Latvia: Country and Foreign Investment
Latvia’s strength is as a key transit point for north-south and east-west trade flows. 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; 90% of turnover in Latvian ports, and 75% of rail cargo, is cargo in transit. 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%.
Telecommunications are good, with a fibre optic network connected to Scandinavia and Western Europe. There is a growing and competitive mobile phone network.
Real estate in Latvia has suffered greatly from the global recession, with prices falling 75% since 2007. In September 2009, the average cost of one square metre of real estate in the secondary market in Riga was EUR455; for business class apartments in the old part of the city, this rises to EUR1,500-2,000 per square metre, and EUR800 for new buildings. While 2010 has seen an upturn in real estate prices, they are still 63.5% lower than in the boom.
The Latvian banking sector is strongly integrated into the European banking system. The central bank is the National Bank of Latvia, which was founded in 1922; there are a number of national banks, including Parex Bank, Rietumu Banka and SEB Unibanka, and a number of foreign bank branches.