A title to real estate in Latvia provides specific benefits for its holder. The purchase of real estate is an excellent option if you wish to receive a residence permit in Latvia, if you seek new business opportunities or if you are simply looking for a good investment.

According to the annual review conducted by the Latvian State Land Service (SLS), during the period July 2011 to July 2012 almost 50% of the total turnover in the local real estate market was related to sale and purchase of buildings and apartments. According to the same annual review by the SLS, of all the groups involved in the local real estate market, the second most active group were foreign investors. Experts also pointed to continued growth in demand for Latvian real estate as a driver for the ongoing increase in sales prices.

Residence permit
Latvian laws provide an opportunity for foreign investors who have purchased qualifying real estate in Latvia to apply for a residence permit in Latvia. In order to qualify, very specific requirements (set forth in the regulations) must be met - So it would be sensible to take advice before begining your real estate search.

Residence permits in Latvia can be very valuable, since Latvia is part of both the European Union and the Schengen area. The holder of a Latvian residence permit may not only Work, reside, run a business and study in Latvia, but can also travel to other countries of the Schengen area for up to 90 days without any further registration or visas - Residents of Latvia need never worry about Schengen visas for tourism or business trips anywhere in the Schengen zone.

New opportunities
After you have become the legal owner of real estate in Latvia, you may use it however you wish - including to start or expand your business if that is what you desire. This could be quite profitable.

If you have purchased a commercial property (factory, warehouse, hotel, office etc.), you may run your business there or lease it to any other company.

If you have purchased a house or an apartment, you may rent it out. Renting can prove to be very profitable in such cities as Riga, Jurmala or Ventspils. There are a large number of foreign businessmen constantly looking for a place to stay during their visit to Latvia instead of staying in a hotel. Also, these cities are visited by thousands of tourists each year and demand for rental apartments is high. (read more)

The sprinkler market entry strategy is simultaneous business expansion to a number of foreign markets. Its main characteristic is the simultaneous market entry in pursuit of benefits that an early entry provides. Thus, it is a high-risk, high-reward approach - a successfully executed sprinkler strategy allows collecting profits from several markets while also being ahead of your competition, but a failed entry (withdrawal from markets) costs a lot of resources and provides little in terms of compensation.


A company enters several foreign markets at once and tries to establish itself, promote the product and build a client base simultaneously. The company receives profit and internationalization knowledge from several markets, which makes spreading the business even more effective, as there are so many sources of resources and information. This is similar to a water sprinkler, where each individual droplet is small, but they are numerous and spread all around, so that all the nearby area is watered evenly and thoroughly.

Implementation
The sprinkler market entry strategy is best suited for companies, who produce products with a short life cycle or whose products are in the introduction or growth phase. Usually the sprinkler strategy is supplemented by the price skimming technique, when the initial price is rather high and is lowered with time. This allows generating as much profits as possible in a relatively short period of time, taking into consideration profits from all the regional branches.

Another thing to keep in mind with the sprinkler market entry is the procedure standardization. As it is almost impossible to customize and adapt for each and every market entered, standardization plays an important role in keeping the business expansion process coherent and the incoming data comparable. Of course, it does not mean that everything should be uniform - it is still vital to pay attention to, for example, cultural differences and how they affect advertising and branding. Thus, for example, hot dog companies in Malaysia in 2016 were forced to rename their products concerning the word 'dog', as this animal is considered to be 'unclean' in Islam, which is one of the major religions of the region. If the sprinkler strategy fails to adapt to such peculiarities, expansion into a certain market may stall.

Advantages
The sprinkler market entry strategy is an effective method of outrunning competition and utilizing the first-mover or technological advantage. While the competitors enter just one or two markets at a time, the business in question raises the brand-awareness in many more markets. Even if the competitors also enter these markets, they will be seen as followers, rather than as innovators. The business that uses the sprinkler market entry strategy has more time to analyze the market and make adjustments. An early simultaneous entry also means more possibilities for registering intellectual property, which hinders the later advance of competitors even more.

Another advantage is the amount of income from a large number of entered market, especially if the business expansion was successful in the majority of the markets. Besides just receiving profits and using them to develop the company, this also gives another advantage - the profits from successfully entered markets can be allocated to less successful regional branches, thus minimizing the risk of withdrawal across all the markets. This makes the sprinkler strategy advantageous in the long-run.

Disadvantages
The sprinkler market entry relies on a big number of markets entered simultaneously, which, in turn, requires a significant amount of initial investments. This includes both finances and staff, as well as the general business expansion planning. Depending on the markets and other circumstances, production facilities, offices, logistics networks and bank accounts will need to be established in numerous markets at once, putting additional strain on resources.

Another disadvantage of the sprinkler strategy is the high risk of entering a number of markets at once. Although a failure and possible withdrawal in one can be compensated by the profits from other markets, if the whole business expansion is unsuccessful, the losses are rather serious (due to big initial investments, see the previous disadvantage).

On 1 July 2010, the amendments to the Immigration Law of the Republic of Latvia came into force expanding the possibilities to obtain a residence permit in Latvia for foreigners who want to stay and move freely within the Schengen area.

