In brief
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Latgale Planning Region Development Council has agreed on a proposal to designate a Latgale Special Economic Zone (Latgale SEZ) territory in Alūksne Municipality.
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A territory of 2,000 hectares is planned to be designated in Alūksne Municipality where the SEZ regulatory framework could be applied.
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The proposal will be submitted to the Ministry of Smart Administration and Regional Development for further submission to the Cabinet of Ministers for approval.
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Saeima has adopted amendments extending the operation of the Latgale SEZ until 31 December 2050 and including Alūksne Municipality within the SEZ territory.
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State funding of EUR 1.2 million is allocated for the development of Latvia’s eastern border region until 2027.
Development Council agrees on the proposed territory
On 12 March, a meeting of the Latgale Planning Region Development Council took place, attended also by Dzintars Adlers, Chairman of the Alūksne Municipality Council. During the meeting, the Council agreed on a proposal to define the territory within Alūksne Municipality that could be granted the status of the Latgale Special Economic Zone (Latgale SEZ).
The proposal foresees the designation of a 2,000-hectare area in Alūksne Municipality that could be subject to the Latgale SEZ regulatory framework in the future. At the same time, the territories of the other municipalities currently participating in the Latgale SEZ are planned to remain unchanged.
According to the Law on the Latgale Special Economic Zone, proposals regarding territories eligible for SEZ status are prepared by the Development Council of the Latgale Planning Region in agreement with the respective municipality. The proposal is then submitted to the Ministry of Smart Administration and Regional Development, which proceeds with the approval process in accordance with national legislation and submits it to the Cabinet of Ministers.
Government approves action plan for eastern border development
The decision is based on the government-approved Action Plan for the Economic Growth and Security Strengthening of Latvia’s Eastern Border Region for 2025–2027, adopted by the Cabinet of Ministers on 20 January 2025 (Order No. 32).
The plan includes a range of measures aimed at improving the business environment and attracting investment to the border regions, including strengthening the capacity of the Latgale Special Economic Zone. The action plan provides for:
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expanding the Latgale SEZ territory by including Alūksne Municipality;
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strengthening the administrative capacity of the SEZ to prepare high-quality investment offers and support foreign investor projects;
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evaluating the possibilities for expanding the sectors eligible for SEZ support.
Saeima adopts amendments to the Latgale SEZ Law
On 12 February 2026, the Saeima adopted amendments to the Law on the Latgale Special Economic Zone in its final reading, introducing two significant changes:
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the operation of the Latgale SEZ has been extended until 31 December 2050;
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Alūksne Municipality has been included in the SEZ territory, expanding the zone beyond the borders of the Latgale Planning Region.
The inclusion of Alūksne Municipality in the Latgale SEZ was supported by 87 Members of Parliament, with no votes against or abstentions.
Earlier, on 3 February 2026, the Saeima Committee on Economic, Agricultural, Environmental and Regional Policy proposed extending the operation of special economic zones until 2050, emphasising that such a decision will provide businesses with long-term stability and predictability for investment planning.
Development Council agrees on defining the SEZ territory
Based on the government action plan and the amendments to the Latgale SEZ Law, the Development Council of the Latgale Planning Region discussed the issue of defining the Latgale SEZ territory in Alūksne Municipality.
According to the Council’s decision:
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a 2,000-hectare territory is planned to be designated in Alūksne Municipality for potential SEZ status;
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the territorial allocations of the other municipalities within the Latgale SEZ will remain unchanged;
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the proposal regarding the territory will be submitted to the Ministry of Smart Administration and Regional Development, which will forward it to the Cabinet of Ministers for approval.
The decision was adopted in accordance with Article 3(3) of the Law on the Latgale Special Economic Zone, which stipulates that proposals for SEZ territorial distribution are prepared by the Development Council of the Latgale Planning Region in agreement with the respective municipality.
Amendments approved to the regulations of the Latgale SEZ Administration
During the meeting, the Development Council also approved amendments to the Regulations of the Latgale Special Economic Zone Administration. The decision was adopted in accordance with Article 6(2) of the Law on the Latgale SEZ and Section 14.1 of the Regulations of the Latgale Planning Region.
The amendments are related to the expansion of SEZ activities and the further improvement of administrative operations.
SEZ – an important instrument for regional development
The Latgale Special Economic Zone, established in 2017, is the newest of the special economic zones in Latvia. Companies operating within the SEZ territory and investing in development or the creation of new jobs are eligible for tax incentives of up to 80% corporate income tax relief and real estate tax relief.
Over eight years of operation, the zone has become one of the most significant regional development instruments in Latvia. While initially the total turnover of SEZ companies was around EUR 20 million annually, in recent years it has exceeded half a billion euros.
In 2024, eleven investment agreements were signed within the Latgale SEZ with a total value of nearly EUR 40 million, creating almost 80 new jobs. In 2025, nineteen new investment projects were launched worth almost EUR 12.5 million, creating at least 83 jobs.
At the beginning of 2025, the Latgale SEZ brought together 39 companies with a total of 98 investment agreements worth more than EUR 114.2 million, which have already created around 700 jobs in the Latgale region.
The SEZ territory has also become home to a strong cluster of optoelectronics companies, often referred to as the “Silicon Valley of Latvia”, where internationally competitive enterprises operate in the fields of optics, electronics and technical fibres.
A signal to investors about long-term development
The extension of the Latgale SEZ until 2050 and its territorial expansion send a strong signal to investors about the region’s long-term development strategy and the continued commitment to strengthening economic growth and innovation in Latvia’s eastern border region.
Chairman of the Development Council of the Latgale Planning Region, Aldis Adamovičs, emphasises:
“The inclusion of Alūksne Municipality in the Latgale Special Economic Zone is an important step for the development of Latvia’s eastern border region as a whole. It sends a clear signal to investors about the country’s long-term vision for regional growth, while at the same time creating new opportunities for business development, infrastructure modernisation and job creation.”
Chairman of the Alūksne Municipality Council, Dzintars Adlers, adds:
“On behalf of the Alūksne Municipality Council and the municipality, I would like to express our sincere gratitude to the Development Council and administration of the Latgale Planning Region for their support in welcoming Alūksne Municipality into the Latgale Special Economic Zone family and for giving us the opportunity, as a member with voting rights, to participate in decisions related to the future development of the SEZ.
We are also thankful for the allocation of a 2,000-hectare territory in Alūksne Municipality where investments can be made under favourable conditions. This represents both hope and a new opportunity for our municipality to attract new investors and encourage existing entrepreneurs to invest in this border region, particularly in the current challenging geopolitical environment.
It also creates additional opportunities to strengthen cooperation between our entrepreneurs and municipalities across the region, attracting investments in manufacturing and infrastructure development while creating new jobs. We are a small municipality joining this community, but together our strength will be greater.”
Prepared by:
Latgale Planning Region
Photo:
View of Alūksne town and Alūksne Castle Island. Photo by Ainars Gaidis.
