Latvia Market Entry

Latvia Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Commercial law applies in Latvia, which corresponds to EU regulations.

The main channel for sales are wholesale companies, retail chains and department stores, which have been increasing rapidly in recent years, especially in Riga and other larger cities. The use of local representatives is one of the most effective ways to success, which is also confirmed by the experience of Czech companies operating on the Latvian market. A local representative, unlike a foreign entrepreneur, knows the local environment well. In addition, it often has contacts in the countries of the region, which can be an advantage given that Latvia is a relatively small market and connections to other regional consumption chains are logical. However, caution should be exercised when selecting a local representative and not be hasty in granting exclusive representation before thoroughly examining the local market. It is also necessary to maintain active contact with the representative and monitor his business results.

Customs and foreign exchange regulations

According to cheeroutdoor.com, Latvia is part of the Schengen area and therefore there are no border controls. However, the border police operate in the border zone and can check any passing vehicle. There is cooperation between the police authorities and it is possible for the national police to operate in the territory of another Schengen country.

Due to the membership of the Czech Republic and Latvia in the EU, the import of all goods is unlimited, the border police only reserves the right to check anyone entering the country if there is reasonable suspicion of smuggling weapons, drugs or dangerous materials. Restrictions on the export of alcohol and cigarettes remain in place. Cash in excess of EUR 10,000 may not be carried across the border. When transporting animals from another EU member state, it is necessary to have a European pet passport for each animal. Weapons, ammunition, explosives and chemicals, narcotics and psychotropic substances, pornographic materials and pure alcohol may not be imported into Latvia without a permit.

For more details, see: Ministry of Foreign Affairs of the Czech Republic – Travel information

Forms and conditions of operation on the market

Starting a new company is not a problem from a legal point of view. This action can be assigned to specialized law firms or it is possible to use the services and information of the Chamber of Commerce and the Latvian Development Agency LIAA.

Every company (branch and representative office) doing business in Latvia must be registered in the Register of Companies, the activity of unregistered companies is prohibited. To start the registration, it is necessary to pay the registration fee. Only after registration does the company have full legal power and status. Officially, a response to a registration request must be provided within 30 days of the request being submitted, but in practice, the normal processing time is 14 days. If the company does not receive a negative response within 30 days, it can consider itself registered. In case of refusal, it is possible to appeal to the court.

The most common type of company is a limited liability company. The second most frequently registered form of business is a trade license.

Due to the very simple tax law in Latvia, many bureaucratic obstacles are eliminated and even investments with relatively low capitalization can be profitable. In order to establish a company in Latvia, the following primary prerequisites must be met: address of the company in Latvia; the head of the office – an EU citizen, but must have a residence address in Latvia; an international tax number must be assigned at the tax office. The company can also have a 100% share of foreign capital.

In order to register a limited liability company, it is necessary to submit a number of documents – we recommend working with a local legal representative. Note: All foreign documents must be notarized and legalized by an apostille issued by the Ministry of Foreign Affairs of the Czech Republic (not the ZÚ). Documents must be in the Latvian language or with a certified translation.

Other forms of registered companies:

  • permanent establishment serving commercial purposes;
  • permanent representation for non-commercial purposes.

Marketing and communication

Advertisements on television and radio, advertisements in the daily and professional press, on the Internet, as well as the use of billboards and advertising spaces are a proven form of promotion. A suitable form of promotion is participation in local fairs and exhibitions (e.g. the largest Riga Food, Tech-Industry fairs, workshops and conferences, or seminars organized by ZÚ or ZK PaulTrade). It is also possible and profitable to enter the market together within a group of companies presenting a comprehensive offer – within the framework of so-called alliances. When penetrating the market, it is recommended to use the market experience of companies already operating and the comprehensive services of advertising and promotion agencies, which are already sufficient on the Latvian advertising market.

You can also use the paid services of ZK PaulTrade.

Upon agreement with the ZÚ, it is also possible to mediate advertising during events presenting Czech culture. The use of official periodicals of the Latvian Investment and Development Agency (LIAA) and the Latvian Chamber of Commerce and Industry and periodicals of some other institutions can also serve as basic promotion.

