Many Latvian entrepreneurs are looking into expanding their company by opening a new branch abroad or relocating to an entirely different country. A relocation can offer various economic advantages and an international presence raises a company’s image and revenue. Austria, and more specifically the Vienna Region, is a unique business location with promising economic opportunities. Latvian companies in Austria can benefit from a number of advantages – you will find some of them outlined below.
Strong business ties
After a slight decrease in trade volume in the first year of the pandemic, the exchange of goods between Austria ad Latvia grew significantly again in 2021. Latvia’s deliveries increased strongly (+23.2%) to 74.6 million euros. Austrian exports to Latvia grew to 146.9 million euros. In 2021 Latvia’s main imports from Austria were pharmaceutical products (26.6 million euros) machinery, boilers and other mechanical appliances (24.8 million euros), iron and steel goods (9.9 million euros), electrical machinery (9.7% million euros) and paper and cardboard (10 million).
In turn, Austria’s main imports were machinery, boilers and other mechanical equipment (13.2 million euros), wood and wood products (12.2 million euros), iron and steel (9.6 million euros), electrical machinery (8.4 million euros) and clothing (3.9 million euros).
Since the purchase of M 109 ( self-propelled howitzers from Austria in 2017 – 2021, relations in the defense and security sector have intensified as well.
Austria has also become an increasingly important holiday destination for Latvia. Most Lativans seek out Austria for skiing and cultural activities. 28,048 Latvians traveled to Austria in 2019, according to Statistics Austria, which is 9.2% more than in 2018. The number of overnight stays was 91,745 or 6% more than the previous year. There are very good flight connections to Austria. The national airline airBaltic, which carried 7 million passengers a year until the pandemic, also flew to Vienna 11 times a week. In winter, there were also charter connections to western Austria. With the pandemic tailing off, AirBaltic is offering direct flights to Vienna again.
Country comparisons
With 9 million inhabitants, Austria’s population is considerably bigger than that of Latvia (1,9 million inhabitants). As a small national economy, Latvia is highly dependent on the international economic climate. More so than Austria which has a larger national economy. The gross domestic product and the gross national product as well as the average income are much higher in Austria than in Latvia.
Life expectancy is a bit lower in Latvia than in Austria, where no population group is growing as strongly as the 50+ generation. Austrians over the age of 50 mostly have a stable income and a stable family situation and can now afford things for which they lacked time or money earlier in life. They want to enjoy the prosperity they have worked hard for. Creating offers specifically for this target group is a successful business strategy and the “silver market” is a market of the future.
Skilled staff
A specifically Baltic problem is the sharp population decline. Since the beginning of the millennium, 15,000 to 20,000 Latvians have left the country every year. The emigration of skilled Latvian workers to other countries has caused a shortage of well-trained personnel. As a result, wages have increased for years, putting pressure on productivity. The lack of required skilled labor is seen by local and foreign investors as Latvia’s biggest location problem.
In 2021, wages skyrocketed by 11.8%. In Austria, however, wages are much more affordable. The Vienna region is home to no less than 18 universities, 10 universities of applied sciences, and 7 teacher education colleges. Optimally motivated and excellently trained people graduate from Austria’s largest and best educational facilities. Based on Statistics Austria, the total enrolment amounts to more than 210.000 students. Among them, 29% are international students. The Vienna Region attracts people from all over the world who bring their skills and talents to the table. Latvian companies in Austria will find a much larger pool of potential employees here.
Research and development
Latvia has very good research centers. However, it lacks the necessary state support to move from the development to the production phase. To maintain Latvia’s competitiveness and reduce social disparities, the OECD and IMF advise sustainable use of extensive EU funding, support for research and innovation, and continued structural reforms, e.g., in the education and healthcare systems. In Austria, all of these factors are already implemented and running smoothly. The Vienna Region has an excellent educational system, universal health care, and a strong focus on research and development. In fact, Austria is amongst the EU leaders in this area. It spends more than 3% of its GDP on research and development. In Latvia, it is only 0,7%.
The Vienna Region has set sail for high-tech evolution. Pharma, biotech, information and communication technologies, energy, metal processing, mobility, plastics, chemicals as well as creative industries benefit from innovation and the increasing use of AI. An ever-growing number of nationally and internationally recognized research facilities design ways to increase effectiveness and productivity. Both the institutes and the necessary human resources and skills are available to advance research and development. These factors make the Vienna Region a very important business location. It has a promising future that Latvian companies in Austria can benefit from.
Location and infrastructure
Vienna, Lower Austria, and Burgenland form the Vienna Region which is situated in the very heart of Europe. A veritable pole position from where companies enjoy easy access to the growing markets in Central and Eastern Europe. Moreover, the infrastructure is excellent – extensive and reliable. There are motorways that reach in all directions, an international airport, major railway terminals for regional and international rail travel, and freight transport down the Danube. Direct connections to major European capitals facilitate trade and interaction. Moreover, the geopolitical situation in this region is quite stable. It is less directly affected by the consequences of the Ukraine war.
Grants and subsidies
The Vienna Region is a hub for start-ups and company foundation. Entrepreneurship is valued highly and there are a lot of government grants and subsidies. For Latvian companies in Austria, an extensive system of public funding and early-stage investments is available. Each of the three states – Vienna, Lower Austria and Burgenland – has business agencies that assist entrepreneurs in setting up their companies. They provide information on jump-start programs, business grants, and accelerators.
More and more international companies are discovering the Vienna Region and its many advantages for their business development. A high quality of life, personal safety, low crime rates, excellent health care, clean air and water, childcare benefits, and a great schooling system await expats.
The Vienna Region is clearly a prime choice when considering a new location for a company or an additional production facility. Latvian companies in Austria will enjoy many benefits and advantages – especially in the Vienna Region.
If you’re looking for business premises, production sites, laboratories, and office space in Vienna, the Vienna Business agency will offer you all the information you need. There is help regarding funding for companies from any industry and of any size. The website offers a detailed overview of investment funds and investor networks based in Vienna. The list of business grants is quite long and each of them has a different thematic focus.
Ecoplus, the Business Agency of Lower Austria, is a reliable partner of entrepreneurs as well as investors and initiators of regional and international projects. The agency acts as an essential interface between business, politics, and science. Business grants include regional funding, investments by municipalities, companies, associations and initiatives as well as by individuals.
Burgenland’s Business Agency offers financial support and 1-to-1 coaching as well as various workshops to entrepreneurs. The program includes consulting, expert advice, and office infrastructure. Specialized programs accompany start-ups and companies that relocate to Burgenland along their entire settlement and set-up process. The agency is your reliable partner for all business endeavors in Burgenland. You can find an overview of all current subsidies and a step-by-step guide to the funding process on their website.
Let me give you five reasons why you should set up your headquarters in the Vienna Region:
- it is part of the richest countries in the European Union
- a high quality of life at affordable prices
- Excellent, highly-developed infrastructure
- highly qualified workforce
- outstanding spending capacity of customers
- home to many international companies, universities as well as research facilities
- direct access to South East and Eastern Europe
- high level of personal security, political stability and legal certainty
- an international as well as cosmopolitan region due to a population with migration background
What a founder-friendly location needs is a focus on the global market. Austria’s location in particular makes it an ideal hub for the international start-up scene in Central and Eastern Europe.
