With the aim of ensuring faster assessment of investment projects in sectors where high value-added investment projects are to be implemented, the government and Investment and Development Agency of Latvia have agreed on the introduction of a “Green Channel” procedure to reduce bureaucratic burdens.
The regulations of the Cabinet of Ministers “Regulations on the servicing of priority investment projects” determine the priority project sectors, qualification criteria and project approval procedures, as well as regulate other issues in order to promote the development of perspective projects.
The sectors that will be serviced in order of priority and on time are:
- knowledge-intensive bioeconomy;
- biomedicine, medical technologies, pharmacy;
- photonics and intelligent materials, technologies and engineering systems;
- smart energy and mobility;
- information and communication technologies;
- operation of international business service centres and provision of services;
- as well as construction, transport and logistics related to the implementation of the mentioned priority projects.
To ensure that the support is used effectively, the regulations provide qualification criteria for the selection of innovative projects. The following priority investment projects will be considered under the accelerated “Green Channel” procedure:
- clearly defined amount of investments - 5 million euros (10 million euros in Riga);
- newly created job posts - 75 job posts (in Riga - 100 jobs), or 50 new job posts (in Riga - 75 new job posts), providing that salary is at least the average salary in Latvia in the previous calendar year multiplied by a coefficient of 1.5 (in Riga - the average salary in Latvia multiplied by a coefficient of 2). This means that the company must ensure a salary of at least EUR 1,720.5, while in Riga - EUR 2,294.00;
- export volume - 3 million euros (in Riga - 5 million euros) or replacement of imported services/goods in the value of EUR 500 000.00;
- investments in research, development and staff training in the three-year period after the implementation of the investment project - at least 250 thousand euros;
- clear business plan and project description;
- confirmation of available financial resources for project implementation;
- a statement that the company's tax debt does not exceed EUR 1,000 and it is not insolvent.
The measures taken to limit the spread of Covid-19 affect the ability of businesses to successfully implement projects thus also having consequences for the economic development of the country. The aim of the new regulations is to promote the growth of private investment by facilitating the coordination of activities necessary for the implementation of the investment project.
LIAA, based on the assessment of the information submitted by the company, will adopt a decision to approve the compliance of the investment project with the priority status or to reject the company’s application. LIAA informs the responsible administrative institutions and individuals who are involved in the provision of services in performing public administration tasks about the adopted decision, including the coordination of the activities required for the implementation of the investment project.
The appendix to the Regulations specifies public administration services and cases when the provision of the service is provided faster. For example, in ordinary situations, the institution must take a decision to issue an administrative act within one month of receiving the application or it may be extended to four months. The priority rules stipulate that this period may not exceed half of the maximum period laid down.
Also, the duration of decision-making on visa applications and document checks has been halved. It is expected that services listed in the regulations will be updated periodically, thus companies will have the opportunity to receive public administration services as a matter of priority.The submission of applications for companies will start on March 1, 2021.
The BDO Law team has gained considerable experience in advising clients on various business reorganization and development issues, that will provide timely and accurate support for the preparation and submission of the necessary documentation for your company to use the opportunities provided by the “Green Channel”.