Latvia Tries to Attract Foreign Investment
RIGA, LATVIA — LATVIA plans to offer tax-breaks to attract foreign investment in tourism and other key industries."The first target area for foreign investment is tourism," Arijs Ziverts, deputy director of Latvia's foreign trade department, said Monday. The country, sandwiched between Estonia and Lithuania, has a tradition of tourism from the period between the two world wars, before the Baltic republics were incorporated into the Soviet Union. Health spas along the bay of Riga were especially popular with Scandinavian visitors. New foreign investment rules are laid out in a Latvian government bill that parliament is expected to pass this year. New businesses in Latvia are exempt from a profits tax for the first two years and those started with foreign capital will escape tax for two more years. And there will be no restrictions on the repatriation of hard-currency profits. In addition to tourism, industries targeted for foreign investment include forestry and pulp, pharmaceuticals, biotechnology, electronics, farming, and assembly operations. "By the end of September we will have details of the conditions for investment which we want to encourage," Mr. Ziverts said. Denmark signed an accord with Latvia on double taxation last week and pledged to help the republic develop a banking and monetary system.