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Saturday 22.10.2016 | Name days: Irīda, Īrisa

Last year’s number of new companies in Latvia was the lowest in past five years

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU2015 had the smallest number of newly-registered companies in Latvia in the past five years. The number of liquidated companies, on the other hand, had increased by 57% in the country last year.

According to information from Lursoft, a total of 13,483 new companies were registered in Latvia in 2015. This means a 10% decrease in comparison with 2014.

A look at data for previous years shows that the number of new companies had rapidly increased in 2010 following the government’s adoption of new commercial registration rules. This allowed entrepreneurs to found Ltds with reduced base capital. New rules became popular in the first days following approval of those rules. As a result, more than half of all new companies registered that year were Ltds with reduced capital. A similar trend was also noted in 2015, when 60% (8,060) of new companies registered in the country were Ltds with reduced capital.

Considering the small increase in the number of new companies and the significant increase in the number of liquidated companies, the actual number of companies registered in Latvia had increased by a mere 3,415 companies last year, which is the lowest index since 2007. Nine years ago there were 14,208 companies registered and 11,185 liquidated in Latvia. As a result, the situation formed similar to the current one: when the number of new companies in the country increased by a mere 3,023 companies. There are many different reasons behind the rapid decline in the number of new companies. One of the most serious reasons was the liquidation of companies that did not comply with requirements of the Law on Commerce. Measures taken by the State Revenue Service and the Enterprise Register to clean up the business environment also had an impact on the number of companies working in Latvia.

An analysis of information regarding liquidated companies shows that companies previously working in retail, wholesale and building construction were the companies that were shut down the most often in 2015. According to available information, the average age of companies liquidated in 2015 reached 9.5 years. Nevertheless, 44 companies registered the year before were liquidated in 2015 as well.

Compared with 2014, when nearly 18% of newly-registered companies in Latvia were those with capital consisting of investments from foreigners, last year’s index dropped to that of 2013, when the proportion of such companies was 16%. Five most popular countries whose citizens had invested money in companies registered in Latvia in 2015 include Russia, Lithuania, Estonia, Belarus and Germany.


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