Dear FICIL members

As summer season has started, presumably many of you are already looking towards vacation. Despite June being not so active as May when FICIL had the High Council meeting, the works to improve investment climate in Latvia never stop. Please see below June’s office report.

Updates from FICIL Board

The FICIL board met twice in June. At the regular FICIL Board meeting, feedback of the 21st High Council meeting was discussed. The Board members were very positive about overall organisation of the HC and in particular the new approach using the latest IT tools and apps. More attention should go into timely preparation of FICIL’s position papers. The Office and the Board members will look into formulating specific guidelines for future work.

Furthermore, the Board also met with the newly elected Honorary Chairperson Mrs Charlotte Norrby from SEB (please find her CV here). While Mrs Norrby is well familiar with the work of FICIL being on the Board of FICIL from 2007 to 2010, members of the Board discussed the latest topicalities in economic and political life in Latvia, changes in business environment as well key challenges for foreign investors. The key milestones and priorities for the next year were also pinned down.

Shortly after the High Council meeting, the members of the Board had an opportunity to meet with the Vice-president of European Commission Valdis Dombrovskis in the framework of his visit to Latvia. This was a perfect timing to discuss FICIL’s recommendations from the HC and look at the key aspects of European Semester and the Country Specific Recommendations for Latvia.

Follow up on recommendations and the High Council meeting

Transport and Logistics

To follow up on the FICIL recommendations in transport and logistics, members of the Transport work group met with representatives from the company ‘Latvian Railways’ (the vice-president of Latvian Railways Arvids Strakšas and chairman of the Board of ‘LDzLoģistika’ Verners Lūsis). During the meeting, the work group members amplified our concerns on the transparency of railway tariffs and transparency in transit sector in general.

Energy and availability of labour

In June, there were two meetings of the National Economy Council devoted respectively to energy and to availability of labour.

On energy, the Ministry presented three scenarios for addressing the issue of competitiveness of energy prices. First scenario foresees that the rise of mandatory procurement component (OIK) will be compensated from the dividends of Latvenergo. The second solution – the government prolongs Subsidised electricity tax till 2020 when OIK is expected to decrease naturally. The third scenario proposed by the ministry predicts voluntary company’s refusal from guaranteed payment. The ministry’s plan with detailed proposals in Latvian can be accessed here.

On availability of labour force, the Ministry presented ideas related to attraction of Labour force from third countries – a draft list of professions (mainly ICT, construction and production related sectors) for which administrative burden will be reduced was presented. The plan will be handed in for discussion and adoption by the Government.

Education

Claudio Rivera, the leader of FICIL Education work group, participated in a meeting devoted to the latest findings of the World Bank on Latvia’s higher education governance and funding that largely reinforce and go in line with the FICIL’s recommendations on Education. You can access the World Bank findings here.

Tax policy and administration

In order to follow-up on the recommendations mentioned in our Position Paper on tax policy and administration and to discuss the private and public sector cooperation, the leaders of the Tax work group (Aija Kļavinska and Baiba Strupiša) met with the Director-General of the State Revenue Service Ilze Cīrule.

Also, representatives of the Tax work group met with Ministry of Finance regarding the changes in legislation on Corporate Income Tax.


Meeting potential investors from Finland

On 6 June following a request from LIAA, FICIL Executive Director gave a presentation to potential Finnish investors on FICIL and its work, key priorities and challenges regarding the business environment and investment climate in Latvia.


Preparations for FICIL Sentiment Index 2017-2016

The next FICIL Board meeting is scheduled for 9 August. The Associated Professor from SSE Riga Dr Arnis Sauka will join the meeting to discuss the methodology and the necessary preparations for the FICIL Sentiment Index that is expected to be launched in early December.

 

Sincerely Yours

FICIL office

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