The geographic localization of Latvia gives it a strategic advantage in transport, commerce and finances, to do business with other Baltic nations and the East of Europe. Its economy had an important recovery in the past years after the financial crisis in Russia. The last five years, the Latvian economy showed annual growths of 6%, a fact that allowed the country to move in the direction of open market and economy stability throughout the territory.
The economic indicators are a reflex of the economic politics of Latvia and its financial discipline. The inflation rate is now in the average of the Eurozone, showing a tendency to decrease as well as a public debt in historic lower levels. The government took structural measures in order to reduce the public budget in terms of public spending. This attracted foreign investments and favored external trade.
What is more, there is now a simple way to do business in Latvia with no restrictions on the import of goods, as well as the use of foreign currency. This facilitates the activities of investment and repatriation of utility capitals. The government has adopted a modern legal system, the commercial regulations and the imposed structures are following the influence of western countries, but there are still some changes to be done.
Latvia has a shortage of natural resources and the economy depends on the sector of services, which reaches the 70.2% of the GDP and the 50.2% of the total population activity. The tourism is yet to be developed, but the transportation, shipping, storage and communications are a growing business, with the commerce being the most important entry in the economy of the nation. The commercial relationship with Western Europe was possible due to the economic crisis in Russia, but the local industry is still obsolete. In order to be competitive with foreign companies, Latvia needs to import new technologies. The country imports 52% of its goods from the Eurozone and 62% of the exports are destined there as well. The main targets are Germany, Sweden and the UK, with sawn wood, wooden products and textile products. Imports come from Germany, Russia, Finland and Lithuania, ranging in fuel, chemical products and capital goods.
LAWS AND REGULATIONS
There are no restrictions to the import of agricultural products from third party countries. It only requires the AGRIM, a certificate of import according to the community laws. For industrial products, there are just a few exceptions: The Department of Treasury works with the permits and commercialization of tobacco, alcoholic beverages and the storage of fuel products. The Department of Agriculture issues for grain, sugar and animal products. And the pharmaceutical products depend on the Health Department. In addition, explosives, weapons and ammunition are issued by the Department of Defense.
LVS stands for Latvian Standard. This is the regulation member corresponding the ISO. This regulation organism develops and adapts laws of Latvia with the EU and other regions, participates in the International Electrotechnical Commission, the European Committee for Standardization and the European Committee for Electrotechnical Standardization. The accreditation for product and services is given by the LATAK, the national organism that provides information Internet about the requirements and necessities for homologation. Since the entry of Latvia in the European Union, the country uses the technical Directives and Regulations of the community.
The country has adopted the European regulations concerning packaging and shipping. Starting with the rule 1994/62/EC and the following modifications from the European Parliament. The labels has been adapted in order to better identify the responsible, producer and distributor. The requirements for the labeling depend on the kind of product and its final destination. Further detailed information regarding this issue can be found following this link: http://europa.eu.int/scadplus/leg/es/s16400.htm
TRADITIONAL MARKET VERSUS MODERN SUPERMARKETS
The tradition was to buy grocery from small commerce shops but with growth of the income of the population, the supermarkets became popular. In the past few years, the agricultural products have been moved progressively from the little markets. The former Russian way of commerce was replaced by the presence of modern supermarkets that are expanding from the center of Riga, capital of Latvia. Outside of Riga, small markets of basic products can be found. Those markets are regulated and promoted by an association of Latvian consumer protection, which is the main organization that congregates consumer organizations in the country. It is an independent organization that also coordinates the activities of the group in the region.
The common way to distribute products in the country is using the services of a local agent. Due to the size of the market, a Latvian distributor could provide a variety of products in different industrial sectors, even export them to other Baltic countries such as Lithuania and Estonia. Advertising is made without restrictions almost in every electronic and printed media. There are three main TV channels that cover Latvia at broad, the other channels work mainly in Riga.
FAIRS AND BUSINESS OPPORTUNITIES
As for the methods of promotion and merchandizing, the country has the following fairs: INTERTEXTIL for leather and textile international business, BALTICUM for exhibition of international agricultural production and infrastructure, RIGA AGRO and RIGA FOOD for food, beverages and food processing technologies, and the FURNITURE fair for international furniture exhibition.