Some companies, especially start-ups or companies aimed at young generations, successfully present themselves on social networks (Facebook, Twitter, Instagram and others). These platforms, especially if they are active, can also be certain references with great reach.

Issues of intellectual property protection

This area is regulated by a number of laws. Following Latvia’s accession to the EU, the legislation adopted European standards for the protection of intellectual property. It is based on the Copyright Act, which was approved by the Latvian Parliament in April 2000 and entered into force in May 2000.

Other legislative acts in this area are the Law on Trademarks and the Law on Industrial Patents. In addition, in Latvia there are so-called secondary rights – the rights of performers, producers of sound recordings (phonograms) and films, and the rights of broadcasting organizations.

Since 2006, the Council for Intellectual (Mental) Property has been in operation, whose task is to create strategy and policy in the field of intellectual property in Latvia, develop plans, make recommendations and protect intellectual property rights. Council meetings are chaired by the Prime Minister; the members of the Council are also the ministers of justice, culture, agriculture, economy, education and science, interior, finance; and the Attorney General and the representative of higher education. Council meetings are held at least twice a year. To ensure an ongoing agenda, a Council secretariat was established and a group of permanent experts composed of representatives of state institutions and non-governmental organizations was created, the group’s task is to discuss problems related to the field of intellectual property. Cases of infringement of intellectual property rights are resolved on the basis of inter-institutional agreements.

Although legal protection of rights is ensured, in practice there are a number of problems. Quite often legal boundaries are crossed in this area (e.g. copying of CDs, films, textiles, toys, etc.). Since Latvia is a transit country, counterfeits from China, Russia and other countries enter the country.

Public procurement market

The public procurement market in Latvia is regulated by the Public Procurement Act. Public procurement is covered by the Public Procurement Office (Iepirkumu Uzraudzíbas Birojs)

Contracts are mainly reported in the daily press, they are regularly published in the official Latvian newspaper Latvijas Véstnesis and printed in the Official journal of the European Union (the official periodical of the EU).

All tenders are also published on the Internet at the following addresses:

  • Procurement Agency – http://www.iub.gov.lv/
  • Electronic Iepirkumu Sistema – https://www.eis.gov.lv/ – overview and conditions of public procurement
  • International Journal of EU – http://ted.europa.eu/
  • Ministry of the Environment – ​​http://www.vidm.gov.lv/

International banks (IBRD, EBRD), IMF, or EU support programs (Cohesion Fund, etc.) are often involved in the financing of tenders.

The experience of Czech business entities so far shows that it is possible to win a tender independently (Škoda Electric, Škoda Vagonka), in other cases it is more advantageous to participate through representation (CBR company); however, it is also recommended to contact a Latvian partner , who has an advantage when preparing the tender – he has better and “correct” contacts and knows better local conditions and customs (environmental tenders, ecological buses) and especially has the advantage of language skills due to, that most orders are listed in Latvian.

Payment terms, payment ethics and resolution of commercial disputes

In addition to the Constitution (Satversme), the basic business standards in Latvia are primarily the Commercial Code, the Civil Code and EU standards.

Since April 2021, a special Court for Economic Affairs has been established in Latvia, which deals with cases related to commercial disputes as well as crimes with an economic dimension. Disputes can also be resolved at the arbitration court of the Latvian Chamber of Commerce and Industry, or contact a specialized law firm. Negotiations with the authorities and dealing with relevant matters are sometimes lengthy. If entities from third countries are not involved in the dispute, it is possible to attempt an out-of-court settlement within the EU SOLVIT system in the first stage.

The conditions on the local market basically fully correspond to the legal environment of the EU, the weak points are the labor law and corruption, which, together with the “gray” (shadow) economy, is one of the negative accompanying phenomena of the Latvian business environment. Specific cases in Latvia are being investigated by the Office for Combating Corruption – KNAB.

In general, the conditions in Latvia are similar to those in the Czech Republic. The problems stem primarily from the fact that Latvia is a relatively young transforming market economy. These include insufficient financial resources, an increased need for investments, a not always clear situation due to rapid development and changes in legislation, manifestations of bureaucracy, etc. The Latvian government is making efforts to eliminate these phenomena.

