The Economic Profile of Riga 2015
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The
Economic
Profile
of Riga
2015
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The Economic Profile of Riga 2015
RIGA
Riga was founded in 1201. Overlooking several different historical
events, Riga has always been one of the most recognisable places
of commerce, culture and tourism in Europe. Starting from the 13th
century, when Riga joined the Hanseatic League, in the city evolved
commerce, making Riga one of the main intermediates between the
West and the East. Until the First World War Riga was one of the
main Russian Empire’s port cities, as well as, essential railway transport junction. Despite war damages, Riga was able to hold strong
and in 1920 the city’s development was resumed as the capital city
of the Republic of Latvia.1
At the moment Riga has 30 sister cities in five continents; and it is
an essential foothold for the development of different areas. In addition, Riga, as a city and as one of the country’s recognisable objects,
regularly participates in different kinds of international projects and
activities; for example, in the Union of the Baltic Cities (UBC), in the
network of Europe’s largest cities EUROCITIES and others, whose
aim is to promote interethnic development for sustainable, competitive and territorially united region of the Baltic Sea.
In the first half of 2015 Riga will be the capital city of the Latvian
Presidency of the Council of the European Union.
Coordinates:
56°56′51″N 24°6′23″E
Status of the city:
Since 1201
Area:
304 km2
Population (1 July 2014):
701 977 (2014. gada 1. jūlijs)
Population density:
2 117 per km2
National currency:
Euro (EUR)
Time zone:
GMT+2
Municipal portal of Riga:
www.riga.lv; www.investinriga.com
1 Portal letonika.lv section Riga
The Economic Profile of Riga 2015
The
Economic
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of Riga
2015
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The Economic Profile of Riga 2015
Riga – the city with
ambitious targets
Despite the global economic situation and experienced financial difficulties
of Latvia, already four years Riga has economic growth and competitiveness
development.
In 2014 Riga has won the Smart City title in the contest organized by the
magazine The New Economy, which proves that Riga is a city of the future –
we think and do things in the long term. Besides, in 2014 Riga has become
Europe’s capital city of free wireless Internet.
Credit rating agency Moody's Investors Service gave a positive assessment
on activities of the Riga municipality in the financial sector and increased the
future forecast of the city’s credit rating from stable to positive. In the assessment of the agency, such factors as sufficient liquidity of financial resources,
financial reserves, and ability to ensure covering liabilities in the coming years
are mentioned as the city’s financial sector positive factors.
In FDI Magazine annual study “European Cities and Regions of the Future
2014/2015”, Riga is ranked in the first place as “the best European city based
on cost effectiveness”.
In 2014 Riga honourably carries a title of the European Capital of Culture
revealing to citizens and guests of the city an extensive programme of cultural
activities with various world class events.
Riga has always been and will be a venue for significant international events.
We are proud that in the first half of year 2015 Riga is the national capital city of
the Latvian Presidency of the Council of the European Union, where strategic
discussions take place and decisions fundamental for the European Union are
made. The Presidency turn increased attention to Latvia and Riga.
I would like to invite you to explore Riga – the city of inspiration!
Nils Ušakovs
Chairman of the Riga City Council
The Economic Profile of Riga 2015
Riga – unique city of
opportunities for
everyone
The Riga municipality has brought forward a great challenge for the city – to
become the region’s leader in business and in attracting investments, while
maintaining high quality standards of life and recreational environment.
To become an interesting cooperation partner for many countries around
the world and international companies, Riga has defined economic sectors
whose development is receiving increased attention. The municipality is also
working on ensuring the necessary informative and consultative support for
entrepreneurs, on facilitating cooperation between science and business, and
also on developing infrastructure for business start-ups and investment attraction.
In 2014 the Riga City Council has approved the Sustainable Development
Strategy of Riga until 2030 enabling everyone to discover city’s development
perspective, and to look and to find new impulses for business promotion to
jointly build Riga as the Northern Europe metropolis.
We believe that Riga is a unique city of opportunities for entrepreneurs, as
well as for foreign visitors and citizens! Look and you will surely find your opportunities in this city!
Dzintars Balodis
Acting director of the City Development Department
of the Riga City Council
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The Economic Profile of Riga 2015
Table of contents
1. 1. Outline of the Urban Environment........................................... 5
1.1. General Information......................................................................... 5
1.1.1. Geographic Location........................................................... 5
1.1.2. Climate................................................................................ 6
1.1.3. Natural Landscapes and Green Area................................... 6
1.1.4. Water Bodies....................................................................... 6
1.2. Population....................................................................................... 7
1.2.1. Population of Riga............................................................... 7
1.2.2. Ethnic Groups..................................................................... 8
1.2.3. Education............................................................................ 8
1.2.4. Culture................................................................................ 9
1.3. Infrastructure.................................................................................. 10
1.3.1. Residential Infrastructure.................................................... 10
1.3.2. Transport Infrastructure....................................................... 12
1.3.3. Engineering Infrastructure................................................... 16
1.3.4. Information and Communication Technology Infrastructure... 18
2. Economic Competitiveness of Riga............................................... 21
2.1. Key Economic Indicators................................................................ 21
2.2. Economic Activity of Population..................................................... 23
2.3. Sectorial Structure of the Economy and Priority Sectors................. 24
2.4. Transport and Logistics.................................................................. 27
2.4.1. Freeport of Riga.................................................................. 27
2.4.2. Riga International Airport.................................................... 31
2.4.3. Latvian Railway................................................................... 33
2.4.4. Road freight transport......................................................... 35
2.5. Science and technology................................................................. 36
2.6. Tourism.......................................................................................... 36
2.7. Investing in Riga............................................................................. 39
2.8. Creative industries in Riga.............................................................. 41
3. Business and Investment Environment........................................ 43
3.1. Legal Framework........................................................................... 43
3.2. Business Start-up.......................................................................... 44
3.3. Real Estate..................................................................................... 45
3.4. Business Support Provided by the Municipality.............................. 47
3.5. Business Support Institutions......................................................... 49
3.6. Opportunities for Mutual Business Cooperation ............................. 52
3.7. International cooperation opportunities........................................... 55
Useful information.......................................................................................... 58
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The Economic Profile of Riga 2015
1.Outline of the Urban
Environment
1.1. General Information
Latvija
1.1.1. Geographic Location
Riga is the capital city of the Republic of Latvia; and it is located
in the central part of Latvia on the south coast of the Gulf
of Riga, on both riversides of Daugava. The city is the
geographic centre of the Baltic region countries.
Ziemeļu
district
Kurzeme
district
77 km²
Centrs
district
79 km²
Vidzeme
suburb
Zemgale
suburb
41 km²
Latgale
suburb
3 km²
58 km²
46 km²
As Riga is located in lowland
of the central part of Latvia,
there are only a few hills in the
city; the highest is Dzeguzkalns
(26 m above sea level).
The total area of the city is
304 km2; and it is divided into
six regions that, in turn, are subdivided into 58 neighbourhoods.
The planned usage of territory of Riga2
Residential area
91,03 km2 (29,9 %)
Airfield territory
2,86 km2 (0,9 %)
Water bodies
47,67 km2
(15,7 %)
Industrial area
6,9 km2 (2,3 %)
Green area
85,09 km2 (28,0 %)
The Spatial Plan of Riga for 2006 – 2018 with amendments. Explanatory memorandum.
2
Port territory
16,66 km2 (5,5 %)
Technical
construction territories
8,65 km2 (2,9 %)
Roads (streets)
45,19 km2 (14,9 %)
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The Economic Profile of Riga 2015
1.1.2. Climate
The climate of Riga is mainly determined by the moderate latitude air masses born by the Atlantic Ocean connected with the active cyclonic action;
therefore, it is often cloudy and with precipitations in the city. Approximately
220 days a year air masses born by the sea dominate in Riga. The climate is
influenced not only by the closeness of the Gulf of Riga, but also by closeness
of other large water bodies (Daugava, Kisezers), as well as by construction
territories, disposition of residential objects, area of squares and parks.
The maximum of the sun angle is on July 22nd (56.4° above horizon), and
the minimum on December 22nd (9.6° above horizon). As in the city throughout the year the cloudiness is increased, the length of sunlight in summer is
54-57 % and in winter – only 14-25 % of the maximum possible length. Due to
the predominant sea air masses, the level of precipitations in the city is high –
approximately 700 mm a year. 72 % of the total annual precipitations are rain,
16 % – snow, and the rest – mixed type precipitations.
In the last four years the average air temperature in Riga has been 7.7° C
(the norm – 6.9° C).3 However, due to air pollution the average temperature
usually is higher than the actual.4
1.1.3. Natural Landscapes and Green Area
The environmental accessibility in Riga is characterised by 39 % natural
landscapes, 16 % of them are water bodies and 23 % are green areas; therefore, Riga, adequately, can be called a green city.5 The total green area of the
city is 85.09 km2, with 29 parks, 24 graveyards, 10 larger forest areas and
forest parks, and 66 squares. Mentioned in historical annals already in early
16th century, the oldest park Strazdmuiza is in Jugla. Relatively many parks
and squares are located in the city centre (including major venues for cultural
events – Esplanade, Kronvalda park, Vermanes garden, AB Dambis, Bastejkalns) – they are popular not only among locals, but also among visitors.
Almost in every Riga’s district there is at least one green area – that provides
relatively good air quality and considerably improves the quality of urban life. In
addition, in every living area there are wide yards for short time relaxation and
nearby forest parks and forests for longer time spending.
1.1.4. Water Bodies
The geographical location of the city on coastal lowland of the region of
Daugava creek determines its richness with water bodies – Latvia’s largest
river Daugava runs through the city, as well as many smaller rivers. In addition,
Riga has nine lakes and ponds. In total, the city’s “blue” area is 17.6 % or 5
400 hectares naturally helping to create landscapes and providing citizens of
Riga with additional areas for relaxation.
The Central Statistics Bureau. Climate in Latvia. Available at: www.csb.gov.lv
The Environment Report on Strategic Assessment of Impact on Environment for Riga Development Plan 2006 - 2018
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The Assessment of Strategic Impact on Environment. Environment Report. LLC Grupa 93. 2014
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The Economic Profile of Riga 2015
The largest lake in Riga is Kisezers – it is located in the northeast part of the
city and its area is 17.3 km2. The second largest lake is the lake of Jugla (5.7
km2). Water surrounds also the old city – part of Daugava and 3.2 km long city
canal runs around it. The majority of water bodies are located on the right coast
of Daugava; whereas the largest water body on the left shore, Pardaugava, is
between Tornakalns and Agenskalns – artificially created Mara pond.
1.2. Population
1.2.1. Population of Riga
According to data on population, Riga is the largest city in the Baltic States
and the third largest (behind Saint Petersburg and Stockholm) in the region of
the Baltic Sea. On July 1st 2014, population in Riga was 701 977 (313 143
men and 388 834 women), that is 32 % of total population of Latvia. In the last
three years the number of new-borns in Riga has also increased.7
Number of new-borns in Riga
7 308
3 576
6 789
3 293
6 296
3 025
6 739
The population of Riga Region by age
groups to January 1st 20148
7 040
3 496
3 271
3 257
3 503
3 482
3 537
boys
2009
2010
2011
0–9
8,76 %
girls
3 732
11,76 %
2012
2013
10–19
8,80 %
6,56 %
15,74 %
20–29
13,16 %
16,52 %
30–39
13,62 %
13,92 %
40–49
13,96 %
50–59
9,74 %
60–69
9,60 %
70<
Men
Age
group
(years)
12,62 %
14,63 %
12,47 %
18,14 %
Women
The same as in the largest cities of Europe, the level of demographic burden
in Riga is higher in the group above working-age. The data from July 1st 2014
indicates that 98 215 people till the working-age, 450 309 people in the working-age, and 153 453 people above the working-age live in Riga.9
When comparing the administrative-territorial units by population, it can be
concluded that the majority of population lives in Latgale suburb (187 710
people) and Vidzeme suburb (175 925 people), and the minority in Centrs
district (24 027 people).
The Office of Citizenship and Migration Affairs. Number of population of Latvia in municipalities. Available at: http://www.pmlp.gov.lv
The Central Statistical Bureau. Live births by gender. Available at: www.csb.gov.lv
The Central Statistical Bureau. Age structure of men and women. Available at: www.csb.gov.lv
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The Office of Citizenship and Migration Affairs. Working age and gender structure in municipalities. Available at: http://www.pmlp.gov.lv
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The Economic Profile of Riga 2015
1.2.2. Ethnic Groups
Riga is a multinational city. In the past years the ethnic composition of the
population has not changed noticeably. Comparatively the largest proportion
is Latvians (43 %) and Russians (39 %), still the proportion of other nationalities
is also considerable – 18 % – Belarusians, Ukrainians, Poles and others.10
Proportion of different nationality groups, %
LV
RU
BY
.....
UA
PL
Latvians
43 %
Russians
39 %
Belarusians
4%
Ukrainians
4%
Poles
2%
Other nationalities
8%
1.2.3. Education
The level of citizens’ education is one of the most important preconditions for
the city’s development; therefore, also in Riga the increase of education level is
facilitated ensuring general education and other kinds of additional – including
higher, interest-related and vocational-oriented – education. In order to achieve
long-term goals, the Riga City Development Programme 2014 - 2020 has determined qualitative and modern education as one of the main priority directions.11
There are 157 pre-school institutions in Riga, 74 of them with Latvian teaching language, 51 – with Russian language, and 32 with both Latvian and Russian teaching language. Since school year 2008/2009 the number of students
has overall increased by more than 2 600 children; and up to this day more
than 26 700 young inhabitants of the city learn in pre-school institutions.
The city owns 119 general education institutions, 5 of them are primary schools, 23 – elementary schools and 91 – secondary schools. From all
the schools 12 are special schools, 10 – boarding schools and 5 – evening
schools. Approximately 65 000 students study in these schools. There are
also several interest-related and vocational-oriented educational institutions:
● Sports-oriented educational institutions (all together – 11); 7 000 students
study there (the most popular sport is basketball; 27 % of students practice it);
● Nine cultural education institutions; on average 4 000 students study there
each year;
● 13 interest-related education institutions.
10
11
The Office of Citizenship and Migration Affairs. Number of population in municipalities by nationalities. Available at: http://www.
pmlp.gov.lv
The Riga City Development Programme 2014 - 2020
The Economic Profile of Riga 2015
Riga is the capital city of higher education in Latvia – here 46 universities and
colleges, where it is possible to study different kinds and fields of higher and vocational education, educate more than 77 000 students (more than 80 % of all
the higher education students in Latvia).12 One of the priority directions defined
in the planning documents of the Ministry of Education and Science is the internationalisation of higher education and science and the increase of its international competitiveness, including the promotion of exportability; thus increasing
the competitiveness and quality of higher education – holding a certain place in
the global education market and contribution in the national economy. During
the past four years the number of foreign students in Latvia has increased twoand-a-half times, reaching almost 5 % and contributing 20 million euro each year
to the national economy. The Ministry of Education and Science aims to increase
the number of foreign students studying in Latvia to at least 10 % by 2020.13
Universities in Riga having the highest number of foreign students are the University of Latvia, the Riga Technical University and the Riga Stradina University.14
1.2.4. Culture
Riga, as the capital city of the Republic of Latvia, has always maintained the
city’s and the whole country’s tangible and intangible cultural heritage. There are
many architectural monuments of national importance in Riga; and Riga is also
a venue for cultural events of regional, national and international significance. In
2014 Riga was the European Capital of Culture, giving a chance for the city to
promote its cultural life and developments within the European Union.
