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Monday 17.02.2020 | Name days: Konstance, Donats
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Foreign investment volumes in Latvia reach EUR 7.03 billion in 2019

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investments, Latvia, counties, economy, sectorsThe volume of foreign investments in Latvia reached EUR 7.03 billion at the end of 2019. However, when compared to 2018, this amount has declined EUR 125.42 million, according to information compiled by Lursoft.

When compared to 2015, when the volume of foreign investments was EUR 7.54 billion, the amount has reduced by EUR 502.33 million.

13 300 transactions with investors were registered in Latvia last year. 4 200 of them were positive – investments were made to capitals of Latvian companies, according to data from Lursoft.

Arnis Sauka, the author of the latest study about foreign investment environment index of the Foreign Investors Council in Latvia, has concluded that in the past two years Lithuania has also been able to attract foreign investments worth approximately EUR 2.7 billion. Estonia has attracted approximately EUR 3.1 billion, whereas in Latvia the amount is only EUR 1.1 billion.

Estonians invest more than withdraw

Only investments from Estonia had increased in Latvia in 2019. The volume of investments from Russia had reduced by EUR 183.21 million and investments from Lithuania had reduced by EUR 17.43 million.

Five cases when Estonian citizens had invested in Latvian companies more than EUR 10 million were registered last year. There were also three cases when the volume withdrawn investments had exceeded EUR 10 million. At the same time, not a single case when Lithuanians invested EUR 10 million or more in Latvian companies was registered last year, as reported by Lursoft.

The most rapid increase was observed for German representatives’ investments in Latvian-based companies last year – by EUR 365.32 million. This happened thanks to the EUR 288 million investment of German construction materials manufacturer Schwenk in Cemex (now known as LLC Schwenk Latvija).

Read also: Latvia is doing everything to avoid getting grey-listed, says Kazāks

The company reports that the sold assets in Baltics include cement production plant in Brocēni, which has a production output of approximately 1.7 million tonnes annually, four aggregates quarries, two cement raw materials quarries, six ready-mix plants, one port terminal and one land transport terminal in Latvia. The deal also covered Cemex’s indirect participation of 38% in one cement plant in Akmene, Lithuania.

This deal also explains that the most rapid decline is observed for investments from Spain, because the previous owner of Schwenk Latvia that had invested EUR 288 million came from there.

A decline for investments from Sweden is explained by Lursoft with Luminor Bank’s last year’s reorganization, as a result of which Latvian-Lithuanian Luminor Bank handed over all of their property to Estonian Luminor Bank. Now Estonian Luminor Bank works in Latvia and Lithuania through branch offices. The base capital of the reorganized Luminor Bank in Latvia was EUR 191.18 million.

Four counties left without foreign investments

In 2019 the volume of foreign investments had increased in 48 municipalities, of which Saulkrasti County had the most rapid increase. In 2018, foreigners had invested EUR 145.35 thousand in companies registered in the county. At the end of 2019, this amount had increased more than 180 times, reaching EUR 26.26 million.

This happened thanks to an increase of base capital of LLC SCA Mežs Latvija, with Swedish SCA Graphic Sundsvall Aktiebolag investing several million euros into the company.

Lursoft data shows that the volume of foreign investments in eight counties had remained unchanged last year, whereas other municipalities had experienced a decline. Among them are Alsunga, Rugāja, Vārkava and Baltinava. Although the four of them were among municipalities on the list of foreign investment recipients, in 2019 all four of them were taken out.

The lion’s share of foreign investments is concentrated among companies registered in Riga. Although over the course of the year their volume has decreased 3.39%, companies in Riga still have managed to attract more than 75% of all foreign investments received by Latvian companies.

Companies registered in Riga, Ķekava, Ventspils, Liepāja amd Garkalne managed to attract the biggest foreign investments in 2019.

One-fifth of foreign investments attracted by real-estate companies

Lursoft statistical data shows the most rapid increase was observed in healthcare and social care sectors last year. Over the course of the year the volume of foreign investments in companies of these sectors had increased 27.31% or EUR 2.41 million, reaching EUR 9.96 million.

At the same time, in monetary terms the biggest foreign investment increase was noticed among companies engaged in real estate operations. According to information from Lursoft, the volume of foreign investments received by companies working in this industry in 2019 had increased by EUR 235.82 million. At the end of 2019, investments had reached EUR 1.38 billion, which is nearly one-fifth of all foreign investments in Latvian companies’ base capitals.

The most rapid capital increase was experienced by LLC Lidl Latvija, whose base capital had increased EUR 71 million and LLC Joom, whose base capital increased EUR 81.53 million.

Not all industries have had an easy time with foreign investment attraction. In certain industries the volume of saved foreign investments had decreased in 2019. For example, this is applicable for transport and storage sectors. While in 2018 the saved foreign investment volume in base capitals of these companies was EUR 538.31 million, last year the volume was EUR 381.53 million. The annual decline was 29.13%.


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