Latvian business culture
Did you know about business culture in Latvia? Watch this video animation to find out some interesting facts:
Latvian business Culture is characterised by business communication, business etiquette, business meeting etiquette, internship and student placements, cost of living, work-life-balance and social media guide
A country’s business culture depends on its political situation and economic environment. Stability will attract more investors from other countries than instability.
The Republic of Latvia (Latvijas Republikas) is a relatively small country in Eastern Europe, situated on the Baltic Sea, surrounded by Estonia, Lithuania, Belarus and Russia.
The political history of Latvia has been turbulent as the country has been successively annexed by Russia and Germany from the late 18th century until the late 1980s. Latvia was under the rule of the Soviet Union when the liberalization of the USSR began, which allowed Latvia to seek independence. Full independence was recognized on August 21st, 1991 and Latvia became a member of NATO and the European Union in 2004.
The capital of Latvia is Riga, the largest city of the Baltic States, and an important financial, cultural, industrial, business and political center. Riga’s population totals about 1 million inhabitants living in an area of 307.17 km2. The next largest towns are Daugavpils (112,000), Liepãja (86,000) and Jelgava (66,000).
Latvia has a total population of around 2 million (July 2013 statistics http://www.csb.gov.lv/en). In other words, it is a small country of only about 64,589 km2, of which 1,000 km2 is water).
The age of the population in Latvia is distributed as follows: 14% are 14 years old or younger, 69.6% are between the ages of 15 to 64 and 16.4% are 65 years or older. The main ethnic groups are Latvians at 57.7%, followed by Russians at 29.6%, Belarusian 4.1%, Ukrainian 2.7%, Polish 2.5%, Lithuanian 1.4%, and others at 2%.
Latvia has a low birth rate of 9.24 per 1,000 inhabitants, while the death rate is higher at 13.66 per 1,000 inhabitants, meaning that population growth is following a negative trend.
The official language of Latvia is Latvian and most people over the age of 15 speak Russian. Much of the population also speaks English, which is often used by people in government bodies and institutions, travel agencies etc., while German and other European languages are used less frequently.
The main religions practiced in Latvia are: Lutheran (37%), Roman Catholic (33%), Russian Orthodox (17%) and others.
The currency the Lat (LVL) was replaced by the EURO on the first January 2014, Latvia became the 18th Member State to adopt the euro. Latvia is in the Eastern European Time Zone and adheres to EET (UTC +2) during the winter and EEST (UTC +3) during the summer. The country scorecard rates Latvia as BBB rating for Sovereign, Currency, Banking, Political and Economic risk.
Further information is available from:
Xenophobia: being a foreigner in Latvia
Latvians are probably closer to Germans in their behaviour, as they tend to be very reserved and do not like expressing their emotions in public. They say little and like to get straight to the point. Therefore, it is best to adopt a very direct approach when addressing business topics with them.
Latvians will certainly try not to hurt somebody’s feelings at the first meeting, but they will say what they are thinking and will expect the same from you.
As Latvians do not like long meetings, you will be expected to be well prepared for the meeting, with all the relevant information at your immediate disposal. It is important to present all the key facts and be able to answer any direct questions on the spot. If your presentation is not credible or something makes your potential business partners feel uncomfortable, they may withdraw from the meeting and cancel further negotiations.
When it comes to punctuality, Latvians are relatively tolerant. At a meeting with a foreign partner, they will try to arrive on time, but may not succeed.
Latvians express their seriousness about business through their formal approach to the way they dress and conduct meetings. Their business style follows a clearly hierarchical approach and significant business decisions are made by the top management in the organisation, which can sometimes slow down the negotiation process.
International business in Latvia
Latvian government has been trying, since its independence from Russia, to reshape and redirect the dependency of its own economy, on the Russian economy. The Russian economy meltdown of 1998 had a direct effect on the Latvian economy, so that Latvia had to introduce stringent measures, to control the economy and to set in progress, the gradual reorientation of exports towards EU countries, thus reducing Latvia’s trade dependency on Russia.
The main Export partners for Latvia are as follow: UK, Germany, Sweden, Lithuania, Estonia, Russia and Denmark. Exported commodities include wood and wood products, machinery and equipment, metal, textiles and foodstuffs.
