Small and medium enterprises in Latvia
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SME support in the framework of Structural Funds

Structural Funds are designed to reduce disparities in the development of regions and to promote economic and social cohesion within the EU. The European Commission co-finances regional and horizontal activities in the EU Member States through programs in the areas of agriculture, regional policy, employment and social affairs.

 

Structural Funds

 

Funding from four Structural Funds will be available for Latvia:

 

Structural Funds

Implementing measures of Structural Funds

European Regional Development Fund (ERDF)

Provides funding for the improvement of infrastructure (development of transport, telecommunication and energy network). Invests in job creating.

European Social Fund (ESF)

The fund reduces employment and assists the regions whose development is lagging behind. Funding is available for training programs and employment market activities that promote the return to employment market of unemployed and socially outcasted persons.

European Agricultural Guidance and Guarantee Fund (EAGGF)

Funding is available for the development and structural adjustment of rural areas. Helps to equalize expenditure for farmers who work at unfavourable for agriculture – mountainous or rocky – areas

 

Financial Instrument for Fisheries Guidance (FIFG)

Created in order to develop and modernize fisheries. Funding is available for maintaining fish resources, as well as promotion of fisheries or aqua household products.

 

The allocation of European Union Structural funds in Latvia will be operated on the basis of Development Plan and its Annex that are published on homepage of the Ministry of Finances www.fm.gov.lv and on the homepage of www.esfondi.lv created by the Ministry of Finances.

 

The Ministry of Finances is the lead institution for administration of EU structural funds in Latvia. First level intermediaries are branch ministries that prepare priorities of respective structural fund for Development Plan, project tender forms, define selection criteria and perform project assessment as well.

 

Second level intermediaries will announce tenders and accept project applications, they will control the implementation of projects as well. These intermediaries will implement the technical and administrative assessment of the project before subbmission to first level intermediaries. Concerning EAGGF and FIFG, second level intermediary ensures the assessment and approval of the project.

 

Second level intermediaries are Rural Support Service, State Employment Agency, Agency for Vocational Education Developoment, Central Finance and Contract Agency, but Grant schemes available for enterpreneurs will be managed by Latvian Investment and Development Agency and State Regional Development Agency.

 

 

Five priorities are defined in Development Plan:

 

Priority

Actions

Fund

2 level intermediary

Priority 1

“Promotion of territorial cohesion”

All actions included in priority

ERDF

Central Finance and Contract Agency

www.fm.gov.lv

Priority 2 “Promoting entrepreneurship and innovation”

All actions included in priority

ERDF

Latvian Investment and Development Agency

http://www.lda.gov.lv/lat/inner/strf/vap_2004_06/index.php?2149

Action 4

“Available funding for small and medium-sized enterprises”

 

State Regional Development Agency

http://www.vraa.gov.lv/

 

Priority 3

"Development of human resources and promotion of employment"

Action 1

"Promotion of entrepreneurship”

ESF www.esflatvija.lv

State Employment Agency

http://www.nvd.gov.lv/index.php?id=31

Action 2

“Development of education and further education”

ESF

www.esflatvija.lv

PIAPA

http://www.piapa.lv/esf/index.php?lang=lv

Activity 3

"The decrease of social exclusion"

ESF

www.esflatvija.lv

State Employment Agency

http://www.nvd.gov.lv/index.php?id=31

Priority 4

“Development of rural areas and fisheries”

All actions included in priority

ELVGF, ZVFI

Rural Support Service

http://www.lad.gov.lv/index.php?d=159

 

Support concerning only Priority 2 is available for entrepreneurs, which is managed through Grants Scheme by Latvian Investment and Development Agency.

 

Agricultural or fishery enterprises can receive support regarding Priority 4, which is administered by Rural Support Service.

 

Although private enterprises cannot receive support regarding Priorities 1 and 3, however, entrepreneurs will have an opportunity to participate in tenders regarding work, supply or service announced by state or self-government bodies that will be beneficiaries.

 

Beneficiaries (for example, ESF) could be non-governmental organizations involving business associations and other non-government organizations.

 

Registered enterprises that operate only at territories needed special support could apply for support from Regional Fund with projects regarding development of entrepreneurship (http://www.em.gov.lv/em/2nd/?cat=1316). Support aid could be used to cover interest rate payments all or partially if credit or leasing is for the purchase of fixed capital, as well as for long-term investments in development of individual entrepreneurs or enterprises.

 

 Examples of project proposals

 

Initiative of Community

 

For the reach of goals of EU Structural Funds, besides Structural Funds, support for SMEs is available in the framework of four Community Initiatives:

 

 

Promotes cross-border, transnational and inter-regional cooperation. Initiative is financed by ERDF.

 

Program for sustainable development of urban areas, which supports innovative strategies for regeneration in declining urban areas. The initiative is financed by ERDF.

 

International cooperation program with the aim to combat all forms of discrimination and inequalities in connection with the labour market, which supports the involvement of inhabitants of social risk in labour market. Initiative is financed from ESF.

 

Program is aimed at bringing together players from rural areas and economies in order to look for new local strategies for sustainable development. Initiative is financed by EAGGF.

Related resources:



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