Once every five years the National Song and Dance Celebration Festival
takes place in Riga, every three years – the international festival of folklore Baltica. Every year Riga is the home for events like the Riga City Celebration, the
Lacplesis Day, the Light Festival Staro Riga, the Latvian Independence Day,
the Music and Arts Festival Bildes, the National Music Festival Rigas ritmi, the
Baltic Ballet Festival, the Festival of Theatre Zelta Maska in Latvia and others.15
Since 2013 Riga is awarded as the Elegantly Delicious Capital City, highlighting
the Latvian culinary heritage and richness.
According to the State Inspection for Heritage Protection data, there are 1
711 cultural monuments in Riga, 786 of them are of national importance and
925 are of local importance.16
The historic centre of Riga with an area of 438.3 hectares (1.43 % of the
total area) was included in the UNESCO World Heritage List.17 In the centre of
Riga 40 % of all the buildings are Art Nouveau buildings; and it is much more
than in any other European city.18
The overview of the educational institutions in 2012/2013 school year. The Education, Culture and Sports Department of the Riga
City Council. Available at: www.iksd.riga.lv
13
The Ministry of Foreign Affairs of the Republic of Latvia: www.mfa.gov.lv
14
The overview of the Latvian higher education in 2013. Available at: www.izm.gov.lv
15
The Education, Culture and Sports Department of the Riga City Council: www.iksd.riga.lv
16
The State Inspection for Heritage Protection: www.mantojums.lv
17
The Riga Historical Centre Preservation and Protection Act.
18
The Tourism Development Agency: www.tava.gov.lv
12
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The Economic Profile of Riga 2015
There are three independent culture centres, the Association of Culture Institutions of the Riga City Council, the Central Library of Riga, the professional brass
band Riga, several sport and music educational establishments, etc in Riga. Besides, Riga hosts also national culture institutions as: JSC Rigas Kinostudija (Riga
Film Studio), the state-owned LLC Latvijas Nacionala Opera (Latvian National
Opera), the state-owned LLC Rigas Cirks (Riga Circus), six theatres, and others.
In 2014 the new building of National Library of Latvia, also called “Gaismas
pils” (Castle of Light) was put into operation. Its total area is 40 455 m2 and it
has enough space for 1 000 readers. In the library it will be possible not only to
store 6 million printed matters and to freely access 350 000 editions, but also
to use 10 different rooms for group activities, individual work cabins, the Music
Room, the Room of Tales, language classes, the Latvian Book-printing History
Museum, as well as a conference and concert hall with 462 seats and seminar
rooms with the total capacity of 400 seats.19 The National Library of Latvia is
one of the most outstanding projects in Latvia in the 21st century, creating the
opportunity of becoming a modern and creative world-level cultural, educational and scientific centre.20
Culture-related artistic groups in Riga 201421
4
Photo and
cinema studios
7
18
Amateur theatres
Lute-players
groups
31
Applied arts
studios
88
17
Choirs
39
52
Dance groups
8
Orchestras,
instrumental
groups and
chapels
Fine arts studios
Vocal groups
18
Folklore groups
1.3. Infrastructure
1.3.1. Residential Infrastructure
The available residential infrastructure in Riga consists of multi-apartment
residential buildings, where live approximately 600 000 inhabitants, and private houses, where live approximately 33 000 inhabitants. The city’s residential
fund consists of state-owned, municipally and privately owned houses built
in different time periods. The majority of buildings were built during the Soviet
times where now live 72 % of Riga’s inhabitants. Many buildings were also built
Latvijas Nacionālā bibliotēka jaunajā ēkā. Pieejams: www.lnb.lv
Latvijas Nacionālā bibliotēka: www.gaismaspils.lv
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Rīgas domes Izglītības, kultūras un sporta departaments. Kolektīvu datu bāze. Pieejams: www.kultura.riga.lv
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The Economic Profile of Riga 2015
before the First World War and during the First Independence of Latvia, but the
third construction boom started in 2006 that slowed down with the beginning
of economical crisis.
According to the study on housing affordability index done by the SEB
Bank, in the first quarter of 2014 this index has increased.22 Whereas, according to the real estate market report provided by the real estate agents company “Latio”, the number of all types of transactions related to real estate in
Riga in the first seven months of 2014, in comparison to the same time period
in previous year, has increased by 3.8 %. The number of real estate purchase
transactions in Riga increased by 4.7 %, including purchase of flats (increase
by 3.8 %) and mansions (increase by 11.7 %). During this period there have
been 5 800 real estate purchase transactions in Riga, approximately 90 % of
them were flat purchases. Within the total real estate purchase transactions,
number of mansion purchases is increasing.23
According to The Central Statistical Bureau, the demand for residential infrastructure continues to recover, as evidenced by both the construction of
new residential buildings and the number of buildings given for exploitation
and also the number of issued construction permits.
The number of newly built
residential buildings in Riga
(thousands, m2 total area)24
132,1
New constructions,
in total
incl.
one flat
buildings
72,9
Number of construction permits issued in Riga25
One flat buildings (without
mansions, summer houses)
206
199
193
104
2010
110
87
2011
90
2012
2013
Mansions, summer houses
27,9
2010
21,4
2011
141
161
78,9
59,1
Two and more flat buildings
63
58
12
15
16
2010
2011
2012
50
Shared houses by
different social groups
4
2
16,1
2012
10,8
1
2013
2010
2011
2012
2013
2010
2011
The Housing Affordability Index. SEB Bank. June 2014. Available at: www.seb.lv
Real Estate Market Report. Riga. Latio. August 2014. Available at: www.latio.lv
24
The Central Statistical Bureau. Construction of new residential buildings. Available at: www.csb.gov.lv
25
The Central Statistical Bureau. Number of building permits issued for building construction. Available at: www.csb.gov.lv
26
The Riga City Council City Development Department. Strategies for Monitoring System: Residential stock average per capita in
Riga (m²). Available at: www.sus.lv
23
2013
Total
New
constructions
1
At the end of 2012 the residential stock available in Riga for one resident
was 28 m2; that is by 1 m2 more than in 2010.26
22
24
2012
2013
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1.3.2. Transport Infrastructure
Advantageous geographical location of the city has contributed to its development – the city has the advantage to use all types of transport systems.
Riga is the key domestic and international passenger and freight transportation junction – there are roads, the railway, the port and the aviation in the city.
With the development of all kinds of transportation systems it is possible to
support other sectors – trade, logistics, energy, tourism, as well as enhance
the cross-boarder relationships. Riga has always been the crossroads between the West and the East.
In order to reach long-term goals, the Riga City Development Programme
2014 - 2020 has stated the balanced traffic infrastructure and organisation as
one of the main priority directions.27
Road Transport:
Riga and the Riga region is the key international and domestic passenger
and cargo transportation junction in Latvia. Road network in the Riga region is
relatively dense and it ensures radial link of Riga with rest of the territory of Latvia.
In Latvia all the major roads and transport corridors cross the capital city:
● In the North – South direction, it is ensured by the first transport corridor
in Europe “Via Baltica” and it connects European cities: Helsinki – Tallinn –
Riga – Kaunas – Warsaw and Riga – Kaliningrad – Gdansk;
● In the West – East direction, it is ensured by the European route E22 that
begins in the UK and extends till the central part of Russia.
According to data of the Central Statistical Bureau the total length of streets in
Riga in 2013 was 1 179 km; that is 125 km less than it was in 2000.28 The busiest traffic in the city is the entrances in Riga from Jurmala and Sigulda sides.29
In order to clear the city centre from major transportation transits and traffic
jams, the Southern Bridge was opened in 2008. On its both shores, trunk roads
with transport junctions are built ensuring the operation of the bridge. In 2011
Slavu transport junction became publically accessible. In case of Latvia, it is unprecedentedly very large size and technically complicated with trestle of three
stories. The same year Austrumu transport junction also was opened. In 2013
the transport junction on the left shore in direction of Zemgale suburb was finished, thus concluding all the trunk roads required for complete exploitation of
the Southern Bridge. As a result, all the transportation transits can completely
and freely bypass the city centre; moreover, the system of the new trunk roads
creates an exit to transport corridor of state significance road “Via Baltica”.30
Riga also provides an efficient and comfortable public transportation system for citizens and visitors of the city. The company responsible is the muThe Riga City Development program 2014 - 2020
The Central Statistical Bureau. Municipal streets length. Available at: www.csb.gov.lv
29
The Latvian State Roads. The average daily traffic in 2013 on the country's major roads near Riga. Available at: www.lvceli.lv
30
The Riga City Sustainable Energy Action Plan for Smart Cities 2014 - 2020
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The Economic Profile of Riga 2015
nicipally-owned LLC Rigas Satiksme (Riga Traffic) providing the city with trams
(218 trams in 9 different routes), trolley-buses (264 trolley-buses in 19 different
routes) and buses (432 buses in 51 day routes and 9 night routes), as well as
parking lots (4 796).31
Public transportation units of Rigas Satiksme
Trams
218
Trolley-buses
264
Buses
432
Minibuses
2 026
In the next five years, LLC Rigas Satiksme will provide 175 new low-floor
buses of Solaris. 60 of them will be 12 meter long, 115 – 18 meter long. It is
expected that the low-floor buses will gradually replace the old vehicles with expired exploitation time for serving passengers of public transportation in Riga.32
LLC Rigas Satiksme ensures transportation of passengers not only in the
administrative territory of Riga, but also in close regions and districts – regions
of Babite, Marupe, Garkalne, Kekava and district of Olaine.
In addition, several companies operate in the city providing services of minibuses (2 026 minibuses).33
In 2013 LLC Rigas Satiksme transported more than 150.1 million passengers. In comparison to 2012, the number of passengers has increased by 6.2
% that can be explained by increase of the economic activity, maintenance of
the basic transportation tariff, gradual decrease of unemployment and simple
ways how to pay for public transportation services.34
In Riga, as in the capital city of Latvia, a notable importance is given to
ensure agglomeration with the rest territory of Latvia, as well as for transportation of international passengers; it is provided by JSC Riga International Coach
Terminal, cooperating with 28 passenger transportation companies in total. 12
companies ensure domestic transportations (three of those ensure both domestic and international transportations), and 19 – international transportations
(nine of those are foreign companies). The JSC Riga International Coach Terminal cooperates also with three tourism agencies that provide tickets for international routes. On average in 2013 Riga International Coach Terminal served 400
routes daily, of those 340 are domestic and 60 are international routes.35
LLC Rigas Satiksme. Management Review of the integrated management system performance. 2013 annual report and future
challenges. Available at: www.rigassatiksme.lv
LLC Rigas Satiksme. Available at: www.rigassatiksme.lv
33
Taxi operators in the administrative territory of Riga. Situation on 4 August 2014. Available at: www.rdsd.lv
34
LLC Rigas Satiksme. Management Review of the integrated management system performance. 2013 annual report and future
challenges. Available at: www.rigassatiksme.lv
35
JSC Riga International Coach Terminal. 2013 annual report. Available at: www.autoosta.lv
3
32
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The Economic Profile of Riga 2015
Railway Transport
Railway transport is one of the most advantageous types of land transportation from security, as well as from ecological aspect. From all the domestic
land transportation extent, railway cargo transportation is approximately 52
% and passenger transportation in the Riga region – 30 %. According to the
railway cargo transportation structure, 85 % are transit operations, generally
from Russia and Belorussia to Latvian ports (the Eastern – Western transport
corridor); inland transportation is about 5 %; that can be explained due to
relatively short transportation distances. Almost all railway routes in Latvia go
through Riga.
Railway of Latvia is included in one of the five transnational transport corridors set by the European Union – the Northern Transport Corridor connecting
EU northern part with Norway and eastern part with Belorussia and Russia.
The existing railway network in the Baltic States is built according to Russian standards. As in Western Europe railway tracks differ in width, railway
of Latvia cannot be connected with railway network of Poland and Germany
directly, therefore on Lithuanian boarder width of wagon wheels is now being
changed. However, the implementation of the project Rail Baltica continues
aiming to re-establish direct link between the railway network of the Baltic
States and the European railway network; and to promote regional integration
by connecting metropolis of Tallinn – Riga – Kaunas – Warsaw – Berlin.
Following companies operate in the Latvian railway sector:
● JSC Latvian Railway, manages the public railway infrastructure;
● JSC Pasazieru Vilciens (Passengers Train);
● several organisations and sector companies.
Cargo transportation in Latvia is ensured by JSC Latvian Railway daughter-company LLC LDZ Cargo and by two private capital companies – JSC Baltijas Ekspresis and JSC Baltijas Tranzita Serviss. Private companies transport on
average 20 % of the total amount; it is one of the highest ratios in Europe.
JSC Pasazieru Vilciens is the domestic public railway transportation provider and LLC LDZ Cargo, cooperating with LLC L-Ekspresis, ensures international passenger transportation to Russia and Belorussia.
Water Transport
Water transport in Riga is ensured by the Freeport of Riga that plays an
important role in the global and regional cargo transport chain, as well as in
the passenger transportation network in the region of the Baltic Sea. The Freeport of Riga is a middle point of major transit roads and the eastern – western
The Economic Profile of Riga 2015
transport corridor, as it is included in such corridors:
● Trans-Siberian highway;
● North – South road through Minsk;
● Daugava – Dnieper waterway project.
Moreover, the European Union has stated that Riga is a part of Trans European corridor I (TEK I) connecting Helsinki with Tallinn, Riga, Kaunas and Warsaw.
Key facts and numbers of the Freeport of Riga:
● The Freeport of Riga is located 15 km along both banks of the river Daugava;
● Total area: 6 348 ha;
● The Freeport of Riga is open for sailing throughout the whole year;
● Status of free economic zone;
● Total length of piers: 18.2 km;
●Maximum depth at piers: 14.5 m;
● Warehouse area: 370 979 m2;
● Cargo storage area capacity: 1 926 362 m2;
● Cargo handling capacity: 58.2 million tons/year;
● Freezer facility capacity: 25 500 t;
● Oil reservoir capacity: 665 063 m3;
● The largest port in the Baltic States in 2013 by cargo turnover: 35.5 million
tons;
● Ship visits in 2013: 3 850
● Up to 77 % of cargo turnover in the Freeport of Riga consist of transit cargos
sent to or received from the Commonwealth of Independent States (CIS);
● 34 stevedoring companies and 27 shipping agents operate successfully in
the Freeport of Riga;
● The main cargos are containers, different metals, wood, carbon, fertilizers,
chemical cargos and petroleum products.36
Gaisa transports
Large amount of passenger transportation between Latvia and other world
countries ensures economical growth not only for the city, but also for the entire
country. Air transport has a noticeable influence on the national economy in general and on the increase of its gross domestic product, creating preconditions
and promoting development of other sectors, especially tourism, as well as contributing to increase of the level of employment. In Latvia air transport is provided
by JSC Riga International Airport, JSC Latvian Air Traffic and air operators, the
most influential of them is the national operator JSC Air Baltic Corporation.
