Investors’ concerns are linked to the efficiency of Latvia’s public administration, Foreign Investors’ Council in Latvia (FICIL) board member and Nasdaq Riga CEO Liene Dubava told the media on Thursday.
She explained that FICIL conducts an annual sentiment index survey, in which foreign investors are questioned about their overall mood, including satisfaction levels and problem areas. Last year, the study was carried out across the Baltic States, also covering Lithuania and Estonia.
Dubava noted that overall investor sentiment, despite geopolitical challenges and developments in the global environment, remains cautious but at the same time optimistic.
Speaking about caution and investor concerns, Dubava said that the dominant issue is the effectiveness of government performance. In this area, Latvia has received the lowest investor rating among the Baltic States, with concerns mainly related to various aspects of public administration efficiency.
According to investors,
FICIL has identified three main priorities for ensuring an effective public administration.
The first and most important is ensuring fair competition. Foreign investors point out that there are competition risks and potential market distortions, often caused by state-owned enterprises. Investors emphasize that it is essential for all companies in a free-market economy to operate under the same rules.
Dubava also noted that investors are questioning whether all state-owned enterprises really need to remain in state ownership if they compete with the private sector. At the same time, investors believe that minority stakes in large state-controlled companies could be listed on the stock exchange, which would promote more transparent governance, improve company performance, and encourage fairer competition in the market.
The second priority is public procurement procedures. In this area, investors highlight excessive bureaucracy, including the large volume of required documentation, as well as competition risks. At the same time, FICIL acknowledges that steps have been taken toward improvement and supports legislative amendments submitted to the Saeima, hoping for practical changes in the near future, Dubava said.
The third priority identified by investors is the overall efficiency of public administration.
Investors expect a professional, responsible, and service-oriented public administration workforce that can provide necessary approvals and permits as quickly as possible and without unnecessary bureaucracy. In investors’ view, such an approach would significantly improve Latvia’s business environment.
Dubava also noted that investors express concerns in areas not directly related to public administration efficiency. These include the quality of education, labor availability, and the slow progress in combating the shadow economy.
Speaking about positive trends, Dubava highlighted the increase in defense spending as one of the most important factors noted by foreign investors. The government’s decision to prioritize defense financing is viewed positively, as it opens opportunities for the development of new industries in Latvia and encourages technological innovation.
Investors also positively assess the availability of European Union funding.
They are satisfied with relatively moderate labor costs and with infrastructure development, including digital solutions in public administration, which, in their view, have made processes simpler, clearer, and more understandable.
At the same time, Dubava emphasized that all surveyed foreign investors across the Baltic States agree that closer regional cooperation would bring significant benefits. Priority areas for such cooperation include defense, infrastructure, and energy—fields where cooperation already exists to some extent but could be further strengthened, according to investors.
Overall, investor sentiment is positive; however, investors expect clear and targeted action from the government in areas that have already been identified as priorities. Dubava stressed that competition for investment and investor capital is intense, and slow, incremental improvements may not be sufficient. Ambitious goals, bold decisions, and decisive action are needed.
The Director of the Investment and Development Agency of Latvia (LIAA), Ieva Jāgere, said that
in 2025 Latvia succeeded in attracting investments worth one billion euros
—54% more than in 2024. In total, 31 projects were implemented, which are expected to create 1,350 jobs in the future.
By country of origin, the largest investments last year came from Lithuania (€401.7 million), followed by Ukraine (€125 million), the Netherlands (€120 million), Germany (€100 million), and Austria (€80 million).
Jāgere noted that Latvia is currently implementing three projects from Sweden, Finland, and Armenia, two projects each from the United Kingdom, the United States, Lithuania, Ukraine, and Australia, as well as projects from 12 other countries.
Investment distribution by sector shows that the largest sums were invested in knowledge-intensive bioeconomy projects (€460 million), smart energy (€428 million), manufacturing (€34 million), digitalization projects (€21 million), the defense sector (€20 million), and other sectors (€48 million).
Last year, projects were mainly concentrated in Riga,
where 20 projects were implemented. Two projects each were registered in Vidzeme, Latgale, and the Pierīga region, while four projects were carried out in Kurzeme.
Jāgere said that LIAA has set a target of attracting at least one billion euros in investment in 2026. Work will therefore continue with LIAA’s investment portfolio, which currently includes around 180 projects with a total investment potential exceeding €17 billion.
As reported, on Thursday LIAA and the Ministry of Economics announced Latvia’s 2025 investment attraction results at a press briefing. The event provided an overview of the volume of investments attracted in 2025, the largest and most significant investment projects, the investment climate, and future plans for working with investors. The briefing was attended by Minister of Economics Viktors Valainis (Union of Greens and Farmers), Ieva Jāgere, and Liene Dubava.
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