In 2024, the Latgale Special Economic Zone (SEZ) achieved significant milestones:
- Investment Growth: Signed 11 investment agreements worth nearly €40 million, expected to create at least 78 new jobs.
- New Partnerships: Welcomed 5 new companies to the SEZ.
- Record Investment: Secured the largest investment project to date, partnering with Light Guide Optics International Ltd. for a high-tech initiative valued in the tens of millions.
- Ongoing Development: Existing SEZ companies launched major projects, including Zelta Zeme Ltd. (peat products), Regula Baltija Ltd. and Pulsar Optics Ltd. (high-tech), and Terlax Ltd. (real estate).
- Sectoral Progress: Engineering, metalworking, and woodworking enterprises demonstrated strong growth within the SEZ territory.
- Recognized Excellence: SEZ companies Reclame Fabriek Ltd. and Pulsar Optics Ltd. were honored with the "Latgale Entrepreneurs' Award 2024."
- International Outreach: Participation in Latvia's largest-ever trade mission to the USA strengthened ties with global investors, showcasing the capabilities of Latgale’s optoelectronics cluster.
Jānis Lāčplēsis, Chairman of the Latgale SEZ Supervisory Commission, emphasized the region's resilience and adaptability amid global economic challenges:
"Despite external factors impacting the economy, the Latgale SEZ Authority remains committed to seeking innovative ways to attract new investors and encourage existing companies within the SEZ to invest in their growth. Today, the competitiveness of businesses increasingly depends on technological advancements, efficiency improvements, and innovation. Technological innovation is precisely what positions Latgale as the Silicon Valley of Latvia."
Key achievements in 2024
The largest investment project in the history of the Latgale SEZ will be implemented
At the end of the year the largest investment agreement in the history of the Latgale SEZ was signed with the Livani-based high-tech leader Light Guide Optics International Ltd., which plans to make significant investments in the development of production in the territory of the Latgale SEZ.
The new investment agreement provides for an increase in fibre optic production capacity through the construction of a production building and the purchase and installation of additional fibre towers, creating at least 35 new jobs. As Iveta Maļina-Tabūne, Head of Administration of the Latgale Planning Region (LPR) and Latgale SEZ Manager, notes: "It is important that each of the new employees hired by this company will be highly qualified specialists. This is a high-tech contribution where job creation can be worth millions".
New Latgale SEZ investors
Last year, in 2024, 5 new companies joined the Latgale SEZ, which will implement investment projects worth EUR 1.8 million, creating at least 25 new jobs:
- Ceram Optec SIA: a fibre optics and medical products manufacturing company in Livani. Its main activity is the production of optical fibres. CeramOptec's standard product range includes Optran UV/WF fibre, which offers excellent transmission performance and very good radiation resistance across the light spectrum. The priority objective of the investment project is to expand the company's production facilities by acquiring equipment to enable the production of new products as well as the planned volume growth.
- Nexis Fibers SIA: The main activity of the company is the spinning of technical fibres (yarns). The main product of the Daugavpils-based company is the production of polyamide six (PA6) fibres. The company designs, develops and supplies its customers with a wide range of products and services in various key market segments: MRG (material rubber goods), industrial yarns for ropes and nets. The company and its group have become one of the leading companies in the industry worldwide. The investment project will purchase the necessary production equipment to develop a competitive production facility.
-Weld SIA: Daugavpils-based manufacturing and metalworking company that signed an investment contract under the project "Acquisition of production equipment to increase the capacity of Weld Ltd". As Weld's main activity is the production of metal parts and structures of varying levels of complexity, the new equipment will significantly improve the company's production capacity, offering customers a full production cycle - from the development of an idea to the quality control of the finished product.
- Biolitec SIA: company engaged in the rental and management of own or leased real estate in Livani. The company has several main activities: rental of commercial premises, rental of residential premises and rental of fixed assets, which are carried out on the basis of concluded contracts. Biolitec Ltd leases a number of real estates owned by it for the operation of the production company Ceram Optec Ltd. The purpose of the investment project is to develop the economic activity by investing in the reconstruction of the real estate.
- Sakars SIA: real estate developer from the Krāslava region. Within the framework of the investment agreement, the company intends to invest in the acquisition of real estate which will provide independent income from the provision of commercial rental services. The project will allow the development of a competitive rental offer in the Krāslava region.
Latgale SEZ companies continue to pursue ambitious development goals.
The Latgale SEZ includes 33 enterprises that benefit from tax incentives for investments in two main areas: the acquisition of equipment, machinery, buildings, patents, or technology, and the creation of new jobs.
For instance, Zelta Zeme SIA, a peat product and peat pellet producer based in the Līvāni municipality, signed an investment agreement in 2024 for its project, "Modernisation of the Packing Line." This marks the company’s second investment project, enabling it to enhance production capacity, deliver higher-quality products tailored to market demands, expand its customer base, and fulfill larger orders.
High-tech company Regula Baltija SIA continues to aim higher, building on its achievements. In 2024, the company successfully completed two investment projects designed to enhance production efficiency and create nearly 10 new jobs.
Similarly, Pulsar Optics SIA embarked on an ambitious initiative last year by signing an investment agreement for the project titled "Start-up of the Second Production Line for Electronic Wafers in the SMD Section at Višķu 21F, Daugavpils." This project is set to create 7 new positions, including roles such as electronic assemblers and electronic regulators. The project's successful implementation is expected to deliver significant economic benefits, as both job creation and increased production capacity will contribute to State and local government budgets.