During the last seven years the number of JSC Riga International Airport passengers has increased almost four times and it has become a confident leader
among airports of the Baltic States, as well as one of the fastest-developing
airports in the European Union.
The Authority of Freeport of Riga. Available at: www.rop.lv
The Ministry of Transport of the Republic of Latvia. Aviation Specific characteristics.
Available at: www.sam.gov.lv
36
37
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The Economic Profile of Riga 2015
In 2013 JSC Riga International Airport served 4 793 045 passengers. The
amount of transfer and transit passengers was 32 % of total number of passengers, whereas cargo transportation reached the highest amount in the airport’s
history – 53 539 tons. In comparison to the previous year, cargo transportation
increased by 38.44 %. The biggest cargo operators are US company Kalitta Air,
in 2013 providing 50 4 % of all cargo transportation, Latvian company Air Baltic
Corporation, providing 16.24 %, and the National Air Cargo, providing 13.24 %
of all cargo transportation.38
Pipeline Transport
Currently in Latvia there is a trunk of gas pipeline network, which connects
the system of gas pipelines of Latvia with the gas pipelines in Russia, Estonia
and Lithuania. In 2013 in those pipelines were transported 4.4 billion m3 of
natural gas.39 There are two gas pipelines that cross the city and ensure it with
natural gas:
● Since 1962 Dashava (Ukraine) – Riga;
● Since 1972 Torzhok (Russia) – Riga.
1.3.3. Engineering Infrastructure
Modern urban life is unthinkable without such obvious things as water, heat,
electricity, light and sewerage. Connections to centralized supply systems and
the quality thereof are necessary for comfortable life.
Water and Sewerage System
Water supply and sewerage system in the city is provided by LLC Rigas Udens
(Riga Water); the company offers drinking water of good quality and collects,
drains and cleans domestic wastewaters. Drinking water in Riga is accessed
from six important city’s water sources, using both surface and ground water
sources. The majority of inhabitants living on the left bank of Daugava receive
water from Daugava river basin in the water supply zone of the Riga Hydroelectric Power Plant (Riga HES), whereas inhabitants of the right bank of Daugava
– from the ground water source Baltezers-Zakumuiza. Water treatment station
Daugava can produce up to 210 thousand m3 in a day and Baltezers-Zakumuiza – up to 85 thousand m3 of drinking water. Quality of the produced drinking
water and safety of water treatment stations meet the European standards.40
In the beginning of 2013 the total length of water supply networks in Riga
reached 1 399 km, including network inlets of 332 km in length. In order to provide secure and qualitative water supply, LLC Rigas Udens every year changes
or reconstructs pipelines, hydrants and bolts in the whole territory of Riga.
The total length of sewerage system network in Riga at the beginning of
2013 reached 1 103 km, including public sewer outlets of 152.87 km in length.
JSC Riga International Airport. Annual yearbook. Available at: www.riga-airport.com
The Central Statistical Bureau. Transport by pipeline. Available at: www.csb.gov.lv
40
LLC Rigas Udens. Available at: www.rigasudens.lv
38
39
The Economic Profile of Riga 2015
LLC Rigas Udens every year increases the power of sewerage system network
and its pumps; thus, ensuring safe collection of wastewater and drainage to
the biological wastewater treatment plant Daugavgriva.41
Heat Supply Services
The JSC Rigas Siltums (Riga Heat) is the main supplier of heating in Riga. It
ensures production, distribution and sales of heat, as well as provides maintenance services of the internal heat supply systems in the buildings.
The main heat producers in Riga are the cogeneration stations owned by
JSC Latvenergo. JSC Rigas Siltums purchases from these stations approximately 70 % of all the necessary heat. About 0.05 % of heat is bought from
other companies and the rest is produced in JSC Rigas Siltums heat sources:
five heating stations, as well as several tens of small and medium size boiler-houses. Mainly gas (97 %) is used as fuel; it is also possible to use heating
oil, marked fuel and woodchips.
76 % of all heat necessary for Riga is transmitted and distributed by JSC
Rigas Siltums. 77 % of all the produced and supplied heat is used for household heating and boiling hot water.42 The total length of the city’s heating
circuit is about 900 km.
Power Supply
The same as with heat supply, power supply is also ensured by the leading
energy company in Latvia JSC Latvenergo. The company produces 90 % of
all the electro energy produced in Latvia; the majority is produced from water
as energy resource.43
Gas Supply
The supply of natural gas in the Latvian market is ensured by JSC Latvijas
Gaze (Latvian Gas) that, in accordance with licenses published by Public Utilities Commission, manages, distributes, maintains and sells natural gas. From
the gas used in Latvia, approximately 65 % is consumed in the Riga region.
Lightning Network System
Already since 1947 the lighting network system of Riga is operated and
managed by the Riga Municipally owned agency Rigas Gaisma (Riga Light). Its
main task is to maintain, to repair and to improve the operational efficiency of
the external lighting networks of urban roads (streets), parks and other public
objects owned by the municipality.
In 2013 the agency provided external light on streets for 3 903 hours a year,
managed the operation of 351 traffic lights and ensured several other not less
important duties.44
LLC Rigas Udens. Available at: www.rigasudens.lv
JSC Rigas Siltums. Available at: www.rs.lv
JSC Latvenergo. Available at: www.latvenergo.lv
44
The Riga Municipal Agency Riga Light 2013 Public Report. Available at: www.rigasgaisma.lv
41
42
43
17
18
The Economic Profile of Riga 2015
11.3.4. Information and Communication Technology Infrastructure
Information and communication technology is one of the key elements for
the growth of economic competitiveness and national economy. The fast development of technologies in the whole world proves that long-term growth
cannot happen without the development and extensive use of information
and communication technologies. Nowadays, almost in every household and
company there is a necessity for information and communication technology
infrastructure – it improves the quality of life, provides easy access to different kinds of public services, promotes development of entrepreneurship and
effective work of the municipality, enhances the process of studying and intercommunication of inhabitants.
Information and communication technology is one of the leading economic
sectors in Latvia that stimulates the development of all national economy. In
the recent years, the information and communication technology sector has
developed, and its export extent has increased, as well. More and more new
companies have been established, mostly in computer programming and consultation field. In 2013 the amount of taxes paid in this sector has increased,
the service field developed rapidly, the export level reached 30 % and it had a
notable growth.46
The Riga municipality is a friendly and suitable city for information and
communication technology sector, actively participating, supporting, using
and promoting different activities and services provided by this sector. For
example, in the public transports of Riga people use electronic travel cards;
and exhibits of the museums of Riga can be explored on mobile applications.
Since 2014 anyone who is interested can explore collections of museums
from a distance and search for specific expositions and items located in the
stocks by entering the catalogue of museum collections of the National Museum of Latvia. Whereas, speaking about the education sector, a portal E-klase
(E-class) has gained popularity among education institutions, students and
parents. To ensure convenient communication between inhabitants and local
authorities and departments, the Riga municipality is using IT tools more and
more, at the same time reducing its expenses and administrative burden.
The most important cooperation partners in the development of information
and communication technology are the Latvian Information and Communications Technology Association, the Latvian IT Cluster, the foundation TechHub
Riga (that helps new entrepreneurs of the sector to reach the global market),
as well as the Riga Technical University and the University of Latvia.
In 2014 Riga became the capital city of free wireless Internet in Europe (taking into account the number of free Wi-Fi points to one km2 and the number
of citizens). On average, in Riga one Lattelecom free Wi-Fi connection point is
available for 750 people and three Wi-Fi points on one square kilometre. After
45
46
Latvian Information and Communications Technology Association: www.notepad.lv
The Latvian Information and Communications Technology Association: www.likta.lv
19
The Economic Profile of Riga 2015
Riga, the next most developed cities in terms of free Wi-Fi are Tallinn, Stockholm, Vienna, Paris and Helsinki.47
According to the data of the Central Statistics Bureau, in four years time
(2009 – 2012) the number of employees and amount of personnel expenses, as
well as turnover and indicators of added value of enterprises in the information
and communication technology sector have considerably increased. In 2012
the turnover of information and communication technology enterprises reached
almost 2 850 million euro a year and the added value exceeded 700 million euro.
Number of enterprises in the information
and communication technology sector48
2 781
3 151
3 373
4 390
Employees in the information and
communication technology sector49
The TOTAL
in the ICT sector
17 360
17 316
18 337
21 449
18 120
3 788
2 255
2 616
15 494
13 922
14 227
2 578
2 251
1 994
ICT services
2 867
ICT wholesale
2 284
472
471
434
506
54
64
72
96
860
838
849
1 045
2009
2010
2011
2012
2009
2010
2011
2012
ICT production
Profit before taxes of enterprises in the information and communication technology
sector (million, euro)50
204,3
The TOTAL
in the sector
178,3
167,3
152,2
ICT services
153,2
150,4
122,4
140,6
ICT wholesale
0,1
5,3
2,7
35
ICT production
13,9
22,6
27,2
29,2
2009
2010
Information of Lattelecom. Available at: www.lattelecom.lv
The Central Statistical Bureau. Number of enterprises in the ICT sector. Available at: www.csb.gov.lv
49
The Central Statistical Bureau. Number of enterprises in the ICT sector. Available at: csb.gov.lv
50
The Central Statistical Bureau. Profit before taxes of enterprises in the ICT sector. Available at: csb.gov.lv
47
48
2011
2012
20
The Economic Profile of Riga 2015
Turnover, personnel expenses and added value (million, euro)51
Indicators
Working sector
2009
2010
2011
2012
1 820
2 067
2 275
2 897
ICT production
74
87
102
122
ICT wholesale
659
885
1 010
1 429
1 087
1 096
1 162
1 346
205
181
248
314
ICT production
7
6
10
11
ICT wholesale
23
20
24
28
ICT services
175
155
212
273
586
572
602
686
ICT production
31
24
43
46
ICT wholesale
58
57
58
71
ICT services
497
491
499
569
The TOTAL in the ICT sector
Turnover of
enterprises in the field
ICT services
The TOTAL in the ICT sector
Personnel expenses
of enterprises in the
field
The TOTAL in the ICT sector
Added value of
enterprises in the field
In the Riga region, the number of Internet users in households is almost 5
% higher than it is in Latvia on average – at the beginning of 2013 it reached
76 %. Computer accessibility in the Riga region was 75.8 %, what is by 4 %
higher than in the whole country.52
Accessibility of Internet in households
at the beginning of the year (%)
59,8
65
2010
63,6
68,3
2011
68,7
75,8
2012
71,6
Computer accessibility in households
at the beginning of the year (%)
76,6
76
62,8
2013
Altogether in households of Latvia
66,6
2010
64,3
69,1
2011
69,5
2012
71,7
75,8
2013
In Riga region
The Central Statistical Bureau. Turnover, personnel expenses and added value of enterprises in the ICT sector. Available at: csb.gov.lv
The Central Statistical Bureau. Computer/ Internet accessibility in different types of households. Available at: www.csb.gov.lv
51
52
The Economic Profile of Riga 2015
2.Economic
Competitiveness of Riga
The main national and planning and development documents determining the
economic competitiveness and development of the city are:
●
●
●
●
●
The National Development Plan of Latvia 2014 – 2020;
The Sustainable Development Strategy of Latvia 2030;
The Sustainable Development Strategy of Riga 2030;
The Riga Development Programme 2014 – 2020;
The Riga Spatial Plan 2006 – 2018.
2.1.Key Economic Indicators
In order to reach sustainable goals, in the Riga Development Programme
2014 – 2020 favourable business environment and high economical activity
are stated as the priority directions.
The economical recovery and growth in Riga is obvious during the last four
years when economic indicators have considerably improved after the financial
crisis. However, they are still not as high as in 2007; and it is an additional motivation for more rapid development of the economic competitiveness the city.
In 2013 in terms of GDP per capita, Riga is on the average level of the European Union. Besides, growth of GDP in Latvia can be noticed every year – in
2013 comparing to previous year it increased by 4.1 %. But GDP per capita
in the capital city excel the average level of the national indicator – for 58 %. In
2013 the trade sector has the largest share in Riga economy sectors structure
by added value – 19.3 %. The second largest economy sector of the city is
transport with 11.9 % share; the third – professional, scientific and technical
services, administrative and customer service sector with 9.8 %; and with only
a little lower share industry sector – 9.7 %.
After considerable fall in the period from 2008 to 2010, when total investments in the economy of Riga decreased 2.4 times, in recent years constant
growth of investments can be noticed. In the period from 2010 till 2012 the
amount of investments in the capital city increased by 43 %; however, it is still
40 % lower than the pre-crisis indicator.
In 2013 the amount of investments in Riga made approximately 46 % of
total investments in the country; that is a considerably lower than the pre-crisis
indicator – 54 %. But the share of construction works done in the capital city
21
22
The Economic Profile of Riga 2015
of the total in the country in 2013 was 38 %; in comparison to 2008, when it
reached 47 %.1
Non-financial investments in the statistical regions (in comparable prices of
2012; million euro)2
2 082,4
2005
702,3
1 029,9
6 452,4
1 328,7
6 882,3
1 155,9
4 374,6
2 414,6
1 119.8
409,2
3 316,3
1 536,7
1 439,8
2011
476,7
4 256,8
1 767,8
1 669,9
2012
641,9
incl. construction work
3 627,6
783,3
2010
Non-financial
investment
6 671
1 720
2009
Riga Region
3 280
2 440,5
2008
incl. construction work
3 179,7
2 996
2007
Non-financial
investment
2 750,3
2 501,6
2006
Latvia
5 898,2
4 770,9
2 192,4
According to data of the Central Statistics Bureau, in the Riga region there
are active more than 40 % of all the companies of Latvia. The majority enterprises in Riga are microenterprises – in 2012, 88 % of the total market sector.
There are 266 large enterprises located in the Riga region; that makes 70 % of
all economically active companies in the country.
Economically active entities*, in breakdown by size groups3
Market sector
137 626
Latvia
2009
Riga
Region
micro
54 308
145 303
Latvia
2010
Riga
Region
151 911
Latvia
Riga
Region
medium
large
55 978
2011
small
59 255
Out-ofmarket
sector
162 517
Latvia
2012
Riga
Region
64 859
* Entities of market sector: self-employed persons, individual merchants, commercial companies, farmers and fishermen. Entities of out-ofmarket sector: funds, foundations and associations, state budget institutions, municipal budget institutions.
The Riga City Council Public Report 2013
Central Statistical Bureau. Non-financial investments. Available at: www.csb.gov.lv
The Central Statistical Bureau. Economically active statistical units. Available at: www.csb.gov.lv
1
2
3
The Economic Profile of Riga 2015
In 2013 the Riga municipality continued its long-term cooperation with
the credit rating agencies Standard& Poor’s and Moody’s Investors Service.
