Funding Latvia’s innovative future with one grant at the time

Funding Latvia’s innovative future with one grant at the time


When it comes to starting a new business, it is common to see how many countries offer generous grants, credits and incentives to entrepreneurs working in fields related to business innovation, such as digital economy, energy efficiency, environment, globalization, and sustainability, among others.

Nowadays, in countries like Latvia, companies have an ideal opportunity to qualify for funds specifically focused on research and development (R&D) based on the scheme from 2014 to 2020. There are many tax incentives offered for companies working with development activities related to manufacturing process improvements, production trials and software integration issues in addition to laboratory research.

Those businesses that are aware of what is available and the requirements for qualification are able to obtain significant operational and fiscal benefits from the Latvian government.


In order to be benefited from tax breaks from the Latvian government, company’s R&D activities have to meet the requirements listed below:

  • The purpose of the activities:  it must be industrial or experimental production, including industrial research or experimental production in the service industry.
  • Anticipated result: it shall be innovation or furthering insight into scientific or technology issues.
  • Recommended solutions: It cannot be obvious to the respective industry’s experts.
  • Connection to business operation: the addressed problem must be connected to the business operations of the taxpayer.

Eligibility must be evaluated by the taxpayer in order to apply to the tax break. The taxpayer must explain its R&D project objectives – to produce a new product or technology that nobody else has ever made before. Exceptions for non-innovative products can be made only when the taxpayer is able to prove that the company didn’t know that product or research already existed or it was not available at the time.


Image courtesy of Penn State at
Image courtesy of Penn State at

Horizon 2020 is the biggest EU Research and Innovation program. It funds over €80 billion of available during 7 years (2014 to 2020). It offers a large variety of funding opportunities for R&D activities in Latvia and every country who belongs to the EU.

Horizon 2020 ideology is based on 3 pillars matching its main priorities:

  • Excellent Science: supports the world-class science in Europe, by enhancing the development of the best research infrastructures.
  • Industrial Leadership: supports key technologies and also aims to attract more private investment into R&D activities.
  • Societal Challenges: supports the development of breakthrough solutions for R&D activities that target society and citizens (climate, environment, energy, transport, etc.).

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Image courtesy of catherinecronin at
Image courtesy of catherinecronin at

Eurostars is a program that supports R&D in Small and Medium Enterprises (SMEs), dedicated to developing innovative products, processes and services in order to gain a competitive advantage in different markets. It is the first European funding and support program dedicated specifically to R&D performing. It is co-funded by the European Communities and 33 EUREKA member countries.

In order to apply to the Eurostar Programme, one must comply with following criteria:

  • The project must have a civilian purpose and be oriented towards the development of a new product, process or service.
  • The leading enterprise must be a R&D performing company based on the EU definition of what a SME is.
  • The leading SME must be based in the EU and have at least one participant from an EU country.
  • The R&D performing must undertake 50% of total project cost
  • The project duration shall not exceed a 3-year duration and after the project ends, market introduction of the product, process or service must be foreseen within 2 years.

In Latvia financial support can cover 80% of a participant’s eligible costs. The other 20%t of funding has to be invested by the applying institution itself or from some other source.

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Currently, there are seven technology transfer contact points (TPK) operating in Latvia. TPK are research institutions dedicated to funding and stimulate knowledge and technology transfer. They are in charge of establishing and maintaining external communication, sharing information about the organization’s research activities and experiences.


This program is administered by the Investment and Development Agency of Latvia (LIAA) and funded by the European Regional Development Fund.

The program’s main goal is to encourage new product or technology development in small and medium businesses (SMEs) while strengthening its competitiveness.

The amount of funding per beneficiary is €14 300 and can cover up to 60% of eligible costs.

This program supports the following activities:

  • Industrial research related to anything necessary for developing a new product or technology.
  • Development of experimental product design. This included prototyping.
  • Enforcement of industrial property rights on such objects: invention, design, topographies of semiconductor products.
  • A new product or technology certification services.
  • Development of industrial design of the product.

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