Investors in Latvia are most concerned about bureaucracy, corruption and qualified labour shortages

October 24th, 2014 – Riga, Latvia – On 16 October 2014, the international executive search company “Pedersen & Partners” and the pan-Baltic law firm LAWIN hosted “Investors’ Voice” in Riga – a business forum for the purpose of discussing investment in Latvia through the analysis of sources of foreign direct investments (FDI) and their allocation between Latvian industries. The forum was attended by 80 high-level executives from multi-national companies operating in Latvia. During the course of the forum, the focus turned towards Latvia’s prospects for attracting investments, taking into account the current geopolitical situation and recent trends in European and global financial markets.

Latvian Finance Minister Andris Vilks and Prudentia partner Girts Rungainis spoke before the forum as experts. Investors were represented by Seymour Ferreira, CEO of the Baltic Business Unit of SPI Group, Oliver Bramwell, Chairman of the Management Board of Norvik Banka, Asmund Skar (Åsmund Skår), President of DNB bank, and Kaspars Rokens, Executive Manager of Schneider Electric Latvija.

Vilks emphasizes that the ability to attract investment is a key requirement for facilitating growth in Latvia. During the last 20 years Latvia has been able to develop an attractive environment for investments due to both its geographical location and the fact that it had demonstrated the ability to overcome a serious economic crisis and shown growth and stability in recent years – crucial factors for investors. The Minister points out Latvia’s good growth potential for the upcoming years. The Baltic States are currently in a competitive position globally, and Latvia is projected to improve on this next year.

The volume of foreign direct investments (FDI) tends to fluctuate with general trends in the economy. FDI in Latvia peaked in the wake of the 2006-2007 crisis. During the 2009 recession, the volume of FDI in Latvia shrank considerably, but the indices have stabilized in recent years. The volume of FDI has been low over the first half of 2014, but as Vilks stressed, this year’s low rates are a problem throughout the Eurozone, and this can be explained by geopolitical factors. The Eurozone will lose its competitiveness unless politicians become actively involved on a global scale, but Vilks hopes that the new European Commission will take a pragmatic approach and effect positive changes.

“Trust, stability and predictability are fundamental elements. We do not like surprises,” says DNB President Asmund Skar. He points out deficiencies in Latvia’s administrative and legislative system, while concurrently emphasizing the country’s good standing as a key factor for investment. In terms of investment, Skar says that Latvia has benefited from geographical proximity, and also historical and cultural similarities. DNB is interested in the Baltics as both a market and a successful environment for developing DNB Group’s business operations, utilizing local advantages such as low labour costs and the availability of highly-qualified professionals.

Oliver Bramwell, Chairman of the Management Board of Norvik Banka, is of a similar opinion. According to Bramwell, Norvik Banka’s shareholder believes that its investment in Latvia will yield healthy future return on investments. During the post-crisis period, Latvia’s gross domestic product and other financial indices showed strong prospects of future stability and growth, which motivated the decision to invest.

One decisive factor for investment is high efficiency of labour.  Kaspars Rokens, Executive Manager of Schneider Electric Latvija, notes that Schneider Electric’s performance in Latvia has been very successful, considerably exceeding the average industry performance. The company is currently continuing to invest long-term in Latvia. Rokens appreciates the high employee productivity levels in Latvia, but also notes a shortage of qualified labour, especially in the regions.   He points out the need for the government to improve flexibility by providing infrastructure and reducing bureaucracy.

Production and export volumes are crucial factors for long-term investments by one of Latvia’s leading exporters – AS Latvijas Balzams. Seymour Ferreira, CEO of SPI Group’s Baltic Business Unit, notes that more than 100 years of the company’s history in Latvia is proof of the country’s stability and attractive motivation for further investments. Latvia’s geographical position is favorable for exports, and added value comes from the culture of Latvia and the multilingual skills of its employees.

Investors and experts agree that capital can be identified with nationality, and this can affect corporate governance. Prudentia partner Girts Rungainis notes that before the crisis, it was usually presumed that capital has no nationality, but it is now absolutely clear that the origin of capital affects business culture. Within Scandinavia alone, for example, differences between Finnish, Swedish, Danish, Norwegian and Icelandic companies become obvious on close examination – and of course, even more cultural differences surface when German, French, Russian and Japanese enterprises are compared.

The main issues encountered by investors in Latvia are bureaucracy, corruption, insufficient development of infrastructure and existing resources and a lack of educated and qualified labour. One of the challenges for the new government will be to address immigration policy and education issues.
To conclude, the panel of experts and investors and the participants of the event expressed genuine support for the continued future organization of such events. Dialogue among government officials, investors and executives of companies, and experts is crucial to attract future investment in Latvia and overall prosperity.

About LAWIN:

LAWIN is the largest specialised legal team in the Baltics, with a portfolio of cross-border experience comprising the most significant international projects and landmark local deals in the region since the beginning of the 1990s. With over 145 legal professionals and the widest variety of practice areas, LAWIN is ideally positioned to provide each client with top expertise and in-depth specialized legal services, both domestically (in Estonia, Latvia and Lithuania) and on a pan-Baltic scale. 

About Pedersen & Partners:

Pedersen & Partners is a leading international Executive Search firm. We operate 52 wholly owned offices in 50 countries across Europe, the Middle East, Africa, Asia & the Americas. Our values Trust, Relationship and Professionalism apply to our interaction with clients as well as executives. More information about Pedersen & Partners is available at

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