The product works. The customers are real. Now what? You have a handful of anchor clients in Canada, maybe a few early wins stateside, and a team that’s starting to ask the question you’ve been quietly thinking about for months: Is it time for Europe?
The short answer is probably yes. But where you land in Europe will define how much runway you burn, how fast you can hire, and whether you spend your first year in compliance paperwork or closing deals.
This guide is for founders who are past the “should we go to Europe?” question and into the “how do we do this intelligently?” conversation. It’s built on insights from TBDC’s webinar with Nicolas Lepage, Regional Senior Trade Commissioner for the Baltics at the Embassy of Canada, Ilze Lacgalve of the Investment and Development Agency of Latvia (LIAA), and angel investors Ģirts Līcis and Ansis Spridzans from the Latvian Business Angels Network (LATBAN), grounded in hard data from the Latvian Startup Report 2025 by Startin.LV.
Latvia probably isn’t the first country that comes to mind. That’s exactly why it’s worth your attention.
The European Entry
Problem No One Talks About
Most Canadian founders default to the same short list when they think about EU expansion: Germany for enterprise sales, Amsterdam for scale-ups, or Stockholm because the ecosystem has a great reputation. What they discover is that operating costs are high, hiring timelines are long, and the regulatory environment requires significant legal investment to navigate from scratch.
There’s a smarter way to think about this.
Rather than entering your biggest target market first, consider entering through the market that gives you the best structural foundation to scale into all of them — a complete EU member state with low operating costs, strong technical talent, an English-language business culture, and a government that is actively competing for innovative companies.
As Ģirts Līcis, board member of the Latvian Business Angels Network, put it plainly during our webinar: “If you want to come here just to sell goods in Latvia, that’s the wrong place. But it’s the right place to develop your products, find the right team, and start your operations before expanding into Europe.”
That’s Latvia.
What the 2025 Data Actually Says About Latvia's Startup Ecosystem
This isn’t a “hidden gem” pitch. Latvia’s startup ecosystem has been building for over a decade, and the numbers from the Latvian Startup Report 2025 show a market that has graduated from early-stage to genuinely scale-ready.
- €610M+ in total startup turnover, up 15%+ year-over-year
- €78M raised in venture investment in 2025
- 5,100+ jobs supported by startups
- 150 deeptech startups representing 26% of the total ecosystem, with 29% employee growth
- €60M+ in new ALTUM-backed investment funds beginning deployment in 2026
The CEO of Startin.LV, Roberts Alhimionoks, frames it clearly: the data confirms that, regardless of external economic conditions, Latvian founders are building, scaling, and competing. For a Canadian growth-stage company, what matters is that you’re not entering an experimental market. You’re entering one with an established support infrastructure, active capital, and a government that treats startup success as a national economic priority.
The Structural Case for Latvia: What Growth-Stage Founders Actually Care About
Full EU Market Access from Day One
Latvia is a fully-fledged Member State of the European Union and Eurozone member. That means one entity, one compliance framework, and free movement of goods, services, capital, and talent across all 27 member states. As attorney Ansis Spridzans from LATBAN explained in our webinar: “You benefit from the general principles of European law – free movement of goods, services, people, and capital. If you’re here, you can also operate in Germany, France, and other larger markets.”
For Fintech and other regulated industries, this includes EU passporting; the ability to obtain a license in Latvia and operate across member states without re-licensing in each country. Latvia has earned recognition as one of Europe’s best Fintech legislative environments, making it particularly compelling for Canadian Fintech companies looking for their EU regulatory home.
The Tax Structure That Changes Your Reinvestment Math
Latvia has the #2 corporate tax rate in OECD countries for reinvested profits: 0%.
If your company retains earnings and reinvests them into growth, including R&D, hiring, and market expansion. You’re only taxed when you distribute dividends. For a growth-stage company reinvesting aggressively, this is a compounding structural advantage that Ilze Lacgalve, LIAA’s Canadian representative, says is consistently the detail that stops Canadian founders mid-conversation.
Capital Efficiency That Extends Your Runway
The cost comparison between Latvia and Western European markets is significant, not marginal. Office space in Riga runs at a fraction of the cost of London, Amsterdam, or Paris. Average gross salaries for startup employees in 2025 were €2,820/month, competitive for attracting strong EU technical talent, while dramatically lower than equivalent roles in Western markets.