Moody’s Investors Service assessed positively work of the Riga municipality
in the financial field, its constant capability to ensure operative balance of the
budget and sufficient level of financial resource accumulation for covering future liabilities, as well as it increased the future forecast of credit rating of the
city from stable to positive. In the assessment of the agency, such factors as
sufficient liquidity of financial resources, accumulation of financial resources,
and ability to ensure covering liabilities in the coming years are mentioned as
the financial sector positive factors of the city.4
2.2.Economic Activity of Population
The population of Riga is a key driving force and foundation for the economic development of the city. As it is stated in the 2014 report of the Ministry
of Economics, gradual increase of economic activities positively affects the
labour market – the level of employment increases and high unemployment
caused by the crisis decreases. Nevertheless, certain groups of population,
especially people with low education level and qualifications, elderly people,
as well as young people, feel the improvement of situation less than others.
Since the middle of 2010, the total number of employees has steadily increased in Latvia. According to data of the Labour Force Survey, in the time
period from 2011 to 2013 the number of employees has increased by 43.2
thousands, or by 14.4 thousands a year. The relatively stable economic recovery basically determined employment growth – since the end of 2009 GDP
has increased by one fifth. At the same time, increase of employment has
facilitated considerable decline of unemployment. The rate of unemployment
has decreased by almost one half during the last four years.5
In 2013 the number of unemployed people in Riga continued to decrease,
in one year time dropping by 3.1 thousand. In the end of 2013 approximately
18.3 thousand unemployed people were registered in Riga, decreasing the
rate of unemployment to 5.6 % of total economically active population.6 In
July 2014 on the national level the lowest rate of unemployment was registered in the Riga region – 5.4 %, while in Riga it is 5.1 %. Comparing with the
data of July 2013, the rate of unemployment has decreased by 0.7 %.7
Since 2011 Riga has the highest employment rate in the country and highest increase of the number of employed people. In 2013 the most people are
employed in the trade, finance and commercial sectors, as well as in transport
sector. In comparison to 2008, the number of employees has decreased in
industrial and construction sectors (by 43 %); but the largest increase can be
noticed in finance and commercial activity sector, as well as in education sector.
The Riga City Council Public Report 2013
The Report on the Latvian National Economy 2013
6
The Riga City Council Public Report 2013
Unemployment rates. The State Employment Agency. Available at: www.nva.gov.lv
4
5
23
24
The Economic Profile of Riga 2015
Employment in Riga by economic activity sectors (% of total)8
Industrial manufacturing
17
12,7
Construction
2008
2013
12,2
6,9
Trade
19,7
13,9
Transport
Finance and
commerce
15,4
12,1
Public
administration
22
17,4
6,7
6,6
6,6
Education
10,4
4,4
5,2
Health
protection
4,8
4,9
Other
In 2014 wages in Riga are by 12 % higher than in the country overall. In
comparison to the last year, in the first half of 2014 the average gross salary
has increased, reaching on average 853 euro a month. In Riga, employees in
the public sector have higher average gross salary by 101 euro than employees in the private sector.
Average monthly wage (euro)9
2011
2012
2013
2014*
In Latvia
In Riga
In Latvia
In Riga
In Latvia
In Riga
In Latvia
In Riga
TOTAL
660
756
684
777
715
814
751
853
Public sector
701
828
732
859
766
894
790
919
Private sector
636
716
657
733
688
771
730
818
In the first half of the year
*
2.3. Sectorial Structure of the Economy and
Priority Sectors
One of the key pillars for the development of the city is economy whose
main task is enabling citizens to earn money and to take care of themselves
and their families. Economy is directly related to other pillars as well – the
urban environment (economical development based on the east – west direction) and society (educated, capable and culture-respecting society). During
the implementation process of the strategy of the city, municipal institutions
choose such development policy activities that contribute reaching high em The Riga City Council Public Report 2013
The Central Statistical Bureau. Employees’ average monthly wage. Available at: www.csb.gov.lv
8
9
25
The Economic Profile of Riga 2015
ployment rate, sustainable economical growth and price stability thus creating
material basis for growth of welfare of citizens and the city itself.
The main part of GDP of Latvia is formed by the service sector (approximately 70 %), manufacturing in the national economy forms 14.1 % of GDP,
trade – 16.9 %, transport and storage sectors – 13 %, construction sector –
6.1 %.10 In 2013, the economical development of Latvia was supported by
four main sectors – trade, construction, operations with real estate and commercial services. Consequently, by the breakdown of the sectors the growing
economical dependence on the domestic market demand is emerged clearly.
However, in the sectors of transport and logistics occurred only small development and in the manufacturing sector the overall results were the same as
in the previous year.11
According to the data of the Riga City Council Public Report 2013, the largest proportion of economy sectors by added value has trade (19.3 %), transport (11.9 %) and professional, scientific and technical services, administrative
and customer services (9.8 %). Only slightly smaller proportion has manufacturing (9.7 %). During the post-crisis years major changes in the structure of
Riga city economy sectors have not occurred; customer service sector still
dominates in the economy of the city.12
Proportion of Riga economy sectors by added value (%)
9,8
9,7
Industrial manufacturing
Energetics
2011
2013*
3,7
3,4
4,5
Construction
5,3
19,3
19,3
Trade
12,8
11,9
Transport
Information and
communication services
7
7,3
Finance and
insurance services
Operations with
real estate
Professional, scientific
and technical services
5,8
6
8,3
10
9,8
5,8
5,6
Public administration
Education
Health protection
3,4
3,2
2,9
2,8
Other
* 2013 – evaluation
10
11
12
9,1
Information platform Balticexport.com
Nordea Economical review of Latvia. Available at: www.nordea.lv
The Riga City Council Public Report 2013
6,7
6,7
26
The Economic Profile of Riga 2015
By number of enterprises, in 2013 in Riga the most of enterprises work in
sectors of real estate, services (financial, management, legal and other), and
in transport and industrial sectors. By turnover, in 2013 the largest company
in Riga was LLC Uralcheim Trading, at the same time period it was also the
largest company in Latvia in trade sector. Next largest companies were JSC
Latvenergo, state company working in the field of energy, and LLC Orlen Latvia, working in fuel and wholesale of solid, liquid and gaseous fuels business.13
Number of companies by sectors in Riga sorted by overall turnover in 2013 14
Renting and management of owned or
rented real estate
Book-keeping, accounting, audit and
revision services; tax consultancy
Consultancy on commercial activities
and management
3 721
2 165
1 848
1 489
Freight transportation on roads
Construction of residential and
non-residential buildings
Buying and selling of own
real estate
Management of real estate
for remuneration or on contract basis
1 400
1 281
1 184
Legal services
1 114
Public relations agencies
1 095
Car Maintenance and repair services
1 016
Companies with highest turnover in Riga
Company
Turnover, EUR
In comparison to 2012
LLC URALCHEM Trading
1 123 360 042
-7 %
JSC Latvenergo
944 463 384
1%
LLC ORLEN Latvia
769 964 666
11 %
LLC RIMI LATVIA
672 326 380
7%
JSC ELKO GRUPA
640 531 124
-11 %
JSC Latvijas Gāze
573 963 012
-5 %
LLC LDZ CARGO
361 588 033
-8 %
LLC NESTE LATVIJA
327 087 764
10 %
LLC LUKoil Baltija R
325 524 078
0%
JSC Sadales tīkls
298 417 745
1%
The main priority sectors of the country are: production of food and beverages, manufacturing of wood products, production of chemical and pharmaceutical substances and production of chemical products, mechanical engineering and metalworking products, production of computers, electronic,
electric and optical equipment, telecommunication and other IT services, storStatistics of Lursoft. Available at: www.lursoft.lv
Statistics of Lursoft. Available at: www.lursoft.lv
13
14
The Economic Profile of Riga 2015
age and transport activities. Riga City Council City Development Department
has defined the following priority sectors to improve the competitiveness of
the City of Riga:
● transport and storage sector;
● manufacturing of wood and cork products;
● production of food and beverages;
● computer, electronic, electric and optical equipment production and information and communication technologies;
● construction sector;
● mechanical engineering and metalworking sector;
● tourism, including other sectors that are important for development of tourism.
2.4.Transport and Logistics
Riga as the capital of Latvia, by its advantageous geographical location in
the middle of Baltic States next to Gulf of Riga, successfully operates as a
crossroads between the East and the West of Europe, as well as the North
and the South. The Riga municipality and involved institutions successfully
fulfil their functions and responsibilities to maintain and to develop international cooperation with all the involved countries. Riga can be called the largest
transport and logistics centre not only of the region, but also the whole country
where all types of transports are used.
For the development of the sector different types of studies are done by the
Riga municipality. The main references, future goals and tasks are included in
the following development planning documents of the city:
1.The Riga Development Programme 2014 – 2020;
2.The Sustainable Development Strategy of Riga 2030;
3.The Riga and Riga Suburbs Mobility Plan (accepted in 2010) and action
programme thereof determining the priority activities to be implemented
in the long-term in order to improve and to arrange the transport infrastructure considering the available financial resources. The main goal of
the Riga and Riga Suburbs Mobility Plan is to determine the necessary
actions for creating joint traffic system and to improve territorial accessibility by ensuring coordinated and united transport infrastructure planning and traffic organization in Riga and Riga suburbs.
2.4.1. Freeport of Riga
Since old times Riga has had a port (the first mentioning in 5th century).
Initially it formed naturally along the coasts of Daugava as one of the destinations of the international trade route between the Baltic Sea and Black Sea;
however, over the time it was developed and formed according to the particular situation and requirements. Currently the Freeport of Riga is located at the
27
28
The Economic Profile of Riga 2015
further southern part of the Gulf of Riga and it has been formed along both
coasts of Daugava in 15 km of length. The port is a multi purpose venue that
in terms of cargo turnover is the fifth largest port in the eastern coastline of the
Baltic Sea; in addition, it also provides passengers transportation.15
The Freeport of Riga is directly related to the development of the North
axis of Trans-European transport network TEN-T and sea mainlines – in these
directions it can serve as a transport junction. The Freeport of Riga is also
strategically the most advantageous cargo transportation road in the region;
cargo could be transported also in the European – Asian transport corridor (to/
from Kazakhstan, China and other countries). Riga has the closest port of the
Eastern border of the European Union with the consumer markets of Russia,
Common Wealth of Independent States and Asia.
The Freeport of Riga for many years cooperates with international organizations – the Cruise Europe organisation, the Baltic Ports Organization, the European Sea Port Organization, the German-Baltic Chamber of Commerce in Latvia, the International Association of Cities and Ports, the International Federation
of Hydrographic Societies and the International Harbour Master Association.
Riga has a multi-functional port handling all types of cargo except crude oil.
The total cargo turnover in the first eight months of 2014 has reached nearly
27 000 tons, that is 14 % more than at the same time period last year. In 2014
the main types of cargo are coal (36.9 %), petroleum products (25.2 %), containerized cargos (9.6 %) and timber (7.5 %). The transportation tonnage of
chemicals, ore, scrap-iron and different types of metal has increased. Overall,
the port serves 4000 ships a year on average; the majority of them are dry
cargo ships, oil tankers and container ships.
The structure of transhipped cargo in January – August 2014
Petroleum products
25,2 %
Timber
7,5 %
Chemicals
6,1 %
Other
14,7 %
Containerized cargos
9,6 %
Coal
36,9 %
The Freeport of Riga Authority. Available at: www.rop.lv
15
The Economic Profile of Riga 2015
Amount and types of ships served
5000
4000
Others
Container ships
3000
Bulker
Passenger ships, ferries
Oil tankers
2000
Dry cargo ships
1000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Cruise ships are served for a long time now in the Freeport of Riga. On May
22nd 2013 the cruise ship Ocean Dream paid its first visit in the Freeport of
Riga. The visit of this ship in Riga was special – the ship Ocean Dream makes
a hundred days journey around the world within the peace mission organization Peace Boat. Ships of such European cruise companies as MSC Cruises,
Viking Line ABP, Pullmantur Cruises, Silja Line and others regularly visit the
Freeport of Riga. In 2013, as it was in 2003, Riga was visited by regatta Tall
Ships Races with its countless sailing ships – for four days everyone could
explore gorgeous ships and talk with their teams.
Number of entering cruise ships and passengers in the Freeport of Riga
Ships 107
entering
the port
90
84
92
88
76
64
60
69 413
65 461
61 431
58 564
69
83 091
65
66 968
63 527
50 176
48 824
40 811
Number of
passengers
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Besides cruise ships, since April 6th 2006 in the Freeport of Riga JSC Tallink
provides passenger transportation in the route Riga – Stockholm. The number
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30
The Economic Profile of Riga 2015
of passengers rapidly increased from 2008 till 2009, when two ships cruised
in the route Riga – Stockholm serving more than 500 000 passengers. At the
moment, the number of passengers is decreasing – the ship M/S Isabelle
cruises in the route Riga – Stockholm providing transportation of passengers,
passengers’ vessels and cargo between Latvia and Sweden, departing from
Riga and Stockholm every second day.
The number of ferry passengers in the Freeport of Riga
444 769
416 000
360 211
370 261
388 768
327 622
319 272
Entering
280 974
271 831
Departing
206 438
196 483
158 700
152 315
118 897
80 589 158 700
50 828 53 891
2004
45 043
53 651
2005
2006
2007
2008
2009
2010
2011
2012
2013
The Freeport of Riga Authority has started to elaborate an infrastructure development project “The Infrastructure Development in Krievu Sala for the Transfer
of Port Activities from the City Centre”. In the Spatial Plan of Riga 2006 – 2018 it
is also foreseen to make the northern crossing of Daugava and to continue the
construction of the Freeport of Riga station in Kundzinsala. The Riga municipality
also emphasizes the necessity for development of passenger transportation envisaging facilitation of passenger transportation between Riga and other cities.
On February 7th 2011 the Freeport of Riga Authority agreed to be a partner
for the Baltic Sea regional program of the European Union 2007 – 2013 in the
project “Amber Coast Logistics”. Implementation of the project took place till
March 2014 and the Freeport of Riga Authority was responsible for the 4th work
package “The Concept of Sustainable and Efficient Transport Provision, Multimodal Transport Chains”, where four activities were included:
● macro economical development, the market perspectives of multimodal
transport chains and their impact on land infrastructure of ports in the region of ACL project (November 2011 – November 2012);
● innovations in the work of multimodal transport chains and their impact on
the environment (March 2012 – July 2013);
● challenges in the port operations ensuring development of land infrastructure
The Economic Profile of Riga 2015
and work of multimodal transport chains (January 2012 – September 2013);
● the action programme of multimodal transport system in the Baltic Sea
Region (January 2013 – March 2014).
The existing data and development indicators of the port indicate long-term
viability, confirmed by the forecasts of indicative traffic intensities included in
the Freeport of Riga Development Programme 2009 – 2018. For elaboration
of forecasts of entering ships traffic, cargo turnover was taken into account, as
well as tendencies of small ship development, such as Handy Size, Handymax
and Panamax.
