Reducing bureaucracy to attract large investors
The Budget and Finance (Tax) Committee of the Saeima has conceptually supported amendments to the government-approved Commercial Support Control Law, drawn up by the Ministry of Economics. These amendments introduce an exceptional solution for granting state support to large international companies, enabling them to confirm that they do not meet the criteria of a financially distressed company.
The amendments authorise the Cabinet of Ministers to establish conditions and procedures for large enterprises to certify that they are not financially distressed in situations where for objective reasons they cannot obtain financial statements from their affiliated companies registered abroad.
“This is a significant step in strengthening trust between governmental bodies and businesses, ensuring investment inflows and attracting major global players to Latvia. It is a good example of how laws should be written to be practically applicable and devoid of unnecessary bureaucracy,” stressed Jurģis Miezainis, Parliamentary Secretary at the Ministry of Economics.
During the drafting of the amendments, the Ministry of Economics held several meetings with the Foreign Investors’ Council in Latvia and representatives of large international companies. These stakeholders expressed support for the proposed solution and a willingness to accept the risks associated with granting commercial support based on incomplete financial data.
While the Saeima continues to review the amendments, the Ministry of Economics is preparing Cabinet regulations to introduce a certification process to provide support to applicants seeking to confirm that they do not qualify as financially distressed. The support provider will use this certification to assess the applicant’s financial standing. However, the certification will not replace the standard requirement to submit financial data, but will serve as an exceptional measure in special, objectively justified cases where the available financial data is sufficient to confirm the applicant’s financial stability, but does not formally meet full documentation requirements.
Large-scale investment projects are typically undertaken by companies that are part of extensive corporate networks and qualify as large enterprises under EU regulations. In practice, some large multinational corporations face objective challenges in obtaining complete financial data from all their affiliated companies. As a result, even if the company is financially stable, an inability to submit all required financial documents can lead to the rejection of applications for commercial support.
