Text consolidated by Valsts valodas centrs (State Language Centre) with amending regulations of: 25 June 2025 [shall come into force on 28 June 2025]. If a whole or part of a paragraph has been amended, the date of the amending regulation appears in square brackets at the end of the paragraph. If a whole paragraph or sub-paragraph has been deleted, the date of the deletion appears in square brackets beside the deleted paragraph or sub-paragraph.

Republic of Latvia Cabinet Regulation No. 24 Adopted 7 January 2025

Regulations Regarding Productivity Loans for Innovations in Undertakings

Issued pursuant to Section 19, Clause 14 of the Law
on Management of European Union Funds for the
2021-2027 Programming Period and Section 12,
Paragraph four of the Law on Development Finance Institution

I. General Provisions

1. The Regulation prescribes:

1.1. the procedures by which Activity 1.2.1.2 "Productivity Loans for Innovations in Undertakings" of Specific Aid Objective 1.2.1 "Strengthening Research and Innovation Capacity and the Introduction of Progressive Technologies for Undertakings" of the European Union's Cohesion Policy Programme for 2021-2027 (hereinafter - the Activity) shall be implemented;

1.2. the objective of the Activity;

1.3. the funding available for the Activity;

1.4. the conditions for granting the aid;

1.5. the conditions for the aided activities and for the eligibility of costs;

1.6. accounting of the aid, the sectors and activities not to be aided.

[25 June 2025]

2. The following terms are used in the Regulation:

2.1. opinion - a document prepared by the Latvian Council of Science (if an innovative product is planned to be developed) or by the Ministry of Defence (if a dual-use innovative product is planned to be developed), certifying that the product specified in the project application qualifies as an innovative product or a dual-use innovative product;

2.2. project - a set of activities in respect of which the final beneficiary applies for aid, submitting a project application to akciju sabiedrība "Attīstības finanšu institūcija Altum" [joint-stock company Development Finance Institution Altum] (hereinafter - the company Altum);

2.3. capital rebate - partial reduction of the principal amount of the loan by the company Altum or the parallel loan by the company Altum;

2.4. another funding provider - a credit institution, its branch or subsidiary, a leasing company or an investment fund which is entitled to provide financial services in the Republic of Latvia, or an international financial institution;

2.5. start of works - in accordance with Article 2(23) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (hereinafter - Commission Regulation No 651/2014), start of construction work related to an investment or first legally binding commitment to order equipment or other commitments which make the investment irreversible - whatever occurs first. Buying land and preparatory works such as receiving permits and conducting feasibility studies are not considered start of works;

2.6. single undertaking - when granting the aid in accordance with Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (hereinafter - Commission Regulation 2023/2831), it shall apply to the merchant and include all merchants linked thereto between which there exists at least one of the relationships referred to in Article 2(2) of Commission Regulation 2023/2831;

2.7. areas of the smart specialisation strategy (RIS3) - national-level research and innovation strategies which formulate directions for the transformation of the national economy and are aimed at incentives that support the stimulation of the creation of higher value added services and products, the increase of productivity, the transfer of knowledge, and the introduction of the thinking of more efficient use of resources in all business cycles, and which are divided into the following areas:

2.7.1. knowledge-intensive bioeconomy;

2.7.2. biomedicine, medical technologies, pharmacy;

2.7.3. photonics and smart materials;

2.7.4. smart power industry and mobility;

2.7.5. information and communication technologies;

2.8. innovative product - a new or significantly improved product at the level of the final beneficiary. Significant improvements shall constitute, for example, addition of new functions, improvement of functional properties and use, including improvement of quality, financial accessibility, usability, and convenience, more economical use, increase in durability, extension of the duration of use of the product. All functions or operational specifications of the product need not be significantly improved;

2.9. research and development - a creative effort taken systematically and purposefully by using scientific methods in order to increase the scope of knowledge and to use this knowledge for the creation of new developments and technologies;

2.10. research and development activities - a creative effort related to technological development, prototyping, and technology transfer, that is taken systematically in order to increase the scope of knowledge, including knowledge about a human being, culture, and society, and to use this knowledge for the creation of new developments. The research and development process may include an element of innovation and resolution of a scientific or technological uncertainty;

2.11. final beneficiary - a merchant registered in the Commercial Register of the Republic of Latvia that meets the following conditions:

2.11.1. it is a micro merchant which meets the criteria specified in Article 2(3) of Annex I to Commission Regulation No 651/2014, a small merchant which meets the criteria specified in Article 2(2) of Annex I to Commission Regulation No 651/2014, a medium-sized merchant which meets the criteria specified in Article 2(1) of Annex I to Commission Regulation No 651/2014, or a small mid-cap merchant or mid-cap merchants which conforms to Article 2(6) and (7) of Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 -the European Fund for Strategic Investments;

2.11.2. according to the information available publicly in the database of tax (fee) debtors administered by the State Revenue Service, it does not have any debt of taxes or fees, including debt of the mandatory State social insurance contributions, which exceeds EUR 150 in total, except for tax payments for which the payment term has been extended, divided in instalments, deferred, or re-divided in instalments in accordance with Section 24, Paragraphs one, 1.³, and 1.⁷ of the law On Taxes and Fees;

