Latvia - Market ChallengesLatvia - Market Challenges
Due to the country's small size, if a company is considering doing business only in Latvia, one potential limiting factor is local labeling requirements, which could prove costly relative to the possible customer base. Many companies focus on Latvia as part of the broader Baltic region or EU market. Other challenges that businesses face in Latvia are the potential for market saturation and the difficulty of protecting business secrets due to the small market size.
American products in Latvia face strong competition from EU countries, Russia, and the formerly Soviet-occupied states. Due to historical trade relations, companies from Scandinavian countries and Germany typically approach the Latvian market with greater confidence. Entrenched government bureaucracy, relatively higher levels of corruption (see Chapter 6), and challenges in maintaining correspondent banking relationships in U.S. dollars are potential impediments to the growth of U.S. trade and investment in Latvia.