as ensures search of potential cooperation partners abroad, establishes contacts and arranges bu-siness visits of potential partners and investors.49

Already now Riga is considered as a major cross point between the West and the East, as not only local and national level, but also international level bu-siness events of different sectors and types are organised here. In perspective centralized offices of various institutions operating at the European Union, the Baltic States, and the Nordic and Russian markets could be located in the city.

48 The Foreign Investors’ Council in Latvia: www.ficil.lv49 The Investment and Development Agency of Latvia: www.liaa.gov.lv


USEFUL INFORmATION

government institutionswww.am.gov.lv The ministry of Foreign Affairs of the Republic of Latviawww.em.gov.lv The ministry of Economics of the Republic of Latviawww.liaa.gov.lv The Latvian Investment and Development Agencywww.ur.gov.lv The Register of Enterprises of the Republic of Latviawww.varam.gov.lv The ministry of Environmental Protection and Regional Development of the Republic of Latviawww.vid.gov.lv The State Revenue Service of the Republic of Latvia

Institutions of the Riga municipalitywww.riga.lv The Riga municipalitywww.rdpad.lv The Riga City Council City Development Departmentwww.investinriga.com The Riga City Council City Development Departmentwww.rpbv.lv The Riga City Building Authoritywww.liveriga.lv The Riga Tourism Development Bureau

Industry associationswww.chamber.lv The Latvian Chamber of Commerce and Industrywww. masoc.lv The Association of mechanical Engineering and metalworking Industries of Latviawww.alta.net.lv The Association of Latvian Travel Agents and Operatorswww.atci.lv The Latvian Association of Light Industry Enterpriseswww.bleea.lv The Association of Electricians and Energy Engineers of Latviawww.ficil.lv Foreign Investors’ Councilwww.lakifa.lv The Association of Latvian Chemical and Pharmaceutical Industrywww.latvianwood.lv The Latvian Forest Industry Federationwww.latvijas-buvnieku-asociacija.lv The Latvian Builders’ Associationwww.letera.lv The Latvian Electrical Engineering and Electronics Industry Associationwww.lidere.lv The association “Lidere”www.likta.lv The Latvian Information and Communications Technology Associationwww.lmvasociacija.lv The Association of Small and medium Enterprises of Latviawww.lpua.lv The Association of Latvian Printing Companieswww.lpuf.lv The Latvian Federation of Food Companieswww.lta.lv The Latvian Traders Associationwww.luac.lv The Latvian Business Development Centre


Amatu street 4, Riga, Lv-1050, LatviaTelephone: +371 [email protected]

@rdpad

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Riga City CounCil City Development DepaRtment

the economic profile of riga 2015 - liaa proi o riga 2015 3 riga – unique city of opportunities...

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