More information about available support

Beneficiary

  • A capital company registered in Latvia with high growth potential, the core business whereof is related to the designing, production or development of scalable business models and innovative products;
  • has no tax debts exceeding EUR 150;
  • is not declared insolvent;
  • de minimis support is available;
  • is not under sanctions;
  • has not provided false information under the support programme;
  •  has received an investment or is carrying out the designing, production or development of an innovative product;

When applying for HQE support, additionally:

  • corresponds to the status of a micro, small or medium-sized enterprise (SME);
  • actions are implemented in the RIS3 area;
  • is not subject to the exclusion rules of the project applicant – https://likumi.lv/ta/en/en/id/331743
     

Available support

For attraction of highly qualified employees (HQE)

A start-up may receive support up to 45% of the eligible costs for the hours actually worked by the employee during the whole support period (working hours) to achieve the results planned in the application, where the rate of eligible costs per hour (rate) is set according to the Single Unit Standard Rate List – PDF (in Latvian).

Only RIS3 activities are eligible for support – https://www.liaa.gov.lv/lv/ris3/aktualitates

RIS3 areas are biomedicine, medical technologies, pharmaceutics; information and communication technologies; photonics, smart materials, technologies and engineering systems; knowledge-intensive bio-economics; smart energetics and mobility.


Formula for calculating support

Amount of support = 45% x (rateemployee1 x hours of workemployee1 +rateemployee2 x hours of workemployee2+ .....)


Tax incentives

For employees for whom support is applied, a start-up shall:support:

  1. pay reduced Mandatory State Social Insurance Contributions (MSSIC) or a fixed payment (2 x minimum monthly salary x MSSIC rate) every calendar month during the support period;
  2. be entitled not to pay personal income tax (PIT) if it has been indicated in the application;
  3. make additional mandatory contributions to state pension insurance or to a private voluntary pension scheme at least equal to – (gross monthly salary – 2 x minimum monthly salary) x 10%.

Formula for calculating support

Amount of support = (MSSICto be calculated + PITto be calculated – fixed payment - PITactually psupport) x support period in months

 

Non-supported sectors and activities

The sectors referred to in Article 1(1) of the Regulation No. 2023/2831 are not eligible for support – https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R2831

Restrictions affect fisheries, aquaculture, primary agricultural production and processing, and trade, as well as export measures to third countries or import substitution.

Support for attracting highly qualified employees (HQE):

  • cannot be received for activities in the sectors listed in Annex 2 to the Cabinet Regulation No. 644 – likumi.lv (in Latvian)

Based on the NACE Classification, Section G "Wholesale and retail trade; repair of automobiles and motorcycles" (except Group 45.2 "Maintenance and repair of automobiles"), Section K "Financial and insurance activities", section L "Operations with real estate", Section 77 "Rental and operating leasing", Section R "Art , entertainment and recreation" and Chapter 92 "Gambling and betting".

Restrictions apply to nuclear power plants, investments to reduce greenhouse gas emissions, the tobacco sector, investments in airports, investments in landfills and residual waste treatment, fossil fuel-related investments, investments in gas distribution and transmission, and investments in vehicles.

  • cannot be received for the activities listed in Sub-paragraphs 773.1- 773.1 of the Cabinet Regulation No. 644 – likumi.lv (in Latvian)

Restrictions affect activities related to the waste industry, use of fossil fuels, generation of greenhouse gases and CO2 emissions or causing damage to water bodies, the circular economy, prevention and control of environmental pollution to protect biodiversity and ecosystems.


Applying

The start-up shall apply for support by filling out an application form at business.gov.lv section E-services (in Latvian). 

Application:

The duration of the support programme is 12 months or, if an early-stage venture capital investment of at least EUR 150,000 has been received, the support period extends to 24 months.

When filling out the application form, the start-up shall attach the supporting documents specified therein, including:

  • a form must be submitted to the de minimis support accounting system, the number of which must be specified in the application – liaa.gov.lv (in Latvian)
  • in addition, for the support to HQE:
    • a copy of the higher education qualifications (at least a Master's degree) and/or a CV certifying the experience of the employees applied;
    • a declaration that the start-up is a small (micro) or medium-sized enterprise;
  • according to the qualification feature:
    • if a venture capital investment is received:
      • a certification signed between the start-up and the venture capital investor;
      • a bank statement from the bank account of the start-up (or a parent company or a subsidiary) showing the investment received;
    • in addition, if a venture capital investment is made in the parent company or a subsidiary of a start-up incorporated abroad:
      • documents proving relationship of the start-up with the indicated parent company or the subsidiary;
      • a certificate from the tax administration of the country of residence of the parent company or the subsidiary that no tax debt over EUR 150 exists,
      • documents certifying that the parent company or the subsidiary of the start-up is not in insolvency proceedings;
    • if the start-up is designing, producing or developing an innovative product, documents proving this must be provided (the start-up's product must be at least what is called a minimum viable product (MVP). The MVP is a version of the product with enough features to be used by the first customers, who can then provide feedback for further product development;
  • an opinion from the organisations representing the start-ups justifying the compliance of the start-up with Section 1(4) and (5) of the Law (if applicable).

