Additional support for companies in Rēzekne Special Economic Zone and Latgale Special Economic Zone

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Additional support for companies in Rēzekne Special Economic Zone and Latgale Special Economic Zone

May 18, 2020

On May 14, 2020, the Saeima of the Republic of Latvia adopted amendments to the Law “On Application of Taxes in  Freeport’s and Special Economic Zones ”. Changes in the law will provide additional support for Rezekne Special Economic Zone and Latgale Special Economic Zone companies.

The amendments to the law stipulate that companies with the status of a commercial company of the Rezekne Special Economic Zone will be able to receive support not only for the initial long-term investments made, but also for the expected salary costs. The expected salary costs are the costs of new jobs created in the Rezekne Special Economic Zone as a result of the initial investments.Expected salary costs include gross salary before taxes and are calculated for a two-year period, including the employer's mandatory state social insurance contributions. Important to mention the companies have to provide each workplace with an employee whose declared place of residence is in the Latgale planning region. Moreover, each work place must be maintained for at least five years by the large company and for at least three years by the small or medium-sized company.

Sandra Ežmale, CEO of Rezekne Special Economic Zone Authority, explains more about significance of the amendments in the law: "The extension of the aid to Rezekne SEZ and Latgale SEZ, by providing additional support for the creation of new work places, is important for the development of a attractive commercial environment in Latgale region. We hope that this support will help to attract new companies and investment projects to the region that create well-paid work places, competitive and high value-added products and services."

At present, it is assumed that companies will be able to receive aid for expected salary costs by 31 December 2024, while the aid for initial investment will be applied until 31 December 2035.