A quarter-century ago, Latvia faced a defining moment—transitioning from a post-Soviet economy to a modern, market-driven system. The need for structural reforms was urgent, with complex regulations, governance inconsistencies, and institutional barriers hindering foreign direct investment (FDI). In response, the Foreign Investors’ Council in Latvia (FICIL) was founded in 1999—not just as a necessity, but as a commitment to making Latvia a globally competitive investment destination, and tomorrow the organisation will be celebrating its 25th anniversary together with members of the Latvian government and partners!
Since its inception, FICIL has played a pivotal role in stabilizing Latvia’s business environment and shaping policies that both retain and attract investment. As Latvia joined the European Union and positioned itself as a regional investment hub, FICIL expanded its focus to include digital and green transformation, public sector efficiency, shadow economy combatting, and labor market adaptability.
The Transformative Role of Foreign Investment
Foreign direct investment has fueled Latvia’s economic modernization. Today, foreign-owned enterprises contribute approximately 45% of all taxes paid and 34% of total social tax contributions. These businesses employ over 27% of the national workforce and generate 41% of total economic turnover. Since FICIL’s founding, FDI has surged from €500 million in the late 1990s to over €18 billion, reflecting growing confidence in Latvia’s business climate.
Beyond capital, investment is built on trust. The steady rise in FDI signals not just financial commitments, but a belief in Latvia’s long-term potential.
Driving Policy Change for a Stronger Economy
FICIL has been instrumental in shaping policies that improve the investment climate. Over the past five years alone, it has submitted over 280 policy recommendations, addressing systemic inefficiencies that impact investment competitiveness. Over 56% of these recommendations have been fully or partially implemented. Some of FICIL’s achievements include:
· Judicial Reform: FICIL’s advocacy contributed to a 25% improvement in case-handling efficiency and the establishment of the Economic Affairs Court, streamlining commercial dispute resolution.
· Digital Transformation: E-government solutions championed by FICIL have reduced administrative costs by nearly 30%, boosting efficiency and reducing corruption risks.
· Tackling the Shadow Economy: FICIL’s initiatives have contributed to a 10% reduction in unreported business activity over the past decade, improving fiscal transparency.
Challenges and the Road Ahead
Despite progress, skepticism toward foreign investment persists. Some still view foreign investors as competitors rather than strategic partners, fueling outdated narratives. However, the facts tell a different story: many foreign investors have been in Latvia for decades, continuously reinvesting, expanding operations, and strengthening supply chains. Their presence has driven industrial productivity, technology transfer, and improved corporate governance standards.
“As we celebrate 25 years, FICIL remains a bridge between investors and policymakers—not just advocating for a better business environment, but actively shaping Latvia’s economic future,” said Zlata Elksniņa-Zaščirinska, Chairperson of FICIL’s Executive Board. “The progress we see today is the result of years of determination, dialogue, and result driven collaboration. Looking ahead, our mission is clear: to ensure Latvia continues evolving, innovating, and attracting investment that fuels long-term growth. Although defence is now in the centre of the political and economic agenda in Europe and globally, it provides the immense opportunity to government and entrepreneurs to build the future working together.”
The Next 25 Years
According to FICIL’s latest Sentiment Index research, 67% of investors plan to continue their business activities in Latvia.3 However, key structural concerns remain, including talent shortages, administrative burden, and a lack of a clear long-term development strategy of a country. Overcoming these challenges requires a forward-looking policy agenda that enhances investment predictability.
Dace Cīrule, leader of FICIL’s Energy and Green Economy Work Group and Partner at Law Office LarkLaw, captured the spirit of FICIL’s mission: “Day Eight is the first to follow the creation of the world. Thus, Day Eight is the first, as of which a person carries autonomous and continuous responsibility for himself and the world. One grows, discovers, develops. The freedom and the right to inhabit this land are subject to a huge responsibility for one’s home and oneself”.
As FICIL embarks on its next 25 years, it remains steadfast in advocating for policies that secure Latvia’s position as a dynamic, forward-thinking economy. The work is far from over, but with each step forward, Latvia reinforces its foundation for future success—one bold decision at a time.