Latvian transit
Latvian Government currently works on improvement of the national legislation in order to bring it into compliance with the requirements of international transit transportation. Considering Latvia’s favorable transit location, the unification with European legislation will make it possible for Latvia to be a gateway between Europe, Russia and Asia. As of today, only part of cargo going via the ports of Estonia, LatviaLithuania go to the above countries. The majority of cargo transits the states to Russia. According to statistics of the RF Ministry of Transport, in 2006, the ports of these Baltic states handled some 140 million tonnes of cargo, a half of which was transported to Russia. and
Favorable location
Transit is considered by Latvian Government as the most significant sector of its national economy. Transit accounts for some 75% of cargo including all oil products and crude oil transported by railway. According to announcement made at international conference “Metallurgical Cargoes Transportation” held in Moscow, over 8% of Latvian residents work in the sphere of transit transportation, while the share of transport, transit and warehousing services makes 9-10% of GDP.
The territory of Latvia is crossed by strategically important transport lines linking large economic regions like USA, Europe, Russia and Far East. The advantages of this historically favorable location became even more evident after Latvia entered EU. Latvian ports are integrated into the European transport system and handle cargoes going from the Far East, Asian and CIS to Western Europe and other continents. Besides, operation of Latvia’s largest ports – Ventspils, Riga, Liepaja – is regulated by the legislation of FEZ. As of today, free ports and FEZ have a 80-100-percent discount for a real estate tax and income tax from enterprises while goods and service produced within FEZ are subject to a zero VAT. According to the data announced at the conference, when investing EUR 10 million into a free port of Latvia, it is possible to save EUR 112,000 per year on taxes.
Transit routes
The advantages of Latvia relate mainly to the possibility to save on costs. According to EU Rules ( 2913/92 and 2454/93) and Latvian Law on VAT (article 33), any importer may save money through lower customs charges when transporting cargo via Latvian ports. Owing to unification of Latvian and EU legislation, cargo clearance in Latvian ports require minimal formalities.
In particular, when transporting cargo via Latvia to EU, any importer has a possibility to pay only customs duty while VAT is paid by a final receiver.
When exporting cargo from EU to Russia or CIS via Latvia the same Rules (article 793) and the Law (articles 3 and 18) enable a shipper to complete the procedure started in any EU country without VAT.
One more transit route links the ports of the Baltic states with Central Asia (Kazakhstan, Uzbekistan, KirgiziaTurkmenistan) by a regular container train. In 2003, it transported 1115 thou TEU, in 2006 - 10147 thou TEU. The Government of Latvia currently works on development of this route. In the nearest future the route is to be extended to China.
According to materials of international conference “Metallurgical Cargoes Transportation”. and