The Foreign Investors’ Council in Latvia (FICIL) expresses dismay and serious concerns over delays in amending Cabinet of Ministers Regulation No. 776, issued on December 16, 2014, regarding the “Procedure for Declaring Compliance with Small (Micro) and Medium-Sized Enterprise Status.” This issue affects several FICIL members and other businesses facing unwarranted administrative restrictions that hinder access to European Union funding and undermine Latvia’s competitiveness in attracting investments. This matter has been under discussion since September 2024.
Latvia’s current EU fund management system creates a situation where internationally stable and financially sound companies cannot prove their non-compliance with the definition of “companies in difficulty”, preventing them from accessing support programs for investment projects implemented by the national development financial institution ALTUM.
Additional complications arise from objections by the State Chancellery to the proposed amendments, arguing that the legislator has not authorized the Cabinet of Ministers to issue regulations in this case, as the matter is already governed by law. Therefore, it is necessary to amend the Law on Control of Aid for Commercial Activity to grant the Cabinet of Ministers the authority to establish procedures for large companies to certify their status.
The Ministry of Economics has prepared a draft law, “Amendment to the Act on Control of Aid for Commercial Activities” (24-TA-3201), and submitted it for urgent review. However, the Ministry of Finance raised objections during the initial review round, which are currently being addressed to ensure the swift progress of the amendments.
FICIL acknowledges that the Latvian government understands the issue and is working to find solutions. It commends the efforts of the Ministries of Economics and Finance, as well as the Central Finance and Contracting Agency (CFLA). Nevertheless, if the government fails to implement an effective solution soon, it will delay the realization of significant investment projects in Latvia, which have the potential to boost employment and economic growth.
To ensure the country’s competitiveness and increase investment, FICIL urges all involved parties to reach an agreement more quickly on adopting the amendments and necessary changes to the Law on control of aid for commercial activities or to find an alternative temporary solution through Cabinet regulations.