2.4.2. Riga International Airport
The Riga International Airport is the largest international aviation company in the
Baltic States and it is the main air traffic centre of this region that provides regular
passenger transportation, cargo and mail transportation with the civil aviation aircrafts to European and other cities world wide. The Riga International Airport provides both aviation services (aircraft, passenger and cargo service) and non-aviation services (premises and territory renting, parking lots, VIP centre services and
others). It works with domestic and international airlines and has become one of
the few European airports that cooperate with both full-service and low-cost airlines. 83 direct destinations are available from Riga International Airport.16
The Air Transport Research Society (ATRS), after comparing the financial data
of 200 airports, has evaluated the Riga International Airport as the most competitive airport in Europe, taking into account expenses and structure of tariffs
per passenger. ATRS carries out such research every year since 2002 and the
Riga International Airport receives this honour for the first time. The research
compared 69 European, 78 North American and 53 Asian airports. In order to
determine the most effective and competitive airports in the world, comparative
analysis of financial and price policies of airports included in the research have
been carried out.
The Riga International Airport in the field of customer service handles transfer
and transit passengers, passengers with special needs, under-aged children travelling unaccompanied, as well as accommodates VIP, CIP and general aviation
passengers, handles passengers services in case of flight delay and baggage
lost, and registers passengers, checks documents, organises passengers boarding and getting off from the aircraft and supervises passengers on the platform.
In the airport group which includes the Riga International Airport (to 10 MPPA),
the average share of transit passengers is around 9 %. The amount of transit/
transfer passengers in the Riga International Airport reaches 36.8 %; as a result,
due to its experience with large number of transit passengers, the airport has
SJSC Riga International Airport. Available at: www.riga-airport.com
16
31
32
The Economic Profile of Riga 2015
notable advantages in increasing the future number of transit passengers. In the
Riga International Airport the main stream of transit passengers is provided by
the airline company AirBaltic. In 2011 the AirBaltic market share in the airport
was 66 %, or more than 3.37 million passengers.
Regular and non-regular flight services are performed in the aircraft, baggage,
mail and cargo services. In October 2013 the Riga International Airport reached
a new record in the amount of cargo shipments – 7 809 tons, that is by 215 %
more than in October 2012, and by 290 tons more than in April 2012. The majority of cargo shipments in the airport (~70 %) are for supply of the international
forces in Afghanistan proving the credible partnership role of Latvia in the NATO.
Amount of cargo (t), passengers and flights in the Riga International Airport
5 106 926
4 767 764
4 663 647
4 464 859
4 066 854
3 690 549
72 855
2 495 020
1 878 035
1 060 426
68 572
68 145
3 160 945
57 232
62 486
60 087
51 087
47 347
40 162
34 552
32 953
27 325
15 896
12 558
8 130
8 751
2004
2005
2006
2007
7 669
2008
9 431
12 294
Passengers
12 665
Flights
Cargo (t)
2009
2010
2011
2012
2013
For development of the airport, different types of projects are planned and
implemented to improve both infrastructure and services. In 2015 it is scheduled to finish the work on the project “The Riga International Airport Infrastructure Development”; the aim of the project is to improve environmental conditions of the controlled and open areas, to enhance air travel security standards
and to increase the capacity of the Riga International Airport. The project is
financed by the Cohesion Fund.
In 2014 the project Complex Solutions for Reduction of Greenhouse Gas
Emissions at the Riga International Airport has been started aiming to reduce
greenhouse gas emissions by changing the existing luminaries with the energy-efficient LED luminaries in the administrative building and in the terminal.
The project is financed by the CCFI.17
SJSC Riga International Airport. Available at: www.riga-airport.com
17
The Economic Profile of Riga 2015
2.4.3. Latvian Railway
Latvian railway transport is organised by two state enterprises whose centre
is located in Riga. For passenger transportation is responsible JSC Pasazieru
Vilciens, founded in 2001, but for freight transportation and overall railway infrastructure is responsible concern Latvian Railway, which is one of the largest
enterprises in the country employing almost 12 000 people.18
In Latvia the main railway passenger routes provided by JSC Pasazieru Vilciens are:
● The electric train routes: Riga – Aizkraukle, Jelgava, Skulte, Tukums;
● The diesel train routes: Riga – Daugavpils, Madona, Gulbene, Krustpils,
Sigulda, Valga, Rezekne, Zilupe, Liepaja.19
In 2013 the passenger circulation in railway transportation reached 729 million passengers/km; that is four million passengers/km more than the previous
year.20 It is expected that railway transportation services in the future will be
used even more often.
Railway is one of the main transportation roads for variety oversized freight,
and it is a essential development factor of the entire country, as well as support for the economical growth. Mainly bulk and liquid freight are transported
by railway, however, during recent years, amount of transported containerized
freight has also increased. In 2013 the majority of transportations were import
freight – 47.7 million tons, or 85.4 % of the total freight transportations. In
comparison to the previous year, import freight decreased by 4.1 %. Moreover, in 2013 freight transportations through ports were 45.2 million tons that,
in comparison to the previous year, is 7.7 % less. 4.4 million tons were export
freight transportation – by 10.8 % less than the previous year. 2.6 million tons
were transported by land transit and in 2013 1.2 million tons were domestic
freight transportation.21
Freight transportations are mainly done from Russia and Belorussia to Latvian ports,22 but only 2 % are domestic transportations.23
Understanding the major influence of railway on the development of the
country, more and more new projects are elaborated and implemented for the
development of railway infrastructure and services. Currently TEN-T project is
implemented for track reconstruction in the Rail Baltica corridor in Latvia; its
aim is to reconstruct and to adjust existing railway tracks in the sections from
Sigulda till Latvian and Estonian boarders in Valka and from Jelgava to Latvi SJSC Latvian Railway Annual Report 2013
JSC Pasazieru Vilciens. Available at: www.pv.lv
20
The Ministry of Transport of the Republic of Latvia. Passenger circulation of railway transport in the first quarter of 2014. Available at: www.sam.gov.lv
21
SJSC Latvian Railway Annual Report 2013
22
SJSC Latvian Railway Annual Report 2013
23
The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv
18
19
33
34
The Economic Profile of Riga 2015
an and Lithuanian boarders, ensuring freight train speed up to 80 km/h and
passenger train speed up to 120 km/h. In the autumn of 2014 elaboration of
sketch project for electrification of the Latvian railway network was finished.
This project is the initial stage for electrification of the Latvian railway network
in the East – West corridor, Rail Baltica route, and modernization of the existing electrification network for operating with alternating current of 25 kW. After
finishing this project, the necessary sketch project is developed for elaboration
of the project application to receive European Union financing and to prepare
procurement documentation for electrification works.
Besides that, the following projects co-financed by the Cohesion Fund are
implemented:
1Modernization of Liepaja station signalling system with reconstruction of
rail tracks;
2. Reconstruction of railway tracks;
3. Replacement of switches;
4. Construction of the second track in the section Skriveri – Krustpils;
5.Modernization of railway passenger infrastructure;
6. Reconstruction of marshalling hump of Skirotava Station;
7. Construction of the Bolderaja 2 station with an access track to the Krievu Sala terminals;
8.Modernization of signalling, telecommunication and power supply systems in the section Bolderaja 1 – Zasulauks.24
Freight turnover in railway transport (million t/km)25
19 779
17 955
13 310
2000
14 179
2001
19 581
18 618
18 313
25
21 867
19 532
18 725
17 179
16 831
15 020
2002
2003
2004
2005
2006
2007
2008
2009
SJSC Latvian Railway. Available at: www.ldz.lv
The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv
24
21 410
2010
2011
2012
2013
35
The Economic Profile of Riga 2015
Information of the freight transportation amounts (thousand tons) transported
by JSC LDZ Cargo in the Latvian railway in August and eight months
of 2013 – 201426
August
2014 %
8 months
2014 %
2013
2014
vs 2013
2013
2014
vs 2013
4 218
3 899
92,4
37 821
38 891
102,8
Domestic shipments
195
203
104,1
688
678
98,5
Export shipments, incl.:
353
297
84,1
2965
3 006
101,4
201
128
63,7
1 164
1 051
90,3
3 426
3 270
95,4
32 245
33 957
105,3
3 141
3 033
96,6
29 392
31 220
106,2
244
129
52,9
1923
1250
65,0
Transported cargo – overall, incl.:
via near port stations
Import shipments, incl.:
via near port stations
Land transit
2.4.4. Road freight transport
Road transport also has an important role in the development of transport
sector and national economy. Road freight transportation has two NACE 2
codes 49.41 and 49.42. According to the Central Statistics Bureau, in 2012
there were 3 296 companies working in the railway and pipeline transport
sector27 proving that the market is fragmented and dense.
Road freight transport makes approximately 29 % of the total freight transport volume in the country and in 2013 more than 80 % of road freight transport
was particularly domestic road transportations. From 2010 till 2013 in Latvia,
including Riga, relatively small changes can be observed in the market; on average domestic road freight transportations are 50 000 thousand tons a year.
Road freight transport (thousand tons)28
46 809
39 209
7 600
60 609
53 936
52 621
44 787
50 484
43 057
9 149
10 125
9 564
Domestic
International
2010
2011
2012
2013
SJSC Latvian Railway. Amount of cargo shipments. Available at: www.ldz.lv
The Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv
Central Statistical Bureau. Cargo transport by railroad. Available at: www.csb.gov.lv
26
27
28
36
The Economic Profile of Riga 2015
2.5.Science and technology
Science and technology sector is the basis for national economy, and it has
an important role in the prosperity and development of the country. In Latvia the
amount of investments in the field of research since 2000 has increased more
than 2.8 times. Riga is in the first place in Latvia in terms of number of universities and students and it is also a scientific, research and innovation technology
centre of the country. 80 % of all the universities of Latvia are located in Riga.
Therefore, the main task of the city is to continue preparing high-level experts,
who could contribute in creating new scientific solutions and in developing
innovations in the market. In addition, Riga with its educational base is already
the centre of medical field in the Baltic States scale; it could also become a
centre in the pharmaceutical and biotechnological sectors.
There are seven scientific institutions – the Institute of Electronics and Computer Science, the Institute of Physical Energetics, the Latvian Institute of
Aquatic Ecology, the Latvian Institute of Organic Synthesis, the Latvian State
Institute of Agrarian Economics, the Latvian State Institute of Wood Chemistry
and Latvian Biomedical Research and Study Centre, as well as two private
scientific institutes – LLC Economical Institute of Latvian Academy of Sciences
and the Information Technology Institute of Riga working actively in Riga.29
The interest of entrepreneurs for science and new researches is directly linked
to their free financial resources and new funding possibilities with the support of
different national and European Union programmes and funds. To develop and
to improve entrepreneurship, services of technology practice contact points
(hereinafter – TPCP) are provided. Four of eight TPCP operate in Riga:
1.TPCP of the University of Latvia;
2.TPCP of the Art Academy of Latvia;
3.TPCP of the Riga Technical University;
4.TPCP of the Riga Stradina University.
A technology practice contact point is a structural unit of a scientific institute or a university, that supports and promotes knowledge and technology
transfer activities, as well as is responsible for founding and maintaining external networks (including private sector), by providing information about the
research activities and experience of the organisation. Its aim is to identify the
existing and necessary research competences in universities and institutes,
and to develop them.30
2.6.Tourism
Tourism is a one of the priority sector of the economy of Riga and Latvia,
and the capital city is the most popular foreign tourist destination in the coun29
30
The Ministry of Education and Science of the Republic of Latvia. Available at: www.izm.gov.lv
The Latvian Investment and Development Agency. Technology Practice Contact Points. Available at: www.liaa.gov.lv
The Economic Profile of Riga 2015
try. To promote the development of tourism sector, country has defined the
following economical goals of the sector:
● to increase the share of foreign tourists that stay for three and more days;
● to increase the growth of export of tourism services every year by 5 – 10
% in comparison to the previous year;
● to achieve the characteristic growth of GDP in tourism sector up to the
average level of countries in Central and Eastern Europe (on average 5 %);
● to ensure that growth of share of local tourism services every year has a tendency to outperform the growth of total share of export tourism services.31
Riga, as the Hanseatic League city, has all the precondition for becoming
a favourable tourism destination. Since 1997 the historical centre of Riga has
been included in the UNESCO cultural heritage list, the city has high quality urban construction, architecture, artistic and historical monuments, and different
relaxation possibilities.
Currently the main tourism promoter and developer of the sector is the Riga
Tourism Development Bureau, more widely known by its tourism brand name
Live Riga. The bureau ensures a platform for five trends:32
● „Look Riga” - FEEL
Look
Riga
Riga
● „Feel
Riga” information
information
about
about events,
sightseeing
objects,
● „Stay Riga” restaurants,
SPA and
museums and
shopping
other places
in●Riga
whereRiga” places in the
„Meet
city
events take place
STAY
Riga
MEET
Riga
WORK
Riga
information
about short-term
or long-term
accommodation
possibilities in
the city, as well
medical tourism
information
about
conference,
meeting
and event
possibilities in
Riga
information about
business, investments, export and
possibilities to
develop the economical environment in the city
● „Work Riga”
Since its foundation in 2009, in the frameworks of Live Riga different marketing campaigns in foreign countries have been started – in Russia, Lithuania,
Estonia, Denmark, Finland, Germany, Norway and elsewhere; therefore, the
amount of tourists in Riga has increased. According to statistical data, the
amount of guests accommodated in hotels and other accommodation places
increase every year – the number of foreign tourists accommodated in 2013
has been almost by 125 000 guests more than in the previous year.
Overall, at the end of 2013 in Riga there were 115 accommodation places,
with total number of beds 13 187. In the first half of 2014 the occupancy of
hotel beds has grown almost by 64.1 %. In 2013 the majority of tourists came
from Russia, Lithuania, Sweden, Estonia, Germany and Norway. Mostly tourists visit Riga during the summer season.33
The Marketing strategy of Latvian Tourism 2010 - 2015.
The Bureau of Riga Tourism Development. Available at: www.liveriga.com
33
The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv
31
32
37
38
The Economic Profile of Riga 2015
Indicators of hotel usage – bed occupancy in Riga (%) 34
48,13
40,81
43,31
34,07
2010
2011
2012
2013
Number of tourists accommodated in hotels and
other accommodation places in Riga 2009 - 201335
1 112 990
943 671
779 852
823 698
971 728
971 303
845 681
676 945
Accommodated
guests all together
Foreign guests
2010
2011
2012
2013
Everyone, regardless of age, gender or interests, can find something interesting and useful in the capital city of Latvia, Riga:36
1. Rīga – Baltijas kultūras galvaspilsēta!
2. Rīga – arhitektūras pērle!
3. Rīga – gastronomijas galvaspilsēta!
Culture 4. Rīga – vieta aktīvai atpūtai!
Capital of
capital of 5. Rīga, kur satiekas
gadsimti!
An architectural
gastronomy!
the Baltic’s!
pearl!
