The U.S. Department of State reports on Latvia's progress in combating money laundering, work on encouraging foreign direct investment as well as on the improvement of the country’s business climate. The report emphasizes Latvia's GDP growth in 2022 by 2 percent and the country's positive location by providing strategic access to both the EU market and to Central Asia. According to the report, the most significant challenges investors encounter in Latvia are a shortage of available workforce, demography, quality of education, and a significant shadow economy. 

The report outlines that labor costs in Latvia are the fourth-lowest in the EU. Latvia ranked second in the OECD’s 2022 International Tax Competitiveness Index Rankings. To further boost its competitiveness, the Latvian government has abolished taxes on reinvested profits and has established special incentives for foreign and domestic investment. There are five special economic zones (SEZs) in Latvia: Riga Free Port, Ventspils Free Port, Liepaja Special Economic Zone, Rezekne Special Economic Zone, and Latgale Special Economic Zone, which provide various tax benefits for investors. The Latgale Special Economic Zone covers a large part of Latgale, which is the most economically challenged region in Latvia, bordering Russia and Belarus.

Find the full assessment HERE