The pulse of Latvian startup scene: Week #52

#StartinLatvia can apply for state support, plans expansion beyond Europe and more.

Startup support law comes into force

On January 1, 2017 Law on Support for Startup Operations came into force, the purpose of which is to foster the development of rapidly-growing technological companies or startups in Latvia, and commercialization of research and innovative ideas, products, or processes.

According to the law, a startup is a company with high growth potential, developing scalable business models and creating, producing or developing innovative products.

Under the law, startups will be able to make fixed payments with the option of receiving personal income tax and corporate tax breaks, or receive support for hiring qualified employees, also with the option of reduced corporate income tax.

Coworking space TechHub Riga co-founder Andris Bērziņš believes that the new law will improve viability of startups as it will enable them to reduce labor costs, which constitute major part of startup operation cost. Bērziņš is pleased with the criteria that startups have to meet to qualify for the support program. At the same time, Bērziņš says it is regrettable that, under the new law, business angels cannot yet have the status of qualified investors.

Mintos considering expansion in African, Asian markets

Peer-to-peer lending platform Mintos is looking at opportunities for expanding beyond Europe – at the moment the company is doing market research in Africa and Asia. "Our goal is to ensure cross-border capital flow, connecting regions short of financing with the countries where capital has been accumulated,” said Mintos head Mārtiņš Šulte.

Mintos is also actively setting up offices in several European countries to consolidate its local capacity, including in Great Britain. This is one of priorities for Mintos team in 2017. Mintos also continues work to receive permit from the British Financial Conduct Authority.

At the same time, Mintos is looking into the necessity and opportunity to attract venture investment to accelerate its global development.

Twino raises share capital to EUR 7.7 million

SIA Twino, a company providing non-banking financial services, has increased its share capital to EUR 7,707,800, according to information from the database. Before that, the company had a share capital of EUR 2,800.

Twino Group companies issue consumer loans in Latvia, Poland, Czech Republic, Russia, Georgia, Denmark, Mexico and, starting this year, also in Spain and Kazakhstan.

The company also maintains peer-to-peer lending marketplace Twino where investors can invest in consumer loans issued by Twino Group companies in Poland, Georgia, Denmark, and Russia.

Peer-to-peer lending market legislation to be drafted in 2017

New legislation regulating peer-to-peer lending marketplaces is to be drafted and submitted to the government and Saeima by October 30, 2017. This according to the Financial Sector Development Plan for 2017-2019.

By the end of 2017, legislation on peer-to-peer investment platform will be created.

There are several peer-to-peer lending platforms in Latvia at the moment, but the development of capital or investment financing platforms is also possible, points out the Finance Ministry.