For a growth-stage company with 18–36 months of runway, this differential doesn’t just save money. It determines how many bets you can make.
A Government That Is Economically Invested in Your Success
Latvia’s startup ecosystem contributed €110M+ in taxes in 2025. The government is not running startup support programs as PR; it is managing them as economic policy. The LIAA has been ranked the #1 investment promotion agency in Central and Eastern Europe, and its programs are built for companies that need real operational support, not just introductions.
Ilze Lacgalve described their approach: “We offer tailored support to investors… helping with understanding the environment, how to set up, who the partners are. We are connected to essentially everyone on the business side, and we work closely with the government to address challenges as they come up.”
The Sectors With the
Strongest Ecosystem Fit
Fintech
Latvia has positioned itself as one of Europe’s most Fintech-forward jurisdictions, combining strong regulatory frameworks with EU-wide operational capability. The Fintech Latvia Association is an active part of the ecosystem, and the country’s high digitalization rate of 90%, far above the EU average, means the infrastructure for financial technology companies is already mature.
For Canadian Fintech companies, Latvia offers the ability to license in a cost-efficient EU environment and then passport services across member states. The combination of 0% tax on reinvested profits and EU passporting makes this sector particularly well-suited to a Latvia-first entry.
Defence Tech and Dual-Use Technology
This is where Latvia’s geopolitical reality becomes a genuine business advantage, and where Canadian founders have an unusually warm reception.
Canada has over 2,000 soldiers based in Latvia under NATO’s multinational brigade, with that mandate renewed through 2029. As Nicolas Lepage, Regional Senior Trade Commissioner for the Baltics, noted: “We have extremely good relationships with the government and very close relationships with a number of institutions. We can leverage that presence to go beyond military ties and develop the Canada-Latvia commercial relationship.”
In 2025, Latvia hosted its first-ever Drone Summit, drawing 1,500+ political leaders, military experts, and industry representatives from 20 countries. The first Latvian Dual Use Export Forum followed in November. The Ministry of Defence signed R&D contracts with four Latvian companies for counter-drone technology development. Deeptech, including defence and AI applications, now makes up 26% of Latvia’s entire startup ecosystem, with that segment generating €149M in turnover.
For Canadian defence tech and dual-use technology companies, Latvia isn’t just a soft landing. It’s a market where your sector is a national priority, your home country has deep institutional relationships, and the customer pipeline includes defence ministries, NATO procurement, and an active local innovation ecosystem.
Cleantech and Energy Innovation
The EU Green Deal has created a sustained capital tailwind toward renewable energy, climate technology, and energy efficiency infrastructure. Latvia’s growing deeptech ecosystem, with Advanced Manufacturing & Industry and CleanTech & ClimateTech among the top three deeptech sectors by company count, positions it well as both an R&D base and a commercialization platform for cleantech founders.
Aerones, a Latvian startup that deploys AI-driven robots to service wind turbines, raised €54.1M in 2025, the largest deal in the country that year. It’s a concrete signal that climate-tech capital is taking this region seriously.
For Canadian cleantech companies, Latvia offers access to EU funding programs with 20-80% cost reimbursement for qualifying R&D activities, a deeptech community actively working on adjacent problems, and proximity to major European energy infrastructure investments.
AI and SaaS
With 19,000+ qualified IT specialists and 500+ startups nationally, Latvia has strong technical density for a country of 1.9 million people. For B2B SaaS and AI companies, this means a real talent market for engineering hiring, not just a flag-planting exercise.
The ecosystem’s embrace of AI is evident throughout the 2025 report: as journalist Anda Asere observed, “There is almost no ambitious startup that is not implementing AI in its core business.” Shipyard AI launched as a dedicated hub for AI builders, and 61 startups now combine deeptech with AI applications across sectors.
LIAA’s digitalization grant program (offering up to €300,000 for qualifying AI and digital transformation projects) is available to companies registered in Latvia. That’s a meaningful capital instrument for early EU operations.
Life Sciences and Biotech
Latvia’s life sciences sector is at an earlier stage than its tech verticals, but it’s growing with intention. The Biocatalyst Foundation launched the first biotech-focused startup incubation program in the Baltics and CEE, partnering with top regional research institutions. Riga Technical University and Riga Stradiņš University both maintain active innovation and commercialization centers.
