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Latvia
is one of the three Baltic States, the others
being Estonia (to the north) and Lithuania (to
the south). Latvia has 531 km of coastline with
the Baltic Sea and a total land area of 64,589
sq km. The population is about 2.23m. Latvian
is the official language; Russian, German and
English are widely spoken.
The
President is elected for a four-year term by the
Saeima, Latvia’s parliament; the current
President is Valdis Zatlers, who was elected on
May 31, 2007.
Like
most of the ex-USSR countries, Latvia has had
to cope with the privatisation of most of its economy.
However, Latvia’s geographical location
has helped it remain a key transit point for north-south
and east-west trade flows between the USA, the
EU, the Far East, Russia and the CIS, making
the transit sector one of Latvia’s main
industrial sectors. The country joined the WTO
in 1999, and the EU in 2004.
GDP
per head is USD16,300 (2009). GDP growth was 12.2%
in 2006 and 10.3% in 2007, but fell by 4.6% in
2008. The currency is the Lat (LVL); the Latvian
central bank expects Latvia to adopt the Euro
in 2014 at the earliest. Real estate in Latvia
has suffered greatly from the global recession,
with prices falling 75% since 2007.
Latvia
has three main, ice-free ports – Riga, Liepaja
and Ventspils – and an extensive rail network
connecting Latvia with Russia, the CIS, the neighbouring
Baltic States and Poland. Telecommunications are
good, with a fibre optic network connected to
Scandinavia and Western Europe. There is a growing
and competitive mobile phone network.
Businesses
benefit from a flat 15% corporate income tax on
profits and capital gains, while income from dividends
paid by Latvian, EU and EEA member state entities
are tax exempt. Businesses operating in the Liepaja
or Rezekne Special Economic Zones, or in the Riga
or Ventspils Free Ports, can qualify for tax rebates
of 80%-100%.
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13/07 