Imports comes from, Germany, Lithuania, Russia, Estonia, Finland, Sweden, Poland and Belarus. Imported commodities include machinery and equipment, chemicals, fuels and vehicles.
The Latvian economy is dominated by three main sectors of Services, Industries and Agriculture.
The Services sector provides the biggest employment opportunity in Latvia. It employs 60 % of the labour force and contributes 69.9 % of the country’s annual GDP.
The Industrial sector is the second largest employer with 25 % of the labour force working in the sector. It generates 26 % of the country’s annual GDP; traditional industries – timber, construction, food processing and also information technology, electronics, pharmaceutical and chemical industries.
The Agricultural sector used to be the biggest employer in Latvia, but the service sector has reduced its position. However, it is still a very important sector, in that; it provides employment for 15% of the labour force and generates 4.1% of the annual GDP. Most important of all, it feeds the population. Latvia produces the following items: Grain, sugar beets, potatoes, vegetables; beef, pork, milk, egg and fish.
Latvians are well-educated, as they see education as a way of securing a good job and earning a living. Their education system consists of 9 years for primary school, 4 for secondary school, and 3 to 5 years for higher education (depending on the chosen course of study). The right to free education is guaranteed by law for primary and secondary studies. Universities are different; students who pass the higher education council exams receive grants for their education, while the others have to pay their own fees to study. There are many private higher education institutions in Latvia that provide extended diversity and choice, and compete with the state institutions.
In fact, Latvia has an extensive range of professional and academic routes to higher education at the undergraduate and postgraduate levels. It typically requires 3 to 4 years of study to receive an undergraduate degree and a further 2 years to achieve a master’s degree. As with other universities, proceding to doctoral level studies is only possible on successful completion of a master’s degree.
The Higher Education System in Latvia uses a credit point system to benchmark the amount of work a specific course requires, with an approximate allocation of one week of full time studies equivalent to one credit. This credit system is compatible with the European Credit Transfers and Accumulation Systems (ECTS), where one ECTS is equivalent to approximately 30 to 35 learning hours. Therefore, an approximate ECTS credit value can be calculated by multiplying Latvian credits by a factor of 1.5.
Typically an undergraduate degree will require 120 to 160 Latvian credit points and a postgraduate degree 80 points.
Using the ECTS system, students are able to travel within the European Union for student placements at either higher education institutions or in private business work placements.
Student placements are practical assignments, which must be eligible for a minimum of 39 ECTS credits or 26 national credit points.
Placements are normally organised by the university and students associations. For example, AIESEC, the international student body, offers four types of placement programs abroad. Latvian students have to submit several placement applications in order to secure a placement of anywhere between 3 to 18 months. For students studying in Latvia, English is a required language and it is better if they are able to speak Latvian. Foreign students are also eligible to apply for student exchange programs; so that they can take courses in Latvia.
Students who are interested in studying in Latvia have to submit their placement applications directly to the institutions that have international vacancies. The application process, including submission methods and deadlines, varies from one university to another, according to their internal policies.
Students are encouraged to apply for placements to gain experience and familiarity with foreign environments and languages, which helps promote study programs, business partnerships and cooperation opportunities between the host and originating institutions.
The body responsible for the recognition of international credentials and certifying the parity of academic qualifications in Latvia is the ‘Academic Information Centre of Latvia’. This institution will help you to verify your academic qualifications and, where necessary, recommend the equivalency exams required to meet the standards of certificates and diplomas awarded in Latvia.
Other issues such as transport infrastructure
The younger generation represents a labour force with a high mobility in Latvia and many have moved from the countryside into the big cities to look for better jobs. Since Latvia joined the EU, people also have the opportunity to travel abroad for jobs.
Mobility and transportation are relatively new issues on the government agenda for Latvia, further information is available from the following sources:
With Latvians, there are no topics of conversation that should be avoided but it is important not to criticize the people of Latvia or their country, even as a joke. When Latvians criticize their own country, government or economic situation, it is better to reassure them by saying you think things are getting better or that you are sure everything will be fine in the end.
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