Foreign Investors’ Council in Latvia elects new board

Foreign Investors’ Council in Latvia (FICIL) has elected a new management board headed by Enrique Garcia, CEO of Cemex Latvija.

Garcia is taking over from Jerry Wirth, representative of the American Chamber of Commerce in Latvia.

The board will have two vice chairwomen: Ginta Cimdina, CEO of Fortum Latvija, and Zlata Elksnina-Zascirinska, Country Managing Partner at PWC.

Chairman of FICIL’s Board Enrique Garcia says: “We commend the government on maintaining the stable economic growth and financial discipline needed for the full integration to the European Union with the adoption of the Euro. Also, recognition is well deserved for introducing reforms, which have resulted in Latvia’s increased performance in the Global Competitiveness Report and Doing Business Index. Latvia has been able to “stay ahead of the curve” and differentiate itself from other economies still struggling after the crisis.

Nevertheless, last year in the context of the Baltic Development Forum the lack of strong leadership was recognized as one of the main obstacles to more healthy growth in general for the economy and in particular for FDI in Latvia. Specifically, foreign investors pointed out that Latvia’s main actors in government should not only set out a vision on where the country needs to go, but most importantly should capable of reaching consensus to make decisions and implement the actions needed with the appropriate accountability.

Latvia has adopted a variety of policies and introduced regulation under the aegis of fostering a better business environment and national competitiveness: National development plan, Industrial policy and related documents, Policies for regional development and territorial planning, Public sector reform etc.

Implementing the “policy talk” is expected, amongst others, to raise Latvia’s attractiveness to FDI, being at least in theory an important element for healthy economic growth. During this year’s High Council meeting, FICIL would like to address the gap between “talk and action” to achieve concrete and coherent results.”

Read more from FICIL website

Eesti Pank will exchange Latvian lats for euros

Lat banknotes can be exchanged for euros in Eesti Pank from 2 January until the end of February at the central exchange rate and at no charge. Latvian coins cannot be exchanged.

On 1 January Latvia joined the euro area and on that date the euro became the currency of Latvia at the exchange rate of 1 euro = 0.702804 lats.

Latvian banknotes can be exchanged in the museum of Eesti Pank during its opening hours within the daily limit per person and per transaction of 1000 euros. The Eesti Pank Museum is open from Tuesdays to Fridays 12-17 and on Saturdays at 11-16.

Latvian banknotes will be exchanged by all the central banks of the euro area during the next two months.

Lat banknotes and coins can be exchanged at the central rate in bank offices in Latvia until the end of June and in 302 Latvian post offices until the end of March. The Latvian central bank will exchange lats for euros at the central rate with no limits on amounts or on time.

Lats in current accounts in Latvian banks were automatically converted to euros at the central rate without any service fee.

The lat will continue to serve as legal tender for two weeks following the changeover to the euro but from 15 January the euro will be the only legal tender in Latvia.

From the start of this year it will only be possible to exchange kroons for euros in the museum of Eesti Pank.

Source: Bank of Estonia

Eesti Pank will exchange Latvian lats for euros in January and February

 

On 1 January 2014 Latvia will join the euro area and from that date the euro will be used in place of the Latvian lat at the exchange rate of 1 euro = 0.702804 lats. Eesti Pank, like the other central banks of the euro area, will exchange lat banknotes for euros from 2 January until the end of February at no charge.

From 2 January 2014 it will be possible to exchange lat banknotes for euro cash at the central exchange rate and with no service fee in the Eesti Pank Museum during its opening hours. The daily limit per person and per transaction is 1000 euros. Latvian coins will not be exchanged in Eesti Pank.

Lat banknotes and coins can be exchanged at the central rate in bank offices in Latvia until the end of June next year and in 302 Latvian post offices until the end of March. From 1 January the Latvian central bank will exchange lats for euros at the central rate with no limits on amounts or on time.

Lats in current accounts in Latvian banks will be automatically converted to euros at the central rate without any service fee.

The lat will continue to serve as legal tender for two weeks following the changeover to the euro but from 15 January the euro will be the only legal tender in Latvia.

Estonian kroons can still be exchanged in cash handling offices of Swedbank and SEB across Estonia until the end of this year but from 1 January 2014 it will only be possible to exchange kroons for euros in the Eesti Pank Museum.

The Eesti Pank Museum is open from Tuesdays to Fridays 12-17 and on Saturdays at 11-16.

Source: Bank of Estonia

Latvian steelmill insolvent

Latvian steelmill Liepajas Metalurgs that employs about 2,300 workers was filed for insolvency yesterday, Nov 4, after the company’s shareholders refused to invest more funds.

Read more from BBN

Latvian officials to Estonia: stop criticizing neighbors

Responding to the accusations made by the Estonian Minister of Economy Juhan Parts that Latvia and Lithuania are delaying liberalization of their electricity markets for households and thus cause price hikes, a representative of the Latvian Economy Ministry said that Estonia should refrain from criticism.

Instead of criticising, Estonia should work on solutions to ensure sufficient capacity of interconnections and effective operations of the electricity market, reported the Baltic Course.

Read more from BBN

Latvia is EU’s newest tax haven?

German magazine Der Spiegel writes that Latvia could become the European Union’s “newest tax haven and further destabilize the European economy”.

“Latvia will become the euro area’s newest member in January 2014, the same time that new tax laws will go into effect allowing the country to compete with the likes of Cyprus and Malta. This could further destabilize the European economy,” reports the newspaper.

According to Der Spiegel, Latvia’s corporate tax rate is just 15%, far lower than the EU average of 23.5%. Within the euro zone, only Ireland and Cyprus, each at 12.5%, have lower rates.

However, the latest data from the EU’s statistical office Eurostat indicate that the lowest corporate tax rate is in Bulgaria and Cyprus – 10%, followed by Ireland – 12.5%. Latvia and Lithuania have the third lowest corporate tax rate – 15%.

Der Spiegel also points out that holding companies – firms that hold stock of other companies – enjoy further benefits in Latvia. Since the beginning of 2013, their foreign profits earned via dividends and stock sales have been tax free. Transferring such profits out of country is also not taxed. Furthermore, as of 2014 Latvian holding companies will no longer have to pay taxes on interest and licensing fees they pay to foreign companies.

Read more from BBN

Latvia keeps energy prices low by postponing investments

The Latvian energy policy is geared towards consumer protection, keeping prices lower by avoiding expensive energy projects, said energy policy expert Andres Mäe.

The policy also means lower production capacity and a lack of energy connections with other countries, ERR News reported.

Read more from BBN

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