Attractiveness of Latvia for financial institutions
Riga, the capital of Latvia, is well suited for international financial institution operations. Being part of the euro area, Latvia provides financial as well as regulatory and legal certainty. More than 20 local credit institutions and foreign bank branches operate in Riga; majority of them focus on servicing international clients, thus having made Riga a regional financial centre for the last two decades.
According to the Global Financial Centres Index, Riga ranks among the TOP 3 cities in Eastern Europe. The advantages of establishing financial operations in Latvia are as follows:
- Governance: As a member of the EU, euro area, OECD and NATO, Latvia is deeply integrated in the international community and committed to high standards in terms of economic policies and governance. According to 2016 International Tax Competitiveness Index, Latvia has the 3rd best tax code among OECD countries.
- Labour: The combination of flexible labour markets, relatively low labour costs and educated labour force provide cost efficient solutions for international financial institutions. For instance, a UBS Prices&Earnings study shows that an average worker’s net salary in Riga is 17.1% of the level of that earned in NY; to compare, in London it is 72.3%. The latest English Proficiency Index (English language skills among adults) Latvia ranks 22nd out of 70 countries
- Experience and financial infrastructure: Latvia has created modern and effective financial regulation and infrastructure. Apart from providing real-time gross settlements in euro, the central bank maintains a retail payments system currently being upgraded to be able to process instant payments in 2017 and to create a Baltic financial infrastructure hub in Latvia.
- Innovation: Financial institutions that are open-minded towards financial innovation will find Latvia an attractive hub of fintech startups, which have emerged here due to a combination of excellent IT infrastructure, lower labour costs, access to highly skilled talent from a developed financial industry, and supportive regulatory framework. Latvia is the 1st to have adopted an innovative new law to support and promote start-ups through a number of tax relief measures.
- Communications: Latvia is ranked 5th globally in terms of 25 Mbps broadband adoption rate with average internet speed of 16Mbps, which again is the 7th highest in the world. Among OECD countries, Latvia has the 3rd highest percentage of fibre connections in broadband subscriptions: 59.7% compared to the OECD average of 17.9%. Internet in Latvia is not only fast but secure – data processing centre “Dattum” operated by Lattelecom and conforming to Tier III standards, is the most secure in the Baltics and Northern Europe region. In short – Latvia has one of the best communication infrastructures in the world enabling creation of efficient and advanced ITC systems.
- Proximity: The time zone difference with London is just 2 hours. Riga is the regional air hub (60+ destinations can be reached by direct connection) and is a mere 2-hour direct flight away from most of the European capitals including London, which services Riga with daily direct flights from Gatwick, Luton and Stansted.
- Quality of life: Riga is the biggest city in the Baltic region, offering:
- education infrastructure – international schools in English, French, German, technical schools, universities;
- gourmet restaurants and cafes;
- vibrant cultural life and entertainment – Opera, theatres, clubs, etc;
- beach life (Latvia has 500 km of white sandy beaches), golf courses, yachting, tennis, fishing, hunting, bird watching and many other opportunities;
- numerous spas, saunas and traditional bath (pirts) culture.