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Tuesday 20.03.2018 | Name days: Made, Irbe

Latvia's non-residents have created 2 500 jobs in three years

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Аuthor: Edijs Pālens/LETAWithin three-years’ time since the beginning of the residential permit program, non-residents have invested more than 300 million LVL in Latvia. Their total economic activity has helped create nearly 2.5 thousand jobs.

However, according to experts, the attraction of investors and the issue if residential permits in exchange for the purchase of real estate property is unrealized potential. By offering additional opportunities for business and popularizing this in foreign countries, Latvia would be able to attract an even larger amount of foreign capital, the Latvian Real Estate Association (LREA) reports.

Transaction statistics show that Latvian residents spend a little over 20 000 LVL on real estate property, while non-residents’ investments are more than seven times larger. In addition to real estate invested resources, foreigners continue to invest money in maintaining their property, DNB Group Salvus company’s Executive Officer Girts Zalitis reports.

“Recipients of residential permits are mostly people that have been economically active in their countries and have managed to accumulate enough money for the purchase of real estate property. They hold managing positions and seek investment opportunities for starting a business”, – Zalitis says.

Ektornet Chairman Andris Kovalchuks admits: “The volume of transactions with domestic buyers has not changed in the last half-year, but the proportion of money coming from non-residents forms more than half of the total volume. This shows the non-residents’ role in the real estate industry and Latvia’s economy”.

According to experts, the state does not use all opportunities to attract new investors. Information availability regarding residential permits is limited outside of Latvia’s borders – foreigners usually learn of such opportunities from their friends.

“While people in Russia have heard about this law, those living in Kazakhstan or Ukraine are not aware of it. Latvia should invest additional funds in the popularization and improvement of this opportunity. Also, it should be remembered that other European countries are beginning to secure identical measures for attracting foreign capital”, – New Europe Real Estate investor relations manager Inese Jurevica says.

Experts also advise diversifying the investment volume to Latvia’s regions. “The law was approved without first evaluating the ability of regions to attract investments. In order to receive a residence permit in Latgale, investors need to purchase three to seven different pieces of property. This is why investors mostly prefer Riga, Jurmala or Jelgava, where transactions above 100 000 LVL are much less of a hassle. I recommend Riga and Jurmala to increase requirements for the issue of residential permits. The minimum price of real estate property in Latgale should be reduced to 30 000 LVL”, – says Lif Board member Aivars Birulis.

As it is known, July 1, 2009 marked the coming into force of amendments to the Immigration Law. These amendments included the issue of residential permits to foreigners in exchange for the purchase of real estate property in Latvia.


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