6. Rīga – pilsēta tavam
skaistumam un labsajūtai!
7. Rīga – pilsēta iepirkumiem!
9. Rīga – pilsēta tavai veselībai!
10. Rīga – pilsēta tavam biznesam!2
city for your
business!
City for beauty
and wellness!
Place for
active
holidays!
Where centuries meet!
City for your health!
The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv
The Central Statistics Bureau. Hotels and other accommodation places. Available at: www.csb.gov.lv
The Bureau of Riga Tourism Development. Available at: www.liveriga.com
34
35
36
City for shopping!
The Economic Profile of Riga 2015
2.7.Investing in Riga
Explicit cyclicality can be observed in the dynamics of investments. During
the years of economical recession, the amount of investments in the economy
of Latvia decreased considerably; but while the economical situation progress,
investment activities are growing relatively quickly. In 2013 the amount of investments in the economy of Latvia was by 4.3 % less than in the previous
year and it made 21.1 % of GDP. At the beginning of 2014 the dynamics of
investments were slowly growing – during the first quarter of the year in the
economy was invested 2.2 % more than a year ago.
The country and city have an essential role in the process of investing. In
the conditions of weak crediting, the state ensures a crucial support for private
investments with co-financing of European Union structure funds.
During the first quarter of 2014 in the economy of Latvia was invested 2.2 %
more than in the previous year, including investments in the production sectors
grew by 6 %, while the investments in the services sectors stayed at the level
of previous year.37 According to Lursoft data, the direct foreign investments in
share capital of registered companies in Riga in the first half of 2014 exceeded 5.4 billion euro that is by 3 % more than in the previous year. The amount
of foreign investments in the city is 79.3 % of total foreign investments in the
country. The largest investors in Riga are Swedbank AB, GE Capital Global
Financial Holdings Inc. and DnB Bank ASA.
Direct foreign investments in share capital of registered companies in Riga
(million euro)38
5,0227
4,3136
5,4250
4,5064 4,5682
3,068
0,9404
1,0531 1,2126
1,351
1,3850 1,4671
1,7769
2,0404
2,3372
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Lielākie investori Rīgā, uz 2014. gada 1. jūliju3
The Report on the Latvian National Economy 2013
Statistics of Lursoft. Foreign investments. Available at: www.lursoft.lv
37
38
39
40
The Economic Profile of Riga 2015
The largest investors in Riga, to July 1st 201439
Investor
Country
Investments, EUR
Kingdom of Sweden
942 853 583 64
United States of America
226 794 320 00
Kingdom of Norway
191 178 337 06
Kingdom of Netherlands
137 456 708 00
TILTS COMMUNICATIONS A/S
Kingdom of Denmark
101 850 587 08
BERGVIK SKOG AB
Kingdom of Sweden
99 674 169 47
BITE Lietuva UAB
Republic of Lithuania
99 085 286 00
United Kingdom of Great Britain and
Northern Ireland
93 030 206 15
Euromin Holdings (Cyprus) Limited
Republic of Cyprus
73 587 176 51
Tele2 Sverige Aktiebolag
Kingdom of Sweden
71 146 436 28
United Kingdom of Great Britain and
Northern Ireland
68 927 034 00
Ektornet Latvia AB
Kingdom of Sweden
66 589 652 66
LINSTOW AS
Kingdom of Norway
65 532 144 00
Guselnikov Grigory
The Russian Federation
62 373 018 65
Patras Holdings B.V.
Kingdom of Netherlands
60 628 482 48
Menkevicius Audrius
Republic of Lithuania
53 662 755 00
YIT Construction Ltd.
Republic of Finland
47 429 297 50
Republic of Malta
47 111 285 65
The Grand Duchy of Luxembourg
45 679 769 89
Kingdom of Denmark
42 643 126 68
Swedbank AB
GE Capital Global Finansial Holdings Inc.
DNB BANK ASA
Rugby Holding B.V.
European Bank for Reconstruction and Development
NEW EUROPE REAL ESTATE Ltd.
Boswell (International) Consulting Limited
Contaq Latvian Cable Holding S.a.r.l.
FRITRADE SE
In 2013 47.6 %, of capital, investments of the Riga municipality budget in
the sector structure were allocated for economical activities, the majority (90
%) were investments in the development of transport sub-sectors. The second
largest share was invested in the social security sector (20 %) and the third –the
education sector – 14.5 %. The dynamics of total capital investments of the city
in the recent years shows stable investment amounts of the municipality.
The Riga municipality has been active in implementing different projects
financed by the European Union funds. In order to implement such projects, in
2013 from the budget of Riga municipality 31.9 million lats were allocated. In
2013, the largest projects of the ERDF, the TRN-T and the Cohesion Fund of
the Riga municipality were the following:
● Reconstruction of Vienibas gatve (from Kaplava Street to Ozolciema Street);
● Reconstruction of Krisjana Valdemara Street and Daugavgrivas Street traffic junction;
● Integration of Riga city and port in the TEN-T road network: finishing the
research on the Riga Northern transport corridor;
Statistics of Lursoft. Foreign investments. Available at: www.lursoft.lv
39
The Economic Profile of Riga 2015
● Providing technical equipment corresponding to qualitative studying of
natural sciences in 63 general educations schools of Riga;
● Building the tourism potential of Grizinkalns cultural and historical heritage.40
It is expected, that the amount of investments in the economy of Latvia
will gradually increase in the future. However, the dynamics of the investing
process will be determined by the accessibility of financial resources, increase
of the overall demand and the implementation of state supported projects for
business promotion.
2.8.Creative industries in Riga
Due to the National Culture Policy Guidelines, creative industries have a
significant role in the development of culture; as a new economy sector it ensures use of cultural and artistic resources in creating products and services
with high added value.
Creative industries are defined as activities based on the creative work,
abilities and talent of an individual and that have the potential to make products with high added value creating and using intellectual property. Creative
industries include architecture, marketing, industries of art and culture, design
(including fashion, graphical design and applied arts), film, computer games
and interactive programs, music, new media, publishing, radio and TV.41
Referring to several international comparative researches, for future forecasts and existing state support instruments promoting effects, there are two
priority sectors of creative industry in Riga – design and audio-visual media
and multimedia that have the highest export potential. In the sectors of multimedia and audio-visual media the following enterprises are operating in Riga
– Lattelecom Technology, DD Studio, film studio Rija and others. In general all
creative industries have close link to other sectors, both in creative industries
and outside it; besides that, creative industries sector adds value to the urban
environment.42
Creative industry centres have established themselves in different quarters
of Riga; any of them is unique and with a positive influence on the urban environment – they have become an essential part of cultural and economical
development of Riga.
The largest and most well known creative industries in the city are:
● Andrejsala – home of innovation and creative industries, it forms the new
cultural environment in the city of Riga. The industry brings together professionals of different sectors – audio and visual arts, architecture, inThe Riga City Council Public Report 2013
40
41
42
The Ministry of Culture of the Republic of Latvia. Creative industries. Available at: www.km.gov.lv
The Riga Tourism Development Bureau. Creative Riga. Available at: www.liveriga.com
41
42
The Economic Profile of Riga 2015
formation technologies, and design and other sectors. In the future it is
expected that Andrejsala will enrich the spatial, public open space and
transport structure of Riga historical centre; becoming also an important
place for business, residence, tourism and entertainment.
● Spikeri – located next to the Central Market of Riga, it is the quarter of the
city and home for creative culture organisations, events of contemporary
music and cinema, art galleries, offices, cosy restaurants and cafes. Included in the UNESCO heritage list, the industrial aesthetics of territory of
Spikeri serves as an inspiration for the development of the whole quarter.
The territory becomes contemporary, modern and publicly accessible urban environment.
● Riga Film Fund is co-funded by Riga City and its aim is to promote foreign
film production in Riga and Latvia. Co-funding are intended for film projects co-produced by Latvia and foreign countries, planned to be filmed
in Riga or Latvia; attracting foreign investments, creating new job places,
developing national cinema industry and popularizing Riga in the world.43
● Kalnciema Street Quarter attracts visitors not only with the 18th/ 19th century wooden houses, but also with events, theatrical performances, films,
musical performances and markets.
● The Republic of Miera Street is a world of little shops, cafes, workshops
and other creative initiatives.44
● RISEBA, the largest media centre in the Baltic States, the home of architecture, art of audio visual media, culture, education and business.
● VEF creative quarter, where different art events – exhibitions, creative workshops, plays, concerts and others take place already from 2008. Currently
there are at least 20 artist workshops in this quarter.
● Tobacco factory that is an innovation centre of interdisciplinary education,
culture and business.45
The Riga City Council City Development Department. Portal: www.investeriga.lv
The Republic of Miera Street. Available at: www.mieriela.lv
45
Creative quarters in Riga. Available at: www.radosiekvartali.wordpress.com
43
44
The Economic Profile of Riga 2015
3.Business and Investment Environment
3.1. Legal Framework
The quality of the business environment is one of the most important elements for raising competitiveness of the country, and for the city, as well,
– better conditions state can ensure for entrepreneurs, the more investments
can be expected in the national economy, and that means new job places and
prosperity for its citizens. One of the main aspects of business environment is
the legal framework that can regulate the environment to the positive or negative direction. Not only legal documentation of the city, but also the national
and the European Union legal acts are relevant for entrepreneurs in Riga.
In Latvia the most common tool to assess the business environment is an
international study “Doing Business” carried out by the World Bank. In the
study of year 2014 among 189 countries Latvia is ranked on high the 24th
place and on the 9th place among member states of the European Union.1
The market of Latvia is a free market, and all interested parties, including
foreign investors, have equal rights to start a business in any city or populated area. General business regulatory normative acts apply to all companies
equally. The main normative acts are:
● The Commercial Law that defines who is a merchant, what is merchant
company, prescribes a procedure for registering a merchant and merchant
company in the commercial register;
● The Competition Law, the aim of which is to protect, to preserve and to
develop the free, fair and equal competition in all sectors of the national
economy in public interests by limiting market concentration obliging to terminate the prohibited activities and prosecuting perpetrators;
● The Law on Taxes and Fees that defines forms of taxes and fees and a
procedure for estimating, collecting, levying taxes and fees, and rights, duties and responsibilities of tax and fee payers and administration, taxpayer
registration procedure, as well as, an appeal procedure against decisions
on taxes and fees issues. The tax system in the country is structured dividing taxes in four types – national taxes and fees, municipal fees and taxes
defined in the laws and regulations of the European Union.
In the budget of Riga municipality the following taxes and non-taxes applicable to entrepreneurs in the city are included:
● personal income tax for employers registered in the administrative territory
of Riga for employees whose place of residence at the start of the tax year
Ekonomikas ministrijas 2013. gada publiskais pārskats.
1
43
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The Economic Profile of Riga 2015
was declared in the administrative territory of Riga;
● real estate tax paid by Latvian or foreign natural and legal persons who has
a real estate in their ownership or in legal possession;
● lotteries and gambling tax paid by capital companies that have, under the
statutory procedure, obtained a special permit (licence) to organise and
maintain lotteries and gambling;
● state fee for changes of last name, first name and nationality records in
person identification documents;
● state fee for registration, amendments and supplements of civil registration records;
● state fee for issuing special permissions (licenses);
● state fee for declaring domicile;
● municipal fee for trade in public places;
● municipal fee for keeping animals;
● municipal fee for receipt of official documents of the City Council and their
certified copies;
● municipal fee for placing advertisements in public places;
● municipal fee for maintenance and development of municipal infrastructure in Riga;
● municipal fees for construction works.
Other taxes applicable to entrepreneurs in the state, including the city:
● enterprise income tax, that is paid of the taxpayer’s taxable income –
a profit generated from business activities subtracting expenses related to
business activities;
● micro-enterprises tax;
● state social insurance mandatory contributions;
● natural resources tax;
● value added tax;
● customs duty;
● tax on cars and motorbikes;
● vehicle operating tax and company car tax;
● electricity tax.2
3.2. Business Start-up
To start a business, you need an idea and a plan how to realise it, only then
you can choose a business type corresponding to particular company idea
and to start registration procedure. Companies in Latvia are registered in the
Register of Enterprises.
Altogether in Latvia there are five legal forms of commercial companies, the
most common of them is a company with limited liability. According to Lursoft
data, by the first half of 2014 in Riga there are registered 6 635 companies, 6
Riga municipality portal: www.riga.lv; legislative web site Likumi.lv
2
The Economic Profile of Riga 2015
362 of them are companies with limited liability, 158 are individual merchants,
but 29 are joint-stock companies.3
Company registration process in Latvia is simplified, and – comparing to
other Baltic States, in Latvia there is the lowest number of procedures and the
lowest minimum share capital (1 EUR). Since 2012 the electronic registration
system in the Register of Enterprises is introduced via a portal www.latvija.lv,
where you can also declare amendments in registration data, information on
reorganization, liquidation and termination of the contract. Thus, Latvia has
considerably facilitated the commencement of the business.
3.3. Real Estate
One of the defining features of Riga development opportunities is its territorial
planning and the real estate of the city, and the market related to it. One of the
long-term objectives of Riga is “Opportunity city for everyone”, hence infrastructure and environment of the city is strategically planned for entrepreneurship. The
defined development directions of the city for functional use of the territory are:
● development of functions of capital city;
● development of municipal functions;
● development of business and office functions;
● development of commercial services.
To ensure above-mentioned directions, different types of functional objects
are needed.
In the market of office building facilities, in the first half of 2014 demand for
office premises in Riga has not considerably changed comparing to the beginning of the year. During this period there have not been also notable changes
of office rent fees. In several categories of office premises share of free facilities
has slightly increased. The most active office premises searchers were IT field
companies, legal service providers, education-related entities, as well as public organisations. The most requested are office premises in the active centre
of Riga and in high-quality office buildings in the neighbourhood of Duntes
Street, Skanstes Street, as well as near Pardaugava. Most of the demand is
formed by companies that need premises up to 200 m2 area large.
Rental fee of office premises, free space4
Category of office
premises
Rental fee,
EUR/m² per month
Rate
of free space
„Prime”
16–18
3%–5%
Class A
13–16
4%
Class B (centre)
10–13
7%
Class B (other)
8–11
20 %
Class C
4–8
20 % – 30 %
Lursoft statistics. Foreign investments. Available: www.lursoft.lv
Market review of trade premises in Riga. 2nd quarter of 2014. Available: www.latio.lv
3
4
45
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The Economic Profile of Riga 2015
In the second quarter of 2014 a range of rent charged for Class A office
premises was 13 to 16 euro for one square meter per month, Class B office
premises – 8 to 13 euro (Riga Centre – 10 to 13 euro, Pardaugava and other
territories outside the centre – 8 to 11 euro) for one square meter per month,
while Class C office premises – 4 to 8 euro for one square meter per month.
As indicated in the Riga Spatial Plan 2006 – 2018,5 the development of complex of Class A offices is planned in new development centres and in other particular areas – in Kipsala, Kliversala, Citadele, Andrejosta, neighbourhood of the
Central Station, and building zones of Hanzas street – Skanstes street centres.
