The FICIL Sentiment Index 2018 has been published

For the fourth year in a row, FICIL carried out the FICIL Sentiment Index research together with Dr Arnis Sauka from SSE Riga. 40 companies were interviewed – these companies (including their subsidiaries) contribute to 9% of Latvia’s total tax revenue, 18% of total profit and employ 4% of the total workforce out of all companies above a 145000 EUR turnover and 50% foreign capital (data from Firmas.lv). Altogether, the number of companies in which foreign capital accounts for at least 50% and whose turnover exceeds EUR 145 000 represents one fifth of all Latvian companies, paying 48% of all taxes in the country, as well as employing 27% of workers. 

Julia Sundberg, FICIL Chairperson of the Board: “Although at the moment investors still feel relatively good in Latvia because of the economic upturn, years of unresolved issues like the demographic downturn, availability and quality of workforce, corruption, shadow economy and others not only pose a risk that no new investment will enter Latvia, but also that existing investment might leave. This is why FICIL hopes this report can be used as a constructive tool for Latvian policy makers to improve the overall competitiveness of Latvia’s business environment.”

Arnis Sauka, professor at SSE Riga: “By analysing responses of the investors over the past four years and seeing the dynamic data, it can be concluded that some problems have been partly treated and are not as painful anymore; some problems have become chronic and everyone has learned to live with them; while some have just become acute and no actions can cost a lot not only to investors but to the general economy of the country.”

While investors point out that the situation has improved slightly during 2018 in regards to the tax system, demography and health care system, and progress in these areas is achieved at least “partly”, the situation with the availability of labour, on the other hand, has become more critical compared to the previous year. The majority of foreign investors interviewed have also expressed dissatisfaction with no improvements regarding uncertainty. Also, while the investors’ views on the quality of the legal system and business legislation remain unsatisfactory, the progress in these areas, however, has slightly improved compared to 2017.

Find out more on FICIL website.