Latvia is emerging as a notable European hub for precision medicine, combining unique genomic data, clinical excellence, and international collaboration:
- Center of Excellence for Precision Medicine in Pediatric Care (PMPC) — An advanced research and healthcare initiative transforming pediatric care through precision diagnostics and targeted therapies, based at the Children’s Clinical University Hospital in Riga with Horizon Europe WIDERA support
- Biobank & Genomic Strength — Latvia’s National Biobank holds over 47,000 samples, with large population-based studies integrating genomics, biomarkers, and longitudinal clinical data, and 2.3% unique genetic variants identified in the Latvian genome study
- International Precision Medicine Collaboration (PMNET) — The major precision medicine networking platform in Northern Europe, connecting 50+ speakers and 20+ countries across scientists, clinicians, industry, and policymakers
Key R&D institutions available for partnership and collaboration include the Latvian Biomedical Research and Study Centre, Latvian Institute of Organic Synthesis, Riga Stradiņš University, University of Latvia, and Riga Technical University.
For Canadian life sciences companies seeking EU regulatory positioning, clinical collaboration networks, or access to EU research funding frameworks, Latvia’s emerging biotech infrastructure, combined with the cost efficiency of operating there, makes it worth evaluating as a base for EU regulatory affairs and early-stage EU clinical partnerships.
What You Need to Know Before You Move
The Investment Environment Is Disciplined, Not Slow
Latvian angels and VCs are not going to fund your pitch deck. Ģirts Līcis was candid about this: “People, VC funds, and angels here are not as spontaneous as in Silicon Valley where you can get funding from an idea on a napkin. We want to see that you have skin in the game — feedback from clients, preferably paying customers or pilot contracts, proof of concept.”
Seed rounds in Latvia typically run €300K to €800K, occasionally up to €2M for high-performing companies. Those numbers may sound modest by Toronto or New York standards, but set against Latvian operating costs, they go significantly further. For growth-stage Canadian companies coming in with revenue traction and an established team, you’re likely overqualified for seed, and the €60M+ in newly deployed ALTUM-backed funds is specifically targeting companies ready to scale.
What investors want to see: paying customers or contracted pilots, a clean cap table (messy cap tables were cited as one of the top failure reasons for foreign companies entering the market), a strong technical team, and a clear EU market thesis.
GDPR Is Not Optional, But It’s Not as Scary as It Sounds
The attorney in our webinar put it plainly: “GDPR is not as bad as it may feel. The core principle is that if you use data from private individuals, you need to know why you’re asking for it and how you’re using it. If all procedures are in place, it is not that hard to be compliant.”
For Canadian SaaS, AI, and Fintech companies, GDPR compliance needs to be built into your product architecture before you go to market in Europe, not retrofitted after. The good news is that building GDPR compliance from the ground up is increasingly a customer-facing advantage in European enterprise sales.
Banking Requires Preparation
EU banks conduct rigorous KYC and beneficial ownership reviews. Expect to provide detailed shareholder disclosure, documentation on transaction flows, and a clear corporate structure. As Ansis Spridzans noted: “Banks have a somewhat supervisory role. You should expect quite a lot of questions when opening a bank account.” Coming in with a clean corporate structure and organized documentation will significantly accelerate this process.
Digital Signatures Work Differently Here
One practical detail that catches many North American founders off guard: DocuSign-style signatures are not universally accepted in Latvia and across the EU for formal filings, banking communications, and public sector interaction. Latvia uses a qualified electronic signature system that is the legal equivalent of a handwritten signature. Getting set up with one early makes everything faster.
Incorporation Is Fast and Foreigner-Friendly
A limited liability company (the most common startup structure) requires a minimum registered capital of €2,800 and can be incorporated in as little as three days. There are no restrictions on foreigners serving as directors or shareholders. You can be a Canadian citizen, run a Latvian company, and be fully compliant. No local nominees required.
