Why NOW is a good time to open your office in Latvia?
Recent years we can observe notable changes in startup ecosystem in Baltic countries. It is good news not only for local Baltic startups, but also for young entrepreneurs that want to start their IT business and are thinking of where to launch their first MVP.
Latvia has something to offer and also more perks will come soon. This article will help you to understand what Latvian startup ecosystem can offer to you.
First, let’s start with some overall advantages for starting in or relocating to Latvian capital — Riga.
Transportation. Startups should think globally from the day one, so it is crucial to be able to connect to biggest hubs on a regular basis. You will not be locked in Riga, you can book a flight to popular European cities like London or Berlin as cheap as 50 EUR both directions. We have two low-cost airlines flying to UK and Germany every day (ryanair.com, wizzair.com).
Flights are short and regular, that gives you flexibility on planning your work week.
Pricing level. This is crucial for an early company. Raising the same amount of capital will lead you 2–4 times further in product development if you will be located in Riga in comparison to UK, Germany, Spain and mainly all EU countries with some exceptions. In other words with the same amount of money, you will have more time to built what you want. Other examples: Rent of a nice 2 room flat in city center will cost you around 400 EUR per month + utilities. Tasty business lunch — 5–6 EUR, co-working space starts from 100 EUR per month.
Community. Over past few years, we have seen expansion in amount of meetups, breakfasts and other nice community gatherings happening in Riga. You can visit a meetup of developers interested in AI, which is held in Microsoft offices, Riga Marketing Lab — meetup about digital marketing or you can visit some of the cool meetups organized by many co-working spaces. BTW, we have very affordable and stylish co-working spaces, where you also can get a private office if needed (some of my favorites and most active — TechHub Riga, Teikums, OraculetangSpace, The Mill Riga, Darbavieta).
Check their FB pages to see all meetups happening there. Also I recommend you download meetup app (www.meetup.com/apps) to see what other gatherings there are.
Resources. We have 4 universities with IT specialties (also budget places available for most hard-working) and plenty of IT courses in Riga. This is because we have healthy demand from people, who wants to learn how to code. Most of them are proactive and willing to join some interesting startup/company to work for. What we are proud of, is that there are many young talented developer who are already notable on the world scene. Check this link to see who participated in famous International Olympiad in Informatics and won honored places (stats.ioinformatics.org/delegations/LVA/2015) or read about Latvian University team participating in ACM International Collegiate Programming Contest (in Latvian — on kursors.lv)
Cost of employee. This goes together with a pricing level in the city, but I just wanted to point on some important details.
Availability of high qualified resources together with low salaries (comparing to average salary in Europe) makes Riga a perfect place for opening a development office in Latvia. If your team is growing and you don’t want to relocate you can open your own development office here or hire a outsource team. It will be a smart decision.
For you as employer, cost of salary will be equal to 1,80 multiplied by salary of employee wants to receive on hand. Also here Latvia has somethng to offer you. Check info about Startup law below.
Internet. This already have been discussed for a while. Latvia has TOP 10 fastest internet connection in the world .
It is not just fast, it is available almost everywhere and the prices are fair. For example, 15 EUR per month for 500mbit/s speed.
Mobile data? No problem, get your unlimited 4G starting from 10 EUR per month (providers — tele2, bite, lmt).
Events. Startup events are super important for startups to get connections with investors, practice pitch or just have fun.
In Riga we have two notable events (one in November — Digital Freedom Festival, another in February — Techchill.co), both are growing each year.
Also in less than a 4 hour ride on bus you can visit Estonian biggest event Latitude59 (latitude59.ee) or Lithuanian LOGIN (login.lt/en).
If you want to visit one of the biggest European events, then book a 40 min short flight to Helsinki and visit SLUSH. Flight tickets are about 100 eur both directions.
VC’s and accelerators. This is a hot topic :) Although we had only few VC funds few years ago, now we are waiting to have more players in the market. In Riga you can find offices of already mature players with great portfolio like Rubylight VC, or Social Discovery Ventures, government supported VC (Imprimatur, ZGI, Expansion capital) as well as
new enthusiastic players with experience in the field are right now entering the market (Change Ventures). Lithuanian and Estonian VC are open to co-invest in Latvian based companies.
Last, but not the least — 15M EUR will be divided among 3 newly established acceleration funds this summer More info: 15 M EUR.
These funds will invest in 100+ early — stage companies, which is also important to establish a deal flow for later stages.
You know what that all means? Ecosystem already has money! So you need to prepare your product and launch. These new investors will actively look for new investment opportunities. Closing topic about financial support,I have to mention that Estonian B2B accelerator Startup Wise Guys is for the second time opening a batch in Riga and you can be among them too (startupwiseguys.com). BTW, it is the first accelerator which used crowdfunding to rise a fund (www.eu-startups.com/2016/12/startup-wise-guys-is-europes-first-accelerator-to-sucessfully-raise-funding-via-equity-crowdfunding/).
Business angels. Local Latvian Business Angel Association also showed good expansion, already invested 8.4M EUR in different projects and organizing events monthly (latban.lv). Now they have awesome co-invest program supported by Altum, which means, that when raising from LATBAN angels, you will be able to get the second part from the Altum as a loan with friendly terms.
Startup tax. This gonna be a killer! If you raised at least 30k EUR investment from a qualified VC fund, then you can apply to Startup tax. It allows you to pay only 259 EUR fixed monthly tax per employee (plus private pension fund contribution paid by employee, in average — 124 EUR) and nothing more. There is also other option for highly experienced specialists —alternatively start-up can get full employee taxes paid from EU funds under highly skilled employee program (as I understood, during this program you get back paid taxes within some time frame). More info about both options: here.
The last, but not the least — Riga is beautiful! Check this out: www.tripadvisor.co.uk/Attractions-g274967-Activities-Riga_Riga_Region.html
Still thinking of starting your first startup or relocating to Riga? Now is the best time to get on that plane!
Also check Teleport to see more info about Riga as a place to work/live.
P.S. It’s not a full list of what is happening here, It is just a quick intro to motivate you to dig deeper. Start-up Visa for founders and employees, Seed and growth capital funds with 60 million EUR public funding are the next big things. Feel free to contact me if you have some questions about the ecosystem.
Good luck!