Additional support

  • If changes to the application are required, including additional funding or changes to the employees applied for, the start-up may apply for additional support by submitting an updated application.
  • The application for additional support shall be evaluated by LIAA and approved by the evaluation committee.
  • The additional support may be used from the time of the decision of the evaluation committee, up to the duration of the support as initially approved.

Re-application

If the start-up reapplies for support:

  • the total period of support shall not exceed 5 years from the date on which the support was first granted;
  • the same investment cannot qualify for a period of more than 24 months from the date on which the support was first granted;
  • obligations must have been fulfilled in the previous support period (LIAA approved closing payment request or closing report).


Application evaluation

1. LIAA shall evaluate the application and prepare an opinion for the evaluation committee according to the criteria and their evaluation procedure – PDF (in Latvian)

2. The start-up is invited to make a presentation during the session of the evaluation commission on the business idea described in the application (if applicable).

3. The evaluation commission shall take its decision.

4. After the session of the evaluation commission, LIAA shall:

  • publish information on the granting of an support programme to a start-up on the LIAA website in the section "Register of supported start-ups"  – liaa.gov.lv (in Latvian)
  • inform the SRS about the start-ups that have been granted support;
  • send the decision of the evaluation commission to the start-up.


Implementation and receipt of support

For attraction of highly qualified employees (HQE)

  • after the support is granted, LIAA and the start-up shall conclude an agreement setting out the conditions for the implementation of the support programme – PDF (in Latvian)
  • costs shall be eligible from the decision date of the evaluation commission within the time limit set out therein;
  • the start-up shall implement the planned activities as stated in the application;
  • the remuneration of the employees applied for shall be psupport in accordance with the employment agreement, and the eligible costs shall be calculated according to the actual hours worked and the amount set out in the single-rate schedule of eligible costs – PDF (in Latvian);
  • to receive support funding, a payment request must be submitted to business.gov.lv. Sample payment request in PDF (to be published at a later stage). Instructions on how to submit a payment request can be found in the "Useful" section. 

Tax incentives

  • The tax incentive support programme shall apply for full calendar months, i.e. from the month of decision of the evaluation commission or from the following consecutive month;
  • the start-up, upon starting to apply support and throughout the support period, shall provide information to the SRS about the employees applied for support in accordance with the methodical material "Mandatory state social insurance contributions for start-ups" (in Latvian) available on the SRS website;
  • the start-up shall pay a fixed payment for the approved employees throughout the support period and make additional mandatory contributions to the state pension scheme or to a private voluntary pension scheme;
  • within 10 working days after the end of the support period, the start-up shall submit a final report to LIAA to determine the support actually granted – XLXS (to be published at a later stage).

Reporting obligations of a start-up

  • Three years after receiving the support, the report referred to in Paragraph 221 of the Cabinet Regulation No. 74 shall be submitted in the E-services section of business.gov.lv – https://likumi.lv/ta/en/en/id/289027;
  • during the period of implementation of the HQE support and for five years thereafter, a questionnaire must be filled in the E-services section of business.gov.lv, which allows LIAA to assess the impact of the support programme on the export volume and productivity of the start-up;
  • during the support period and for three years after the implementation of the project, the start-up shall submit reports to the Central Statistical Bureau on research, development and innovation costs in the form and within the time limits specified by the Bureau.


Rules of the support programme

The procedures for granting and administering the support programme is specified in:

  • Law onAid for the Activities of Start-up Companies – https://likumi.lv/ta/en/en/id/287272;
  • 01.03.2017 Cabinet Regulation No. 74 – https://likumi.lv/ta/en/en/id/289027
  • 07.11.2023 Cabinet Regulation No. 644 (additional rules on support for HQE) – likumi.lv (in Latvian)
  • 20.01.2017 Cabinet Regulation No. 30 (Regulations of the Evaluation Commission) – likumi.lv (in Latvian)


Laws and regulations


Useful

  • Guide to filling out the application (PDF) (in Latvian)
  • a recording and presentation of the seminar on Support for Start-ups of 20.05.2024 in the Materials section (in Latvian)
  • Instructions for the process of payment request submission (PDF) (in Latvian)
  • How to register on Business.gov.lv? – https://business.gov.lv/en/materials/registration-process
  • Determining the status of a small, medium-sized enterprise (only for HQE) – liaa.gov.lv (in Latvian)
  • How to correctly identify a company’s NACE code – liaa.gov.lv (in Latvian)
  • Lists of sanctions (database) – https://sanctions.lursoft.lv/site/index
  • Verify a tax debt or lack thereof – vid.gov.lv (in Latvian)
  • NACE: Statistical Classification of Economic Activities in the European Community, 2nd edition – csp.gov.lv (in Latvian)
  • RIS3 administration – https://www.liaa.gov.lv/lv/ris3/aktualitates (in Latvian)
  • Information on de minimis – liaa.gov.lv (in Latvian) 
  • Guide to filling in information in the de minimis support accounting system eds.vid.gov.lv (informative material, PDF ) (in Latvian)
  • Laws and regulations and guidelines for the support of the European Union funds – esfondi.lv (in Latvian)
  • Visual identity requirements (HQE only) – liaa.gov.lv (in Latvian)