Visas, fees, specific conditions for traveling to the territory

Citizens of the Czech Republic must have a valid identity document to travel to Latvia – a passport (travel, business, diplomatic) or a valid identity card. A child under the age of 15 must always have their own document. When traveling by motor vehicle, it is necessary to have a small technical vehicle license, a driver’s license (it does not have to be international, a Czech driver’s license is also valid) and proof of payment of the liability insurance. When traveling in a company vehicle, it is necessary to have a verified confirmation that the company agrees that the vehicle in question will be used by the specified person to travel to Latvia. A similar confirmation is also required if the vehicle belongs to a different owner than the one who will use it to travel to Latvia. An international vaccination card is not necessary to travel to Latvia.

The current conditions for traveling to Latvia (especially with regard to COVID-19 or specific adjustments for crossing the external borders to Russia and Belarus) can be found on the website of the Riga Office

A citizen of an EU member state can travel to Latvia according to the valid rules of free movement of persons within the EU. A citizen of the Czech Republic has the right to apply for a temporary residence permit of an EU citizen, which is granted by the Immigration Office (exceptions apply to seasonal workers, employees in Latvia who live in another EU country, and also to those interested in employment in Latvia who without a temporary residence permit they can search for 6 months). Processing a temporary residence permit should be a formal matter, this process should take no more than 1 month. In order to issue a temporary residence permit, a citizen should have a confirmation of the new residence address registered with the relevant authority, valid long-term health insurance (mandatory by law or commercial insurance abroad) and proof of income.

The security situation in general is to some extent similar to that in the Czech Republic. In Riga, in addition to the robbery of apartments, cases of robberies are registered; the crime rate is generally higher than in the Czech Republic. Foreigners in particular become popular victims due to their lack of knowledge of local conditions and the language barrier when communicating with local authorities. You can find more information on the website of the Ministry of Foreign Affairs of the Czech Republic – Latvia – travel

Employment of citizens from the Czech Republic

Citizens of EU member states have almost no restrictions on entering, staying and working in Latvia.

Citizens of EU member states who want to stay in Latvia continuously for more than three months should register at the Office for Citizenship and Migration and apply for a registration certificate; this registration is not required for a period of 6 months if a citizen of an EU member state resides in Latvia with the aim of finding employment. More detailed information on the conditions of employment for citizens of EU member states in English can be obtained on the website of the Office for Citizenship and Migration – Ārvalstnieku nodarbināšas juridiko produktu apraksts

Conditions for the use of local health care by Czech and EU citizens

In general, first aid is provided free of charge both to citizens of Latvia and to foreigners, other health care is subject to payment. Despite the existence of the European Health Insurance Card, it is recommended to take out commercial health insurance for trips abroad, with the provision that Czech citizens pay the amount for treatment in cash in Latvia and bill it back to their health insurance company in the Czech Republic. Long-term residents of the Czech Republic are recommended to register in the health care system in Latvia using the S1 form (information will be provided by the relevant health insurance company in the Czech Republic). A foreigner employed in Latvia (i.e. not a tourist) can register with a local general practitioner (family) doctor. Before that, it is recommended to find out whether the doctor is connected to the health insurance network or whether direct payment is required for the services provided.

In case of longer stays in nature (or during agrotourism), vaccination against tick-borne encephalitis is recommended – the incidence of infected ticks in Latvia is among the highest in Europe.

Medicines and other medical aids can be purchased in pharmacies (Aptieka), supermarkets and drugstores also offer a limited assortment.

MFA of the Czech Republic – travel to Latvia

Fairs and events

The company will increase its prestige and credibility by participating in local industry exhibitions and fairs, where it will best present its brand on the market. The largest fairs are, for example, Riga Food, Tech-Industry or Furniture & Design Isle, as well as presentations organized by the Embassy of the Czech Republic or ZK PaulTrade.

The Embassy of the Czech Republic tries to support Czech companies by personally participating in trade fairs and at presentation and other events organized as part of PROPED economic diplomacy projects. The support of the embassy can be an important element in Latvia, especially if the Czech company’s negotiations with Latvian partners concern an important contract. When dealing with state authorities, state or large enterprises, the presence of an ambassador or an economic diplomat is possible.

A number of events are also organized by the Foreign Office of PaulTrade Pobaltí, which has its office in the embassy building in Riga.

Latvia Market Entry