The Support Infrastructure:
What's Actually Available to You
For companies registered in Latvia, the following programs are actively available:
LIAA Programs:
- Startup Law — Reduced payroll tax (flat social tax and 0% individual income tax) for eligible startups, plus talent co-financing covering 45% of costs for highly qualified employees
- Innovation Vouchers — Up to €25,000 (85% intensity) for R&D, industrial design, and prototype development
- Digitalization Grants — Up to €300,000 for AI integration and digital advancement projects
- Export Support — Co-financing for international trade missions, exhibitions, and market development activities
- Business Incubation — For companies under 5 years old, including grants, mentoring, and workspace
- Startup Visa — Three-year (extendable) EU residency for non-EU founders building innovation-driven companies
City of Riga Programs:
- Startup House co-working facilities with co-financing available
- A “test the market” program where founders can spend a week in Riga with arranged meetings, supported by the City of Riga and LIAA — a genuinely useful way to evaluate fit before committing
Capital Programs:
- Three new ALTUM-backed funds (BADideas Fund, Outlast Fund, Buildit) are deploying €60M+ over the next four years into seed-stage, export-oriented startups operating in Latvia. Government support programs typically reimburse 50–80% of expenses, but require upfront capital, a reason why growth-stage companies with existing runway are better positioned to take advantage than bootstrapped early-stage teams.
The Canada Advantage: Why Latvia Specifically Welcomes You
Latvia was the first country to ratify CETA, the Canada-EU free trade agreement that eliminates 98% of tariffs. Canada recognized Latvia’s independence early and has maintained a deep bilateral relationship across political, diplomatic, military, and trade dimensions for decades.
The Canadian Trade Commissioner Service maintains active offices in Riga, Vilnius, and Tallinn, focused on four sectors: defence and security, energy, cleantech, and digital innovation (AI, cyber, telecom). Nicolas Lepage and his team are specifically resourced to connect Canadian companies with Latvian partners, customers, and institutions.
Key upcoming events where the Canadian Trade Commissioner will have a presence and where Canadian startups can get warm introductions:
- TechChill (Riga, March) — Latvia’s flagship startup event, with a session focused on AI and quantum for the defence sector
- Latitude 59 (Tallinn) — Nordic-Baltic tech conference with a Canadian presence
- European Business Angel Network annual event (Vilnius) — Access to pan-European angel investment networks
- Baltic Fintech Days (Riga) — A premier fintech conference connecting Baltic and international financial technology innovators, investors, and industry leaders
- Deep Tech Atelier (Riga) — A curated gathering focused on deep tech innovation, bringing together founders, researchers, and investors to advance breakthrough technologies
- Windworks.lv (Riga) — A wind energy and cleantech initiative connecting Latvian and international stakeholders in the renewable energy sector
A Practical Expansion Framework for Growth-Stage Canadian Founders
Phase 1: Validate Before You Commit
Reach out to Nicolas Lepage at the Canadian Trade Commissioner Service in Riga and Ilze Lacgalve at Latvia’s Investment and Development Agency Representative Office in Canada. Both are specifically resourced to help Canadian companies assess whether Latvia is the right fit. Take advantage of the City of Riga’s “week in Latvia” program to get on-the-ground meetings arranged before making incorporation decisions.
Phase 2: Incorporate and Set Up Banking
Establish a limited liability company (minimum €2,800 capital, three-day incorporation). Prioritize banking setup early; the KYC process requires documentation and takes time. Get your qualified electronic signature. Evaluate Startup Law eligibility.
Phase 3: Activate the Support Programs
Apply for relevant LIAA grants and vouchers. Engage with the new ALTUM-backed funds if your traction qualifies. Build your GDPR compliance framework. Leverage LIAA’s export support programs for trade missions into other EU markets.
Phase 4: Scale Across the EU
Use your Latvian base and EU regulatory compliance as the foundation for entering Germany, France, Scandinavia, or other target markets. For regulated industries, execute EU passporting. Begin building EU-based partnerships and public tender relationships.
The Bottom Line
Latvia is not a consolation prize on the way to Berlin or London. For growth-stage Canadian founders who have traction and are making a considered, structural decision about how to enter Europe, it is a deliberately chosen launchpad that offers things your target markets can’t: 0% corporate tax on reinvested profits, dramatically lower operating costs, a government that has made startup success a national priority, a Canada-specific bilateral relationship with institutional depth, and full EU market access from day one.
The 2025 data confirms the ecosystem is working. The question is whether you’ll use it.
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TBDC works with growth-stage founders across sectors to help them access global markets. If you’re evaluating EU expansion and want a direct introduction to the Canadian Trade Commissioner in Latvia or to the LIAA’s Canadian office, get in touch with our team.
Reach Ilze Lacgalve
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Reach Nicolas Lepage
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Trade Commissioner Services from Canada to Latvia
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