<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Social enterprises have positive effect on sustainable development, and they have become an important instrument for solving social problems (especially in rural areas), as the national and local governments alone cannot solve all such problems. To foster the development of social entrepreneurship, Latvia has introduced several support instruments for social enterprises, which include tax relief, privileged procurement contracts, grants, as well as non-monetary kinds of support. However, social entrepreneurs often point out that support from the national and local governments is insufficient, while the support instruments stipulated in the Social Enterprise Law are not widely used. Therefore, the aim of the research is to analyse national and local government support instruments for social enterprises in Latvia. The research found that the most important financial instrument fostering the development of social entrepreneurship in Latvia is a grant scheme administered by the Ministry of Welfare and the JSC Development Finance Institution Altum, which is available in the range of EUR 5000 to 200000 for investment and working capital. In the period 2017-2020, 94 social entrepreneurship projects with a total budget of EUR 6 million were supported, which could be viewed as significant financial support. In contrast, immovable property tax relief, exemption from enterprise income tax (on profits) and relief from this tax for several categories of non-business expenses are considered by social entrepreneurs to be an insignificant kind of support. There is also lack of experience and practice regarding the inclusion of social criteria in public procurement in Latvia.</p>
</abstract>

Social enterprises have positive effect on sustainable development, and they have become an important instrument for solving social problems (especially in rural areas), as the national and local governments alone cannot solve all such problems. To foster the development of social entrepreneurship, Latvia has introduced several support instruments for social enterprises, which include tax relief, privileged procurement contracts, grants, as well as non-monetary kinds of support. However, social entrepreneurs often point out that support from the national and local governments is insufficient, while the support instruments stipulated in the Social Enterprise Law are not widely used. Therefore, the aim of the research is to analyse national and local government support instruments for social enterprises in Latvia. The research found that the most important financial instrument fostering the development of social entrepreneurship in Latvia is a grant scheme administered by the Ministry of Welfare and the JSC Development Finance Institution Altum, which is available in the range of EUR 5000 to 200000 for investment and working capital. In the period 2017-2020, 94 social entrepreneurship projects with a total budget of EUR 6 million were supported, which could be viewed as significant financial support. In contrast, immovable property tax relief, exemption from enterprise income tax (on profits) and relief from this tax for several categories of non-business expenses are considered by social entrepreneurs to be an insignificant kind of support. There is also lack of experience and practice regarding the inclusion of social criteria in public procurement in Latvia.

Analysis of Financial Support Instruments for Social Enterprises in Latvia

Latvia University of Life Sciences and Technologies

Rural Sustainability Research

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Analysis of Financial Support Instruments for Social Enterprises in Latvia"}

Social enterprises have positive effect on sustainable development, and they have become an important instrument for solving social problems (especially in...

Analysis of Financial Support Instruments for Social Enterprises in Latvia

Published Online: Aug 11, 2021

Page range: 76 - 84

Received: Feb 18, 2021

Accepted: Apr 30, 2021

DOI: https://doi.org/10.2478/plua-2021-0009

Keywords
social enterprise, social entrepreneurship, support instruments for social enterprises

© 2021 Lasma Licite-Kurbe et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Analysis of Financial Support Instruments for Social Enterprises in Latvia

Published Online: Aug 11, 2021

Page range: 76 - 84

Received: Feb 18, 2021

Accepted: Apr 30, 2021

DOI: https://doi.org/10.2478/plua-2021-0009

Keywordssocial enterprise, social entrepreneurship, support instruments for social enterprises

© 2021 Lasma Licite-Kurbe et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
social enterprise, social entrepreneurship, support instruments for social enterprises