Latvia adopts incentives for startups

Latvia ahead of Lithuania and other Eastern European countries adopted the startup law that favours VC backed #startups. Not bad, not bad at all!

Today, the Latvian parliament approved a new law to create a tax regime, one not matched anywhere else in Europe, that will effectively double venture capital investors’ money in young Latvian startups. This law is seen as part of a wider push to make Latvia an attractive base for startups. The law was passed with almost unanimous support in parliament and will enter into force from 1 January 2017.Andris Berzins (Latvian startup ecosystem) comments: „There is work to be done to implement it, but the final version is, in my view quite innovative. Nowhere else have I seen a low, flat rate, simple combo social/personal income tax for startups. It is limited to those who get VC funding, so as to focus the benefit on those with a higher likelihood to succeed. And yes, I know bootstrapped and angel-funded startups are not included for now, this was the intention but the ministry and we could not figure out a way to do it efficiently without becoming a tool for all comers to run tax scams. Adding these is priority #1 in next step improvements.“

Andris Berzins, a board member and co-founder of the Latvian Startup Association, comments: „There is work to be done to implement it, but the final version is, in my view quite innovative. Nowhere else have I seen a low, flat rate, simple combo social/personal income tax for startups. It is limited to those who get VC funding, so as to focus the benefit on those with a higher likelihood to succeed. And yes, I know bootstrapped and angel-funded startups are not included for now, this was the intention but the ministry and we could not figure out a way to do it efficiently without becoming a tool for all comers to run tax scams. Adding these is priority #1 in next step improvements.“

More information is available here.

Uldis from Infogr.am in the photo, courtesy of Arctic Startup.

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