Latvia’s information and communications technologies (ICT) market is experiencing rapid growth, driven by government initiatives and the increasing demand for business digitalization. There are a rising number of tech startups and global business centers, supported by a well-developed IT infrastructure that fosters innovation and digital transformation. Key focus areas include fintech, e-commerce, and digital government services, which attract international investors and companies looking to expand their ICT presence in the region.
Information and communications technologies market in Latvia
Key opportunities for Canadian ICT companies in Latvia
- Demand for diverse ICT services: Latvia imports a wide range of ICT services to strengthen its evolving digital landscape and support various business and government sectors. Key areas of import include software, IT consulting, cybersecurity solutions, cloud computing and related services. The country also imports computers and related equipment to complement its growing technological infrastructure.
- E-commerce enablement and support: As Latvia's e-commerce sector continues to develop, there is an increasing demand for sophisticated logistics, payment integration, and digital marketing solutions.
- Research and development collaboration: Latvia is striving to position itself as a leader for industrial and innovative applications of 5G technologies. This creates opportunities to collaborate on research and development projects. As part of its 5G strategy, Latvia is also exploring smart city applications, including Internet of Things (IoT) solutions for urban management, transportation, and public services. Working with local universities and research institutions can help share knowledge, drive innovation, and open opportunities for Canadian companies to join joint research projects.
Industry highlights
6% contribution from ICT to Latvia’s GDP in 2023.
€5.2 billion in annual turnover, with 49% of services exported.
42,100 ICT specialists in Latvia in 2023.
First in mobile data usage for OECD countries.
87% of public services are digital.
One 5G military test site.
Notable challenges for Canadian ICT companies in Latvia
- Regulatory compliance: Understanding and adapting to European Union (EU) and local regulations (especially in the fintech and data protection sectors) may require extra resources. Canadian companies must navigate a complex legal landscape that includes General Data Protection Regulation (GDPR) compliance and sector-specific guidelines. This can require considerable time and financial investment.
- Small domestic market: Latvia's domestic market is small, leading most local companies to focus on larger international markets from the beginning. Canadian firms may face limits in local demand and need to plan for cross-border growth.
- International competition: Latvia’s ICT market is active and competitive, with both international and local players competing for market share. The open market environment attracts a diverse range of companies, including tech giants from the United States and Europe, innovative startups, and global firms looking to grow in the region. These competitors often bring significant resources, advanced technologies, and deep industry knowledge.
Latvia business landscape
Latvia’s ICT sector is supported by several government policies designed to support digital innovation and growth. The government’s initiative promotes the adoption of e-governance services, the expansion of broadband infrastructure, and the development of cybersecurity strategies. Active projects include building data centers, upgrading digital infrastructure, and enhancing the use of AI in public administration. Latvia’s strategic location within the EU makes it an attractive destination for ICT companies looking for a base in the Baltic region with access to larger European markets.
Summary
Latvia offers a promising market for ICT businesses due to its supportive digital policies and strategic location. Canadian ICT firms can explore many opportunities, including:
- diverse demand for services such as software development
- IT consulting
- cybersecurity solutions
- cloud computing
- a growing e-commerce sector with high demand for related solutions
Latvia may serve as a gateway for Canadian companies aiming to expand their operations within the EU.
For more information on ICT opportunities in the Latvian market, please contact Irena Cirule, Trade commissioner (irena.cirule@international.gc.ca).