The economy of Latvia is a free market economy, it is regulated by appropriate laws, protecting commercial rights, trademarks and investments;<br style="color: rgb(51, 51, 51); font-family: sans-serif, Arial, Verdana, "Trebuchet MS"; font-size: 13px; background-color: rgb(255, 255, 255);" />The requirements of the European Union are included in laws of Latvia;
There were approximately 104,000 enterprises in Lithuania in early 2017. <br style="color: rgb(51, 51, 51); font-family: sans-serif, Arial, Verdana, "Trebuchet MS"; font-size: 13px; background-color: rgb(255, 255, 255);" />Every year, the government of Lithuania strives to improve the country’s business environment; as a result, Lithuania regularly moves up in international ratings.
Companies selling food and beverages make up 50% of the trade industry (1,382 companies with total turnover of EUR 5.21 billion), followed by companies selling household goods, DIY and home improvement companies – 22% (725 companies, turnover of EUR 2.27 billion), companies selling office supplies – 10% (413 companies, turnover of EUR 1.06 billion), clothing and footwear retailers – 5% (394 companies, turnover of EUR 523 million), online stores – 4.8% (267 companies, turnover of EUR 364 million).
The main branches of Latvia’s industrial production are mechanical engineering and metalworking (45%), chemical industry (17%), light industry (19%), electrical engineering (9.9%), printing and publishing (8%), scientific research and production (1.8%).There are 1,261 companies with annual turnover of more than EUR 145,000, their aggregate turnover is EUR 2.81 billion, aggregate profit – EUR 99 million, and the total number of employees – 34,000.
The Lithuanian tax system is basically made up of direct and indirect taxes, and they have basically not changed in the past years. Lithuania’s main tax types are personal income tax, corporate tax, value added (VAT), excise tax, property tax, land tax, as well as tax on gambling and lotteries.
In the International Tax Competitiveness Index, the Estonian tax system has been ranked the most competitive in the world for the past couple years. The Estonian government also points out that the country’s tax system is sustainable and socially and regionally balanced.
In the first ten months of 2016, the number of transactions on the Baltic real estate market rose by 6% against the respective period a year before. Given the acquisition and merger (A&M) trends in the Baltics over the past three years, the year of 2016 was closed with a comparatively high number of M&A transactions on the whole, the authors of Prudentia M&A Folio report have concluded.
In 2016, Latvia exported EUR 10.332 billion worth of goods to foreign countries, down 0.3% or EUR 30.9 million from 2015, while imports dropped 1.7% or EUR 212.9 million to EUR 12.279 billion. For exporters, last year was full of challenges, considering falling prices for raw materials, the decline of the Russian ruble and the British pound sterling as well as reduction of exports in certain categories of goods related to re-export.
Investors from 135 countries made investments in Latvian companies last year. At the end of 2016, there were 29,273 companies registered in Latvia that were fully or partly owned by foreigners. Altogether 29,692 foreigners hold shares in Latvian companies.
Shortly after the economic crisis, exports started to grow at a fast rate and became a driving force of Latvia’s economic growth, but the growth subsided soon and even turned into a slight decrease in 2016. On the whole, last year was negative for Latvia’s foreign trade as export volumes decreased by 0.3% and import volumes contracted a bit more, by 1.7%. Economists were fairly optimistic about prospects for Latvia’s foreign trade growth last year, but this year there are objective conditions for improving these results.
Estonia, seen as an excellent example of a balanced economy, has been stagnating the past several years. Last year was no different, as economic growth was projected at over 2%, but in reality was below 2%. Despite the slow growth, Estonia remains an attractive country, which has been noticed by the World Bank in its annual Doing Business 2017 ranking, as it has jumped up to 12th place amongst 189 countries around the world.
The number of employed persons in Latvia was 895,000 or 61.8% of the population aged 15-74 years in the third quarter of 2016The registered unemployment level was at 9.5% of the economically active population in the third quarter of 2016Unemployment in 2020 is planned at 8.2% (the Finance Ministry projects)
Over the past several years the unemployment level in Lithuania has seen a sharp decline that slowed down in 2015 but picked up the pace again in 2016.
Shortly after the economic crisis, exports started to grow at a fast rate and became a driving force of Latvia’s economic growth, but the growth subsided soon and even turned into a slight decrease in 2016
2016 was not the most successful year for Latvia’s economy, mostly due to uncertainty in external markets. Even though at the beginning of the year Latvia’s growth figures were projected at around 3%, in reality Latvia’s GDP increased by only 1.6% last year.
Latvia has achieved remarkable economic progress in dealing with the impact of the global financial crisis. Macroeconomic disproportions have been significantly reduced, Latvia’s current account deficit and public finances are stable, and its government debt is among the lowest in the European Union (EU).
Latvia continues to strengthen its position as a transit and logistics centre among EU, CIS and Asian markets, developing existing transit corridors and launching work on new projects.
After three years of decline, stable growth was observed in the industry at the end of 2011 and at the beginning of 2012.
Foreign direct investment in equity, reinvested earnings and other forms of capital has grown rapidly since Latvia regained its independence in 1991 until the rates of growth slowed because of the financial crisis. However, in the first nine months of 2011, the volume of foreign direct investment was almost three times higher than the total foreign direct investments in all of 2010. The lion’s share came from Russia and the CIS, facilitated by changes in the Law on Immigration, which allowed for
Latvia has set ambitious goals: in two years, it will be among the most competitive countries in the world with a favorable business environment and competitive taxes on labor in the Baltic region.
In the guidelines for Lithuania’s economic development, no branch of industry has been given special priority, however, a strategic decision was taken to promote innovation, investment in modern technologies and industries that create high added value.
The level of unemployment and its structure
Lithuania is a country that is an example of the successful foreign direct investment attraction according to the annual review Global FDI Outlook Report 2011 by the European Bank for Reconstruction and Development prepared in cooperation with the FDI Intelligence of The Financial Times.
The tax system of Latvia is not the simplest one, however, it cannot be considered as very complicated in comparison to the old EU Member States. Problems hitherto have been created by protracted changeability in the tax system, which the government has promised not to allow in the.