Enhanced Perspective Towards Business Conduct in Latvia by Investors
The Baltics, and particularly Latvia, are garnering increased attention from foreign investors, as evidenced by the recent conference titled "Beyond Borders: Investment & Security in the Baltics", which took place on May 26.
At the conference, Latvia's Prime Minister, Evika Siliņa, emphasised that Latvia is a safe and stable place to invest. Siliņa also highlighted the country's efforts in defence and stability, which have been praised by foreign investors.
The report presented at the conference was a collaborative effort by FICIL, the Stockholm School of Economics in Rīga (SSE Riga), and Riga Business School (RBS) of Riga Technical University. The report revealed that the investment attractiveness of Latvia has improved significantly, with the Index score rising from 1.9 to 3 over the last year.
The survey findings suggest that businesses in the Baltics are increasingly recognising the region's synergy potential, particularly in areas like digitalization, green energy, and infrastructure. Reinhold Schneider, the Chairperson of FICIL's Board, spoke at the conference and emphasised the Baltics' resilience and regional unity as strategic assets.
The latest Sentiment Index data indicates that approximately half of foreign investors in Latvia and Estonia, and about 38% in Lithuania, plan to increase their regional investment. The Sentiment Index report is available for more details on the findings at the FICIL website: https://www.ficil.lv/sentiment-index/
Siliņa also mentioned that Latvia values long-term partnerships as much as fresh investment. The Prime Minister highlighted the country's efforts to reduce bureaucracy, invest in security, and develop digital and AI sectors to make Latvia more competitive.
The Baltic M&A market showed strength in the first half of 2025, with growing deal values and notable startup activity, especially in tech sectors like AI, cybersecurity, and defence. Foreign investors and financial institutions, such as the European Bank for Reconstruction and Development (EBRD), are actively supporting green and innovative projects in the region.
For example, Sunly, a Baltic-based renewable energy company, received nearly €85 million in international financing to develop hybrid solar parks, which will increase Latvia's solar capacity by approximately 50%, enhance energy independence, and boost local economies.
Investor sentiment remains cautiously positive but highly selective, with dealmakers emphasising strategic alignment and execution capability due to geopolitical and economic uncertainties currently impacting deal flow and timelines. However, the involvement of major institutions like the EBRD and the EU's InvestEU program underlines confidence in the Baltics' sustainable investment potential, especially in energy transition and innovation sectors.
In 2024, foreign direct investment in Latvia reached more than 26 billion euros, which is 65.4% of the country's GDP. The CEO of the German-Baltic Chamber of Commerce, Florian Schröder, commented that the Baltics should improve their marketing efforts to highlight the great investment opportunities available.
As the Baltics continue to demonstrate resilience and strategic growth, foreign investors are increasingly recognising the region as a promising destination for investment.
- The government of Latvia, through Prime Minister Evika Siliņa, is actively encouraging foreign investment, highlighting the country's stable environment, synergy potential in digitalization, green energy, and infrastructure, and long-term partnerships.
- The European Bank for Reconstruction and Development (EBRD) and other financial institutions are supporting innovative and green projects in the Baltics, such as Sunly, a renewable energy company that received €85 million to develop hybrid solar parks.
- The Baltic M&A market has shown strength in the first half of 2025, with growing deal values and notable startup activity, particularly in tech sectors like AI, cybersecurity, and defence.
- The EU's InvestEU program and the involvement of major institutions like the EBRD underscore the confidence in the Baltics' sustainable investment potential, especially in sectors like energy transition and innovation.