The uniqueness of these amendments lies in the fact that a new method for obtaining a residence permit was introduced – investing in real estate. It has attracted a large number of investors, because a foreigner investing in real estate (that can be used for profit) has the possibility to move freely within the Schengen area under the condition that he or she has a passport and sufficient financial means. Citizens of the Russian Federation are especially interested in using this possibility, as Latvia is located in the vicinity and is a tourist destination due to its unique cultural monuments, well-known resorts and international festivals.

What is the benefit of holding residence permit?
A residence permit is a document that gives a foreign citizen the right to temporarily (a temporary residence permit) or permanently (a permanent residence permit) stay in the Republic of Latvia.

A temporary residence permit gives a foreigner the right:

to stay in the Republic of Latvia for a period of time not exceeding five years;
to freely cross borders of EU Member States and non-EU countries;
to move and stay up to 90 days within the territory of other EU countries except for the United Kingdom, Ireland, Cyprus, Bulgaria and Romania;
to obtain a Latvian or EU permanent residence permit after five years;
to obtain temporary residence permits for the spouse and children.
How to apply for residence permit?
A residence permit is needed if you want to stay in the Republic of Latvia or in Schengen area for more than 90 days in a six-month period.

This document is executed in the form of visa and pasted in the passport indicating the person’s name, surname and the identity number.

A temporary residence permit may be obtained by:

Investing in real estate after 1st July 2010;
Investing in Latvian credit institutions;
Investing in the equity capital of an enterprise.
Conditions on investing in real estate:

the total amount of transaction (involving one or several real estates) must be at least EUR 143,000 in large cities or at least EUR 72,000 in other places;
only non-cash funds may be used for purchasing real estate;
a foreigner does not have and has never had any debts of payments of real estate tax in Latvia;
the transaction is concluded after 1 July 2010;
a residence permit is issued after registering the ownership in the Land Register.
Conditions on investing in Latvian credit institutions:

the amount of financial investments must be at least EUR 286,000;
the term of transaction must be at least five years without the right to terminate it prior to the term of repayment of the deposit. Conditions on investing in the equity capital of an enterprise:
the amount of investment must be at least EUR 36,000;
the amount of taxes payable for the next year must be at least EUR 28,600.
Duration of process
The time for obtaining a residence permit in Latvia includes the period necessary to review the submitted documents which is 5 to 30 days depending on the amount of fee paid. Additional time may be needed for sending documents by mail. If an additional verification by the foreigner is necessary or if a foreigner applies for residence permits for his or her spouse and minor children, the term can be extended for up to 90 days. A foreigner has to come to Latvia to obtain a residence permit no later than three months after being granted the permit.

Statistics
According to the Office of Citizenship and Migration Affairs (PMLP), 2495 temporary residence permits were issued in 2010 indicating a high demand for this service. It is also worth mentioning that the amendments to the Immigration Law of 20 January 2011 simplified the bureaucratic component of services making them even more accessible.

Foreign undertakings or organizations may establish representative offices or register official representatives in the Republic of Latvia.

Representative offices (representatives) do not have the right to conduct business. The objective and task of such representative offices is mostly the promotion of a foreign undertaking or organization in the Republic of Latvia or the Baltic region as a whole.

The representative office is a part of a foreign undertaking or organization, which is situated in the territory of the Republic of Latvia and is not considered an independent legal entity.

The state fee amounts to EUR 29 and the application at State Registry will be considered within 15 days. Depending on the paid state fee, the time might be reduced up to two business days.

The tendency of Latvian entrepreneurs to set up companies in other Baltic States is becoming more common. Lithuania's accession to the European Union (EU) in 2004 provided not only additional advantages for companies on the territory of Lithuania, but also in the member states of the EU and the countries that are members of the Commonwealth of Independent States are an opportunity for more successful development of economic relations between Latvia and Lithuania.

Registration of Lithuanian companies is carried out by the State Registration Center. The registry center is a state-owned company with limited civil liability. It was established on July 8, 1997 by the Ministry of Justice of the Republic of Lithuania with state funds.

The main function of the registry center is the administration of the following three main registries of the state:

real estate register;
register of legal entities;
address register.
The Center for Registers took over responsibility for the registration of legal entities from local governments in 2004; However, company data has been recorded by the register since 1990.
In fact, the register center in the Lithuanian public sector is considered to be an excellent example of creating and developing a system of register databases.
The Ministry of Justice of the Republic of Latvia believes that the most suitable form of company for the management, maintenance and development of registers is precisely a state-owned company that can generate profits, as it offers more opportunities to improve the efficiency of the registration process. In contrast to the institutions funded from the state budget, a state-owned company also has the opportunity to attract suitable information technology (IT) specialists and ensure the development of IT.

Register of legal entities
The register contains complete information and historical data on the form and status of legal entities, their areas of activity, size, as well as information on representatives, members, governing bodies and obtained licenses, etc. of legal entities. Since 2004, most companies have had to comply with the obligation to submit annual financial reports to the register. In addition, since 2010, private limited companies are required to prepare a list of shareholders by submitting this information to the registry center.
In practice, the Register of Legal Entities applies the principles of transparency and publicity, as information on legal entities – companies, institutions and non-governmental organizations – is public.

