Our experience

Setting the scene

One of Europe’s greenest countries, 45% of Latvia’s land is covered in forest. The vast forests create an opportunity to further develop the woodworking industry and green technology solutions. But Latvia also has many other attributes that could make it an attractive investment destination: it is centrally located near strategically relevant transportation flows, has a skilled workforce, and has well-developed ecosystems in several industries. The country also has the highest productivity rate compared to Baltic countries and Poland at EUR 107.9 GDP per hour. 

However, in recent years, Latvia saw a sharp decline in foreign investment. At its peak in 2007, foreign investment was 36.4% of GDP. In 2016 it fell to 18.3%. To foster GDP growth and an economic breakthrough in the country, attraction of foreign capital was vital.

The investment climate lacked a clear framework, country-wide marketing strategy and the capacity to proactively pursue opportunities. The Ministry of Economics, one of the primary institutions responsible for policy formation in this area, recognised these critical bottlenecks for reaching Latvia’s high potential. The Ministry wanted to create a streamlined investment attraction approach and improve Latvia’s offering internationally.

How we helped

PwC Latvia and PwC Luxembourg carried out two projects to support the Ministry of Economics and Investment and the Development Agency of Latvia in implementing proactive foreign investment attraction reforms. With financial assistance from the European Commission, the projects lasted from April 2018 to February 2020.

In the first project, PwC gathered data to understand the existing approaches. The insight shaped PwC’s proposed foreign investment attraction framework. The approach included:

• Analysis of institutional stakeholders involved in the investment attraction and their cooperation mechanisms, 

• Mapping existing processes, 

• and preparing a detailed overview of an investor’s journey, the steps an investor needs to take to complete the investment in Latvia. 

To better articulate Latvia’s investment destination strengths, PwC collaborated with the Ministry of Economics to identify concrete investment opportunities and develop investor targeting plans. We helped Latvian institutions develop industry-specific value propositions to better promote their offering internationally.

With the foundation from the first project, PwC could then support the government to build  the  capacity of Latvian institutions to implement the framework and investor targeting plan. This was the second project. PwC advised the ministry on the most suitable IT tools to be used and provided a number of practical, hands-on trainings targeted to the investment managers at Investment and Development Agency of Latvia. These training sessions covered topics such as intelligence collection, value proposition development, presenting, pitching and rapport building.

Our focus was creating a framework for investment attraction transformation that is sustainable, practical and tailor-made for Latvian institutions. 

Impact and potential

More than 15 representatives from the Ministry of Economics and Investment and Development Agency of Latvia have been upskillied on investment attraction. Latvian institutions have now identified over 50 potential investors and proactively established contact with more than five potential investors. 

The projects demonstrate Latvia’s commitment to proactive investment attraction reform. The framework recommendations have established grounds for investment policy changes, but the additional training and knowledge sharing will ensure a sustainable implementation.  The project highlighted the advantages of a user-centric approach when it comes to designing strategies and action plans for proactively approaching investors. 

Latvian institutions have already taken major steps in transforming investment attraction by strengthening collaboration with investment ecosystem stakeholders and implementing a more coordinated approach. New IT tools have helped to streamline the investment attraction process.

Better promotion of Latvia as an attractive investment destination and Latvian institutions’ proactive approach to investors will lead to more and more companies coming for site visits and investing in the country. This will help further enhance Latvia's reputation as a great place for innovative and high-value added products, create new job opportunities and spur economic growth.