In the segment of trade premises the largest activity is in the Old Riga and
in the active centre of Riga where number of unrented premises are small. In
recent years, in the centre of Riga share of free premises has decreased very
rapidly – at the end of 2009 25 – 30 % of trade premises were unused. The
demand tends to be segmented – lessees are choosing trade facilities in places with better pedestrian flow and closer to other successful merchants. The
most active facilities searchers in the Old Riga and in the centre of Riga are
restaurants and other catering businesses. For these lessees very important
factor is the ability to have an outdoor terrace. Overall, the most requested
premises are 50 – 100 m2 area large.
Rental fee of trade premises, free space6
Category of premises
Rental fee,
EUR/m² per month
Rate of free
space
The best trade premises in the Old Riga
40 – 70
0 %
Premises in active trading streets
15 – 25
10 %
In the Old Riga on streets such as Kalku Street, Valnu Street, Audeju Street,
as well as on some of the sections of streets in active centre rent of 50-100
m² area large premises in the 2nd quarter of 2014 was 40 – 70 euro for one
square meter per month. In the centre of Riga on the best commercial streets
– Terbatas Street, K.Barona Street in the direction from the centre to Gertrudes
Street, Brivibas Street till Lacplesa Street, Elizabetes Street between Brivibas
Street and A.Caka Street, in the neighbourhood of the railway station – rent
of 150 m² area large premises for the 2nd quarter were 15 – 25 euro for one
square meter per month. In suburbs in areas with high pedestrian flow rent of
good trade premises is 4 – 15 euro for one square meter per month.
In the segment of warehouses and industrial facilities, activity of lessees
and level of rent fee in the 2nd quarter of 2014 comparing with the first months
of the year has remained unchanged. The largest demand is for high-quality
warehouses and industrial facilities of the area up to 500 – 1000 m2. In general,
the offer corresponding to needs and requirements of lessees is limited.
The Riga Spatial Plan 2006 – 2018 with amendments
Market review of trade premises in Riga. 2nd quarter of 2014. Available: www.latio.lv
5
6
The Economic Profile of Riga 2015
3.4. Business Support Provided by the Municipality
One of objectives of Riga is to ensure that it is an opportunity city to anyone
regardless of different aspects (gender, age, nationality, etc.) – everyone can
fulfil their visions and dreams. To achieve that, the most important task is to
ensure adequate support from the municipality. Riga business environment
attracts active people and companies that by earning create workplaces, as
well as income for themselves and others.
The Riga municipality are implementing a range of activities to continually
support new and existing entrepreneurs, as well as creates favourable environment for development of enterprises. The management of the Riga City is
interested in creating new businesses; therefore, it informs and encourages
young people to start their own business. In 2014 different types of support
tools and documents were used, that contributed to the emergence of new
enterprises and the development of existing ones, thus creating an innovative,
open and exportable economy in the city.
In the Riga Development Programme for 2014 – 2020 a favourable business environment and high economic activity is defined as one of development
directions. As it is indicated in the programme, the municipality has identified a
variety of tasks to achieve the goal – cooperation with scientific and business
sectors will be strengthened for innovation development where municipality
will take the role of mediator. Also, the municipality will continue to provide
support for implementation of new business ideas in the city and will seek cooperation opportunities with partners interested in the growth from public and
private sectors. Since previous experience shows the lack of territory and facilities suitable for industrial manufacturing in the city, the municipality will also be
actively involved in initiatives that focus on development of industrial areas in
its territory. To strengthen the international competitiveness of Riga, activities
that focus on international business attraction to Riga will be continued, using
the already existing experiences, and the cooperation with international organizations, as well as seeking new opportunities for the promotion of the city.7
In the Riga Spatial Plan 2006 – 2018, policy of using the territory of the city
is defined, and hence also the possibilities for entrepreneurs developing their
activities in most appropriate areas in the city.
In the Sustainable Development Strategy of Riga until 2030 it is defined
that pillar of the economy of the city is the following priority sectors: a port,
the chemical industry, computer technologies, manufacturing of electronics,
professional, scientific and technical services, metalworking industry and mechanical engineering, transport and logistics, tourism and education. The economic trends of the city suggest that particular attention should be paid to
efforts to increase the added value of manufacturing – export of high added
Development Programme of Riga 2014 – 2020.
7
47
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The Economic Profile of Riga 2015
value industrial production ensures multiplicative effect to economic development of the city and the state overall.8
The Riga City Council, in cooperation with Swedbank, in 2009 has developed
a grant programme “Atsperiens” (Take-off) aiming to promote the development
of small and medium-sized enterprises, to motivate emigrated people of Latvia to
return to Riga, as well as to speed up reaching the European Union welfare level.
Regarding the grant programme “Atsperiens” it is possible to receive co-financing of 80% for covering various expenses of new merchants – for purchasing
specific technical equipment and licences, accounting and legal – consultant service fees, web site development, specific employees’ training, elaboration of marketing materials, costs of rent and improvements of premises, etc. The maximum
grant available for one merchant is 15 000 euro. Twice a year, an open call of the
tender is organised to determine economically viable and innovative businesses
ideas in Riga. In 2014 the total funding of the grant reached 140 000 euro. So far
12 open calls have been organised, in total 1 118 business ideas were submitted
and support has been granted to 105 companies for more than 760 000 euro.
Since the 10th open call the mentor club of the programme “Atsperiens” has
been launched, where winners of the previous tenders share their experience
with emerging entrepreneurs, by telling about the business development process
methods, challenges, achievements, lessons learned and errors made.9
www.liveriga.lv
www.investinriga.com
One of the leading and priority sectors in Riga is tourism, therefore a project
with the brand name Live Riga was developed, whose main task is to promote the business cooperation and exchange of information with the citizens
and guests of Riga. During the project implementation the web site www.investinriga.com was created; the Riga City Council continues to maintain it and
updates the information on the economic accessibility of the city to local and
foreign investors – all the information you need about the city as an attractive
investment destination, including data on economic and market dynamics,
and the availability of labour force, advantages and business support programmes, as well as it advices companies on development opportunities and
possibilities to attract investors.10
To facilitate collaboration between the municipality and entrepreneurs, as well
as the development of priority sectors, the contact with industry associations
Sustainable Development Strategy of Riga until 2030.
The Riga City Council City Development Department. Portal www.investeriga.lv
10
The Riga City Council City Development Department. Portal www.investeriga.lv
8
9
The Economic Profile of Riga 2015
and business associations have been constantly maintained. The municipality
also periodically participates in various level and type of exhibitions and business promotion events. The most important event of industrial manufacturing
in the Baltic region is an international exhibition of engineering, metalworking,
automation, electronics, electrical engineering, tools and new technologies Tech
Industry that takes place in 2014 in Riga International Exhibition Centre Kipsala.
In 2014 the MIPIM event will take place in Cannes, France for the 25th
time; it will be attended by the most important real estate market participants
of the world – starting from the territory development concept experts up to
investors and project users. It is a precious opportunity to get acquainted with
investment opportunities and development projects around the world, as well
as with members, partners, and potential capital sources.11
For a long time the Riga City cooperates with the foundation The Riga Brand,
whose trademark is officially registered as belonging of the city; it is given only
to the high-quality products and services. Its aim is to promote products in the
priority export markets of Latvia (Russia, Ukraine, Belarus, Sweden, United
Kingdom, etc.), thus giving a trademark-using companies and service providers more opportunities for export development. Partners and participants of the
foundation are one of the most successful and innovative companies in Riga that
by their work improve export and economic indicators of Latvia.12
The Riga municipality actively cooperates with the Latvian Investment and
Development Agency, thus contributing to development of entrepreneurs, cooperation with foreign investors, as well as, establishment of new companies. In the
Riga region there are also business incubators established; one of those – a creative industry incubator “Creative Andrejsala” promotes the emergence of new
products, general growth and increase of export of creative industry in Riga.13
3.5. Business Support Institutions
Beside municipal services and support activities, entrepreneurs have opportunity to cooperate with many other public and private support institutions
in Riga that provide various support services for entrepreneurs and investors in
Riga or represent their business interests in the city and beyond it.
The Investment and Development Agency of Latvia (LIAA) is the globally
competitive organization that managed to attract dozens of million euro of
direct foreign investments to Latvia, to conclude export transactions for several dozens of millions euro and to create hundreds of new job places, also
managed to promote the development of industrial parks, establishment of
new research laboratories, as well as collaboration in the field of technology
transfer. LIAA is one of the organizations where entrepreneurs have possibility
to attract co-financing of the European Union for their development. It offers a
The Riga City Council City Development Department. Portal www.investeriga.lv
The Business club “The Riga Brand”: www.rigamark.com
13
“Creative Andrejsala”: www.csala.lv
11
12
49
50
The Economic Profile of Riga 2015
very wide range of services, including a variety of free of charge seminars for
business development, fundraising, export opportunities, and more.14
State owned JSC “Latvijas Attīstības Finanšu institūcija Altum” (Latvian development financial institution Altum) offers a wide range of services for entrepreneurs, main support providing to those directions that contribute to the
development of the national economy and create added value. Within support
programmes implemented by ALTUM, funding can be received by business
start-ups, as well as by experienced entrepreneurs who want to develop and to
increase business competitiveness, as well as by farmers for various needs.15
Connect Latvia is an association that connects entrepreneurs with inventors and investors to create and to develop new and innovative companies in
Latvia. The Association aims to promote establishment and development of
new and innovative businesses, as well as to support commercialisation of innovative projects, thereby facilitating creation of new and well-paying job places in the knowledge-intensive industries. The Association organizes different
measures that help entrepreneurs to receive the assistance necessary for the
implementation of the business plan, offer mentoring services and organize
new contacts stimulating measures.16
Creative Andrejsala is a business incubator, where creative industry entrepreneurs up to two years of age can receive support. The incubator offers co-financing for renting premises, services and research, new networking, etc.17
TechHub Riga supports new entrepreneurs of information technology industry,
subsidizing job places, training, providing mentoring services, promoting and organizing new contacts with industry experts and investors motivating measures.18
The Young Entrepreneurs Centre is a foundation whose aim is to promote
the development of entrepreneurship in Latvia, to provide professional advice
to emerging entrepreneurs during the period of establishing a new business.
To achieve that, it offers a number of activities – training, individualized counselling and thematic seminars for young entrepreneurs.19
The Latvian Technological Centre provides consulting, research services,
organizes seminars, ensures soft landing services, as well as processing of
foreign and local business technology requests and helps enterprises to seek
new solutions. The aim of the Centre is to promote development and international cooperation of technology-driven small and medium-sized enterprises,
through using more than 20 years of experience in business incubation, transfer of technology, commercialization of knowledge, establishing international
business contacts, development of training programmes, evaluation of innovation systems and elaboration of different level innovation strategies.20
The Investment and Development Agency of Latvia: www.liaa.gov.lv
State owned JSC “Latvijas Attīstības Finanšu institūcija Altum” (Latvian development financial institution Altum): www.hipo.lv
16
The association “CONNECT Latvija”: www.connectlatvia.lv
17
“Creative Andrejsala”: www.csala.lv
18
TechHub Riga: www.techhub.com
19
The Young Entrepreneurs Centre: www.juc.lv
14
15
The Economic Profile of Riga 2015
The Latvia Technology Park is an association that organizes various seminars, consultancies, including on business optimization matters, as well as
processes technology demand or supply using science network. Support is
available for technical companies.21
Business incubators of higher education institutions offer for students of
the University of Latvia, the Riga Technical University, the Riga International
School of Economics and Business Administration and the Turiba University to
develop and to realise their ideas subsidizing premises, training and providing
mentoring for them.22
The Stockholm School of Economics in Riga Mentor Club, where mentors
work individually with each interested enterprise, thus assessing its business
activities, problems and potential opportunities for development, provide advice and recommend specific actions for the development of their business.
Mentors are highly qualified professionals working in different sectors.23
The Innovation Centre of the University of Latvia aims to promote the involvement of the University of Latvia as an innovation partner in the development of knowledge based economy in Latvia, providing collaboration possibilities between researchers of the University and companies aimed at applying
knowledge, technologies and research competencies, and also at commercialisation of individual research results.24
The Medical Engineering Innovation Centre of Riga Stradins University
aims to support and to promote the development of innovative and knowledge-based businesses in Latvia in the area of the designing medical appliances and related industries, as well as to promote the commercialization
of the research results carried out by Latvian scientists. The Centre offers to
young entrepreneurs the expert advice on issues related to new product technological development processes and the use of various specific equipment
(digital oscilloscope, multimeter, a programmable power supply, etc.), as well
as provides possibility to use office premises with modern office equipment.25
The Riga Innovation Incubator aims to promote the formation and development of new innovative businesses, by providing the necessary support
for new business start-ups. The activities of the incubator are mainly focused
on offering comprehensive solutions to new businesses to ensure that technological developments and innovative ideas would gradually result in a final
product with a high added value. The amount of support depending on the
age of the company is up to 90 %.26
Latvian Chamber of Commerce and Industry is a voluntary, politically neutral
association, which brings together micro, small, medium-sized and large enThe Latvian Technological Centre: www.innovation.lv
The Latvia Technology Park: www.ltp.lv
22
Motivation Programme of Innovative Business of the Investment and Development Agency of Latvia. Innovation portal www.innovativelatvia.lv
23
The SSE Riga Mentor Club: www.mentoruklubs.lv
24
The Innovation Centre of the University of Latvia: www.lu.lv
25
The Medical Engineering Innovation Centre of Riga Stradins University: www.rsu.lv
26
The Riga Innovation Incubator: www.rtu.lv
20
21
51
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The Economic Profile of Riga 2015
terprises representing various economy sectors across Latvia. It works in three
spheres: the business environment, competitiveness of companies and export.27
The association “Lidere” is an organization that brings together women of
Latvia –entrepreneurs and professionals in their area. Its aim is to activate the
mentoring movement in Latvia, to support emerging and existing female entrepreneurs in the cities and in rural areas of Latvia, to increase the share of
women who start up companies and create new job places, to provide freely
accessible information and consulting opportunities.28
3.6. Opportunities for Mutual Business Cooperation
The business collaboration is promoted not only by above mentioned state
and local institutions, but also by specially established associations, centres and
federations with the aim to provide assistance for various types of matters, to
represent interests of entrepreneurs, to make new contacts and cooperation.
Active, knowledgeable and professional people who are interested in developing
a specific industry in Riga and in the country as a whole are working in such institutions; their main mission is to identify the real situation in the sector, as well as
existing problems and circumstances hindering development, and to take all the
necessary and available measures to prevent them, also to participate in political
affairs defending interests of the industry enterprises. With their activities associations contribute to the sustainable economic development of the country.
In Riga, there are dozens of different industries associations and majority of
companies work in a respective business association that has knowledge of
a specific area and assists in development of the particular enterprise and the
industry as a whole.