Extracts from the register of legal entities, annual reports, lists of shareholders or other documents, such as minutes of board meetings, are kept in the archives of the register center and are available to all interested persons. This is a paid service.

2010. In 2010, the Registration Center launched online electronic registration of legal entities. Since no documents are submitted in written form when using this service, a secure electronic signature is required. Until now, online registration of legal entities was only available to Lithuanian citizens, but the Center for Registers is actively working to ensure equal opportunities for foreign investors to use this service. That is why the e-guide for company formation is now being launched in Lithuania to provide foreign clients with the necessary support by providing them with information on how to carry out incorporation and registration procedures.

According to Andrejs Rjabcevs, public relations manager of the Office for Citizenship and Migration Affairs (OCMA), the Supreme Court on Thursday ruled to reject the naturalization board's request to revoke the Latvian citizenship of doctor of physics Uldis Bērziņš despite the fact that that he received Swedish citizenship in 2007 is an unprecedented case.

“It is now obvious that this decision is somewhat unique and unprecedented in the jurisprudence, since about a hundred cases about the deprivation of Latvian citizenship due to the acquisition of citizenship of another country are answered in court every year, but until now since For more than ten years, the opinion of the court in such cases has been constant,” Ryabcevs admitted.

Accordingly, it would be important for the OCMA to first understand what arguments and reasoning the Court acted upon in this case, and only then can it determine whether the Supreme Court's decision applies to all cases of dual citizenship or only to this case.

“First, the OCMA wants to get acquainted with the full text of the verdict, and only after that will it decide on further actions – whether to appeal this verdict or not,” Rjabcevs said.

The Supreme Court reportedly today denied the Citizenship Board's claim to strip Latvian citizenship of PhD physicist Uldis Bērziņš, who acquired Swedish citizenship in 2007.

In 2007, after acquiring Swedish citizenship, the scientist created a situation of dual citizenship, accordingly, the naturalization board filed a lawsuit with the court for deprivation of Latvian citizenship. Today's Supreme Court ruling contradicts the Riga Regional Court's 2009 ruling, which upheld the naturalization board's claim and stripped Bērziņš of Latvian citizenship.

The newspaper Neatkarīgā reported that Bērziņš received Swedish citizenship in 2007 because it was necessary for his work; However, all this time the scientist has been actively collaborating with the Institute of Atomic Physics and Spectroscopy (IAPS) of the University of Latvia (LU), developing various projects, attracting resources and looking for an opportunity to return to Latvia.

The scientist's representative in court, Māris Jansons, stated: “We believe that the citizenship law allows maintaining dual citizenship in such cases, and this is a situation from which Latvia would only benefit if Bērziņš retained Latvian citizenship. " .

The Citizenship Act states that citizenship is a permanent association of a person with the state. Since Bērziņš started working as a senior scientist in a high-tech company in Sweden in 2000, he has not lost his connection to the motherland as his entire family lives here.

“If it comes to that, we are ready to sue even before the Constitutional Court and we will try to change the previous legal practice. The situation has now changed significantly as many people are leaving Latvia and the state should be interested in their return, so the question arises as to how to apply this law in the current circumstances. Of course we could get Bērziņš to get citizenship on the basis of special merit, but that is not correct in principle because it is obvious that the system does not work properly that way.' Jansons said at the time.

Supreme Court press secretary Baiba Kataja said that the Civil Cases Chamber of the Supreme Court on Thursday rejected the request by the Office for Citizenship and Migration Affairs (OCMA) to strip the Latvian citizenship of scientist Uldis Bērziņš, who also acquired Swedish Citizenship.

The Office of Citizenship and Migration Affairs filed a claim with the court, because an inspection revealed that in 2007 Bērziņš had acquired Swedish citizenship. The Riga Regional Court decided to satisfy the claim of the OCMA, but Bērziņš appealed this decision.

After adjudicating the case in the first instance, the Riga Regional Court satisfied the claim on November 27, 2009 and deprived Bērziņš of the citizenship by pointing out that the Citizenship Law does not allow dual citizenship. The court of first instance also stipulated that the legal provisions of the Citizenship Law do not give any basis for the court to evaluate defendant's character and contributions to the science in Latvia, when making the decision on deprivation of citizenship.

In the appeal hearing, the representative of Bērziņš, stipulated that the defendant had a strong connection with Latvia that it is enduring and important to him, and requested the court to evaluate it. The representative of the defendant asked to take into consideration the proportionality principle by evaluating not only the fact that Bērziņš was a doctor of physics and had contributed to the development of science in Latvia, but also how the situation in Latvia had changed during the last years with many people leaving to work abroad, but still having a close connection with Latvia, because their families live here, and actively taking interest in the events in the state and participating in the elections.

The representative of the defendant also drew the attention to the amendments to the Citizenship Law, which had been submitted to the Saeima and would foresee the dual citizenship. These amendments were accepted already in the first reading. The representative of the OCMA did not accept the appeal and sustained the claim.

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