Terlax SIA, meanwhile, has focused its efforts on real estate development within the Latgale SEZ. The company's primary goal is to adapt its premises to meet tenant needs and demands, creating favorable conditions for businesses. By executing its investment project in Daugavpils, Terlax Ltd. plans to create one new job, expand its range of services, and enhance service quality, ultimately boosting the company’s operational capacity.
It should be noted that the projects of the capital companies already implemented during the last year also confirm the development of mechanical engineering - metalworking and woodworking enterprises located in the territory of Latgale SEZ: in the field of mechanical engineering-metalworking innovative products with high-precision mechanisms are created for such industries as mechanical engineering, energy, aviation and medicine, while woodworking enterprises have expanded their capabilities and export volumes, offering quality and marketable products.
2 Latgale SEZ companies among the winners of the "Latgale Entrepreneurs Award 2024" competition
On 4 December 2024, the Latgale Business Day 2024, the biggest event of the year, took place at the House of the Blackheads in Riga. During the gala part of the evening, 12 awards were presented to the winners of the competition "Latgale Entrepreneurs' Award 2024" in 11 nominations. We are proud that two Latgale SEZ companies received the awards - in the nomination "Special Economic Zone Company of the Year in Latgale": SIA "Reclame fabriek", a professional manufacturer of marketing signs from the Augšdaugava region. Reclame fabriek Ltd. is a professional sign-maker and a professional professional company in the LSEZ with the most modern and precise equipment, which ensures the creation of modern and competitive products - in recent years Reclame fabriek Ltd. has introduced several unique products in the world into mass production. 99% of the factory's production is exported to both Europe and the USA, and the company has gained a great reputation by working with several world-famous brands.
In the "Innovation of the Year" category, the award went to Pulsar Optics Ltd. Every year, the company surprises with new and innovative products, ensuring its main goal - to be a leader in the production of optical devices for thermal night vision. "Pulsar Optics is not only a leader in technology, but also takes care of enriching and cleaning up the urban environment of Daugavpils.
Legal Amendments Unlock New Opportunities for Business Growth
At the beginning of last year, amendments to the "Law on Taxation in Free Ports and Special Economic Zones" were introduced, creating expanded opportunities for business development in the Latgale region and its Special Economic Zone.
The updated legislation allows investors to classify newly created jobs as investments by calculating the total of two years' wages and taxes for those positions. These amounts can now be considered qualifying investments in special economic zones, including the Rēzekne and Latgale SEZs.
Additionally, amendments related to non-assisted sectors represent a significant advancement in fostering business growth. Companies in the chemical fibre sector can now remain in the list of assisted sectors, making them eligible for state-guaranteed tax rebates when investing within SEZs. These changes aim to enhance competitiveness and encourage investment in key industries.
Exhibitions, Conferences, and Forums: Paving the Way for International Recognition of Latgale SEZ
"Participating in international exhibitions and forums is a vital initiative that not only promotes the offerings of the Latgale SEZ to foreign entrepreneurs but also allows our team to stay updated on the latest industry trends. Our primary objective is to identify and attract potential investors by showcasing the unique advantages of the Latgale SEZ," explains Vladislavs Stankevičs, Deputy Governor of the Latgale SEZ.
In September 2024, Iveta Maļina-Tabūne, Manager of the Latgale SEZ, joined Latvia's largest-ever trade mission to the USA, organized by the Latvian Investment and Development Agency (LIAA). Accompanying the President of Latvia, E. Rinkēvičs, and Minister of Economics, V. Valainis, alongside over 60 entrepreneurs, the mission provided a platform to establish valuable connections with US businesses and partners. The visit also strengthened collaboration with investors from leading global technology companies, reinforcing the capabilities of Latgale's Optoelectronics Cluster.
Throughout 2024, the Latgale SEZ Administration actively participated in several international exhibitions and forums across the Baltic and Scandinavian countries, as well as in Germany and the UK. These events offered opportunities to align with the interests of Latgale's entrepreneurs, monitor global industry trends, and foster strategic partnerships that promote Latgale SEZ as a competitive and attractive investment destination.
Attracting Investors: A Complex and Long-Term Commitment
Established in 2017, the Latgale Special Economic Zone (SEZ) offers significant tax incentives to companies that invest in their development or create new jobs. Businesses can benefit from an 80% reduction in corporate income tax and up to 100% exemption from real estate tax. A unique advantage of the Latgale SEZ is its flexibility: companies can establish and grow their operations in any area within the region, as SEZ status can be granted regardless of location or size, provided the business activities take place in Latgale.
As one of the region's most important business support mechanisms, the Latgale SEZ continues to play a pivotal role in fostering economic growth. Its active efforts to attract both local and international investors open doors to further development and innovation.
"Developing the business environment in Latgale is a multifaceted, long-term effort that requires action on many fronts. It is essential to expand our reach, particularly abroad, and to build long-term partnerships with potential collaborators. Thinking ahead, we must establish a strong presence not only in EU countries but also on the global stage," said Jānis Lāčplēsis, Chairman of the Latgale SEZ Supervisory Commission.
Latgale SEZ—your gateway to business success!
For information on the requirements set out in the law that investments must meet when applying for SEZ direct tax benefits, as well as more detailed information on the operating rules of the Latgale SEZ and the documentation to be submitted, please contact the Latgale SEZ Board: e-mail: lsez@lpr.gov.lv, phone.: +371 26511047, www.invest.latgale.lv
Additional information:
Latgale Special Economic Zone, tel. +371 29957750