The Latvian Business Development Centre is an association of companies
that provides a comfortable platform for companies of Latvia where to organise
cooperation, to communicate and to agree on common objectives to be attained, where to receive the necessary information for business development,
to find cooperation partners for joint projects, as well as to receive professional
expert advice in export, marketing, finance, human resource management and
other areas. The Centre was formed aiming to provide support for strengthening business environment and for raising competitiveness of local companies
in the local market and abroad.29
The Association of Small and Medium Enterprises of Latvia was established
with the aim to defend interests of micro, small and medium-sized enterprises
in relation to insufficient support of different aid instruments particularly for
existing successful companies, as well as, insufficient support for new companies. One of the objectives of the Association is building a dialogue with representatives of various national institutions to defend the interests of SMEs.30
The Latvian Chamber of Commerce and Industry: www.chamber.lv
The association “Lidere”: www.lidere.lv
29
The Latvian Business Development Centre: www.luac.lv
30
The Association of Small and Medium Enterprises of Latvia: www.lmvasociacija.lv
27
28
The Economic Profile of Riga 2015
Nozaru asociācijas
The main activity directions of the Association of Latvian Chemical and Pharmaceutical Industry is participation in elaboration of
proposals for industry business development
concept and strategy, in elaboration and improvement of the industry legislation providing position on state institutions developed
legislative projects, as well as, representation
of interests of members of the association in
state and local institutions, and in relations
with employees’ organizations (trade unions)
and other legal and natural persons, and promotion of the Association and its members
for raising their prestige in Latvia and abroad,
participation in development of vocational
education and training system of industry
professionals, etc. Members of the Association are leading and largest companies in the
sector.31
The Baltic Association – Transport and
Logistics was established to participate in
development and adjustment of the transit
policy in Latvia and in the European Union,
to represent the interests of the industry in
the political process and business interests
in relations with state and local institutions,
to create and to strengthen cooperation with
institutions and organizations in countries
where main shippers are operating, etc. The
association represents common interests of
transport and stevedore companies in business relations with the state, municipalities
and their institutions, including the Freeport
management, in order ultimately create a
long-term transit industry development policy in Latvia.
The Association of Electricians and Energy Engineers of Latvia unites both legal and
natural persons who work in the industry. The
aim of the association is to unite its members in order to promote the comprehensive
development of Latvian electrical power and
energy engineering industry according to the
latest world standards and common technical policy, to ensure successful work of its
members in labour market of electrical power
and energy engineering industry and to protect their material and moral interests and to
promote the work of members of the Associations and to raise its prestige.32
The Latvian Information and Communications Technology Association brings together
organisations and individual members who
work in the industry. The Association represents members’ interests both in the legislative field, and actively responding to current
events in Latvia, and serves as an industry
representative on the international circuit. Its
aim is to promote the development of the
sector and to increase its competitiveness.33
The Latvian Traders’ Association brings
together more than 600 companies whose
main business is trade, catering and services. Its mission is to promote the development of its members.34
The Latvian Electrical Engineering and
Electronics Industry Association unites companies, research and educational institutions
registered and operating in Latvia and related to industry of electronics and electrical
engineering, optical equipment, information
technologies and electronic communications
equipment, defence equipment, aviation and
space technologies, in order jointly define
and defend their interests, as well as promote industry consolidation, development
and promotion.35
The Latvian Association of Light Industry
Enterprises aims at promoting the development of industry companies facilitating their
entering in new markets and participation in
exhibitions, organising mutual cooperation,
training for industry professionals, helping to
establish contacts with entrepreneurs of other countries, defending interests of industry
companies in national and international institutions, as well as in the Textiles Committee
of the European Union, regularly analyzing
changes in the textile and clothing export and
import per product group and per country, as
well as issuing permissions (licenses) to companies confirming that an exported product
was produced in the Republic of Latvia.36
Latvian Forest Industry Federation aims
to promote the development of the forest
industry in Latvia, in cooperation with interested entities, to build a sustainable, stable
economic environment for development and
The Association of Latvian Chemical and Pharmaceutical Industry: www.lakifa.lv
The Association of Electricians and Energy Engineers of Latvia: www.bleea.lv
33
The Latvian Information and Communications Technology Association: www.likta.lv
34
The Latvia Traders’ Association: www.lta.lv
35
The Latvian Electrical Engineering and Electronics Industry Association: www.letera.lv
31
32
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competitiveness of forest industry companies
and to ensure international representation of
interests of Latvian forest industry, as well as
development and coordination of activities of
the Association.37
The Association of Mechanical Engineering and Metalworking Industries of Latvia
unites entrepreneurs, professionals of the industry and other interested natural and legal
persons to promote the development of the
sector, to facilitate mutual cooperation and
professional growth of industry experts.38
The Latvian Builders’ Association works
to unite construction professionals for successful and sustainable development of
the construction industry in Latvia and also
abroad. An aim of the Association is to consolidate and to protect interests of its members in labour market of the construction industry, in economic matters and in relations
between employers and employees, as well
as in relations with customers. Tasks of the
Association include active participation in
elaboration of proposals for industry development concepts and strategies, in development of vocational education system of
industry experts, as well as in the preparation
and development of industry legislation.39
The Association of Hotels and Restaurants of Latvia is an association that brings
together accommodation and catering companies for professional collaboration. A mission of the association is to improve the quality of customer services, to improve Latvian
hotel and restaurant market and to represent
the Latvian hotel and restaurant business
globally.40
The Latvian Federation of Food Companies unites food companies and professional
associations, represents manufacturers in
national and non-governmental organisations, and defends interests of members in
elaboration of the nation and international
normative acts, as well as provides informative support for members of the Federation.
The Federation unites companies which take
up to more than 60 % of all Latvian food market. It is represented by industry associations
and several dozens of large, medium and
small companies. The aim of the Federation
is successful and sustainable development of
food processing industry in Latvia and high
competitiveness of Latvian food manufacturers’ in foreign markets.42
The Association of Latvian Printing Companies brings together 46 legal persons
whose business is related to the printing industry: the production of printed products,
trade of printing equipment and materials, industry vocational and continuing education.
An aim of the Association is to represent the
common interests of members of the Association, to promote development of printing
industry in Latvia, to create a favourable
public opinion about printing industry, and
to promote the printing industry education in
the country.43
The Association of Latvian Travel Agents
and Operators is a professional public organization that brings together tourism agents
and operators in order on the basis of equality within the laws and the statutes of the Association to form a common governing body
that would coordinate travel agents and operators, defend their interests and represent
Latvian tourism business globally.41
The Latvian Association of Light Industry Enterprises: www.atci.lv
The Latvian Forest Industry Federation: www.latvianwood.lv
38
The Association of Mechanical Engineering and Metalworking Industries of Latvia: www. masoc.lv
39
The Latvian Builders’ Association: www.latvijas-buvnieku-asociacija.lv
40
The Association of Hotels and Restaurants of Latvia: www.lvra.lv
41
The Association of Latvian Travel Agents and Operators: www.alta.net.lv
42
The Latvian Federation of Food Companies: www.lpuf.lv
43
The Association of Latvian Printing Companies: www.lpua.lv
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3.7. International cooperation opportunities
Latvia is a country with a high human development index and is rather
developed country at global level, as well as is a rightful member state of economic and political international organizations. Responsible representatives of
the state actively participate in various decision preparation and decision making processes, including processes related to entrepreneurship, investments
and innovations. Latvia is a member state of 15 international organizations.
The Republic of Latvia has 44 diplomatic and consular representations: 35
embassies, 6 permanent representations, 1 consulate general and 2 consulates. In 2014 Latvia has 168 honorary consuls and 16 honorary consuls general
in foreign countries.
In Riga there are branches, representative offices and headquarters of several world organizations:
● The European Commission Representation, that is a part of the Directorate-General for Communication of the European Commission;
● The European Parliament Information Office;
● The Body of European Regulators for Electronic Communications (BEREC);
● The Nordic Council Ministers’ Office;
● The International Organization for Migration;
● The United Nations House, which is also a home for representations of the
International Organization for Migration and the World Health Organization;
● The European Investment Fund;
● Culture centres and institutes of several countries.
In addition, the Riga municipality is a collaborative partner and also regularly
participates in the following international organizations and institutions:
● Baltijas The Baltic Metropolises Network (BaltMet);
● The Union of the Baltic Cities (UBC);
● The European Edge Cities Network (Eurocities);
● The Network of European Metropolitan Regions and Area (METREX);
● The European Committee on Local and Regional Democracy (CDLR);
● The Congress of Local and Regional Authorities of the Council of Europe
(CLRAE);
● The association on sustainable local energy policy promotion of European
cities (Energy-Cities);
● The European city network “Cities for Children”;
● The Union of Capitals of the European Union (UCEU);
● The Committee of the Regions of the European Union (CoR);
● The United Nations Educational, Scientific and Cultural Organization
(UNESCO);
The Ministry of Foreign Affairs of the Republic of Latvia. Embassies and representations. Available: www.mfa.gov.lv
44
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● The European Association for Hydrogen and fuel cells and Electro-mobility
in European Regions (HyER)
● Modern Alliance of Hanseatic cities (Städtebund DIE HANSE).
● The European peoples’ culture and art festival Europeade;
● International Council for Local Environment Initiatives (ICLEI);
● The Organization of World Heritage Cities (OWHC) and other organisations.
In 2013 the Foreign Affairs Office of the Riga City Council coordinated and
organized 170 foreign mission visits of Riga City Council officials and employees and ensured 33 receptions of foreign delegations and groups in the Riga
City Council, as well as provided support for events of different types and
importance in Kobe, Moscow, Beijing, Berlin, Yerevan, Minsk, Norrkoping, Aalborg, Tbilisi, Pori, Rostock, St.Petersburg, Bordeaux, Suzhou, Tallinn, Vilnius
and in other cities – it generally promotes new networking and cooperation
opportunities for entrepreneurs.45
The Nordic Council of Ministers (NCM) is a part of the Secretariat of the
Nordic Council of Ministers in Copenhagen, whose mission is to promote cooperation between Nordic countries and Latvia. NCM Office in Latvia closely
cooperates with national and non-governmental institutions and the Nordic
diplomatic missions, in order to implement the common Nordic initiatives.
NCM Office in Latvia promotes and implements projects related to the Nordic
countries, and perform a wide range of Nordic and Baltic cooperation. The
Office also serves as the administrator of projects, including the Nordic and
EU projects or joint Nordic-Baltic projects and is responsible for practical work,
and quality assurance.46
In the first half of 2015 Riga will be the national capital city of the Latvian Presidency of the Council of the European Union. Latvia overtakes the Presidency
from Italy and will pass it to Luxembourg. The Presidency will turn increased
attention to Latvia and Riga. It is envisaged that in 2015 25 000 visitors from
all over the world, including approximately 700 international journalists, will visit
Riga. During the Presidency around 200 events of different levels (including,
the Eastern Partnership Business Forum, the Fifth Meeting of Ministers of Education, etc.) will be organized in Latvia and Riga, whereas around 1 500 meetings will be organized in Brussels and Luxembourg. The main venue for the
events will be the National Library of Latvia that also corresponds to one of the
themes of the Presidency for promoting opportunities of information society
and digital technologies for future development of the EU. The Presidency will
give new opportunities for Latvian entrepreneurs to build business contacts, to
attract investments, as well as to advertise their goods and services.47
Riga Municipality Annual Report 2013.
The Nordic Council of Ministers: www.norden.lv
47
The Secretariat of the Latvian Presidency of the Council of the European Union: www.es2015.lv
45
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The Economic Profile of Riga 2015
The largest companies of different countries and representing industries that
have made considerable investments in Latvia are united in the non-governmental organization – the Foreign Investors’ Council (FICIL). Apart companies,
the council members are also representatives from nine national chambers
of commerce in Latvia. The FICIL is currently represented by 22 companies
whose direct investments in core capital of enterprises registered in Latvia is
amounted approximately 40 % of total foreign direct investments in Latvia.
An aim of the council is to promote the Latvian business environment and to
facilitate foreign investments in Latvia.48
The Investment and Development Agency of Latvia (LIAA) not only cooperates with state and municipal authorities favouring the development of entrepreneurship in the domestic market, but also is active in foreign marketing and
in European business support network events. As its main task LIAA considers
raising competitiveness of Latvian enterprises that is especially relevant since
accession of Latvia in the European Union and integration within European
common market. The agency disseminates information abroad about Latvian
economy, industries, companies, projects, products, and services, organizes
visits of enterprises abroad during visits of senior officials, business days, trade missions and business contact exchange, as well as ensures search of
potential cooperation partners abroad, establishes contacts and arranges business visits of potential partners and investors.49
Already now Riga is considered as a major cross point between the West
and the East, as not only local and national level, but also international level business events of different sectors and types are organised here. In perspective
centralized offices of various institutions operating at the European Union, the
Baltic States, and the Nordic and Russian markets could be located in the city.
The Foreign Investors’ Council in Latvia: www.ficil.lv
The Investment and Development Agency of Latvia: www.liaa.gov.lv
48
49
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Useful information
Government institutions
www.am.gov.lv
The Ministry of Foreign Affairs of the Republic of Latvia
www.em.gov.lv
The Ministry of Economics of the Republic of Latvia
www.liaa.gov.lv
The Latvian Investment and Development Agency
www.ur.gov.lv
The Register of Enterprises of the Republic of Latvia
www.varam.gov.lv
The Ministry of Environmental Protection and Regional Development
of the Republic of Latvia
www.vid.gov.lv
The State Revenue Service of the Republic of Latvia
Institutions of the Riga Municipality
www.riga.lv
The Riga municipality
www.rdpad.lv
The Riga City Council City Development Department
www.investinriga.com The Riga City Council City Development Department
www.rpbv.lv
The Riga City Building Authority
www.liveriga.lv
The Riga Tourism Development Bureau
Industry associations
www.chamber.lv
The Latvian Chamber of Commerce and Industry
www. masoc.lv
The Association of Mechanical Engineering and Metalworking Industries of Latvia
www.alta.net.lv
The Association of Latvian Travel Agents and Operators
www.atci.lv
The Latvian Association of Light Industry Enterprises
www.bleea.lv
The Association of Electricians and Energy Engineers of Latvia
www.ficil.lv
Foreign Investors’ Council
www.lakifa.lv
The Association of Latvian Chemical and Pharmaceutical Industry
www.latvianwood.lv
The Latvian Forest Industry Federation
www.latvijas-buvniekuasociacija.lv
The Latvian Builders’ Association
www.letera.lv
The Latvian Electrical Engineering and Electronics Industry Association
www.lidere.lv
The association “Lidere”
www.likta.lv
The Latvian Information and Communications Technology Association
www.lmvasociacija.lv The Association of Small and Medium Enterprises of Latvia
www.lpua.lv
The Association of Latvian Printing Companies
www.lpuf.lv
The Latvian Federation of Food Companies
www.lta.lv
The Latvian Traders Association
www.luac.lv
The Latvian Business Development Centre
The Economic Profile of Riga 2015
Riga City Council City
Development Department
Amatu street 4, Riga, LV-1050, Latvia
Telephone: +371 67012947
[email protected]
www.rdpad.lv
@rdpad
RDPilsetasattistibasdepartaments
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