2.11.3. if it applies for aid in accordance with Commission Regulation No 651/2014, it shall not be considered an undertaking in difficulty in accordance with Article 2(18) of Commission Regulation No 651/2014 (assessing liabilities at the level of the group) and has submitted a declaration that no insolvency proceedings of the project applicant have been declared against it, no case of legal protection proceedings has been initiated, no legal protection proceedings are being implemented, the economic activity of the project applicant has not been suspended or terminated, or the project applicant is not being liquidated;

2.11.4. it takes into account the restrictions on project sectors and activities not to be aided as referred to in Chapter VI of this Regulation;

2.11.5. if it applies for aid in accordance with Commission Regulation No 651/2014, an outstanding recovery order following a previous Commission decision, by which aid granted by the same Member State was declared unlawful and incompatible with the internal market, in accordance with Article 1(4)(a) and (b) of Commission Regulation No 651/2014, shall not apply thereto (assessing liabilities at the level of the group);

2.11.6. it agrees that the information obtained thereon in accordance with Paragraphs 57 and 58 of this Regulation is used for analytical purposes;

2.11.7. it does not cooperate with the Russian Federation or the Republic of Belarus;

2.12. [25 June 2025];

2.13. productivity - an increase in the remunerations of the final beneficiary.

[25 June 2025]

3. Within the meaning of this Regulation, the following shall not be considered an innovative product:

3.1. discontinuation of the use of any part of the process;

3.2. replacement of the capital (acquisition of modules identical to the modules used, extensions not causing improvements to the specification, hardware and software updates);

3.3. further sale of goods or processes of other manufacturers;

3.4. aesthetical variations, flavour and olfactory variations, and other improvements for the purpose of marketing which do not change the functions, use, or technical properties of the product;

3.5. variations caused by changes in the price of components.

[25 June 2025]

4. The purpose of the Activity is to ensure the availability of the funding for the development of final beneficiaries in Latvia by providing aid for the development of innovative (including dual-use) products, stimulating private sector investments in research, development, and innovation, including support for the construction of new buildings (also production buildings), the purchase of equipment, and the establishment of production connections, and also the creation of new jobs in the areas of the Smart Specialisation Strategy (RIS3).

[25 June 2025]

5. The total available and planned funding from the European Regional Development Fund and the State budget funding for the Activity, and the indicators to be achieved within the scope of the Activity by 31 December 2029, shall be determined in accordance with the legal act laying down the procedures for implementing the financial instruments to be used within the scope of the European Union's Cohesion Policy Programme for 2021-2027, the available funding, the aided activities, and the eligible costs.

[25 June 2025]

6. [25 June 2025]

7. [25 June 2025]

8. In order to ensure funding for granting a loan, a loan with a capital rebate, or a parallel loan with a capital rebate by the company Altum (in its part which exceeds the available amount of the capital rebate), the company Altum may attract a State loan in the form of a credit facility or attract funding on the market (including by borrowing funding from international financial institutions) up to a maximum of EUR 65 000 000. The repayment term of the State loan shall be by 31 December 2049. The capital rebate shall be covered from the public funding allocated to the Activity. The risk rate shall not be applied to the State loan and it shall be ensured by a commercial pledge, upon the company Altum pledging the right to claim and their next components as the aggregation of property which will arise from the loans issued by the company Altum.

[25 June 2025]

9. The company Altum shall issue loans, loans with a capital rebate, and parallel loans with a capital rebate by entering into a civil contract with the final beneficiary and, if applicable, another funding provider (hereinafter - the loan contract). If the loan contract is not implemented according to the conditions included therein, the company Altum has the right to terminate it unilaterally and to recover the funding disbursed inappropriately.

10. The company Altum shall fund only those activities which it has recognised as economically viable. The company Altum shall assess the sustainability of the investment project of the merchant, the co-funding necessary for the implementation of the project, the sufficiency of security, the present and future financial standing of the merchant, the conformity of the knowledge and experience thereof for successful implementation of the activities provided for in the project, and also analyse the identified entrepreneurial risks and other factors to determine the loan quality of the merchant.

11. The aid shall be provided for the implementation of projects in the territory of the Republic of Latvia. Aided projects must be linked with the objective of the Activity referred to in Paragraph 4 of this Regulation in one of the RIS3 fields specified in Sub-paragraph 2.7 of this Regulation.

II. Conditions for Granting Aid for Development of Innovative Products

[25 June 2025]

12. The aid for the development of innovative products in the amount of EUR 300 000-5 000 000 shall be provided in the form of a combined financial instrument as:

12.1. a loan by the company Altum with a capital rebate if another funding provider is not involved in the funding of the project;

12.2. a parallel loan by the company Altum with a capital rebate if the project is co-funded together with one or several other funding providers in compliance with the following conditions:

12.2.1. the parallel loan is subordinated in the structure to a loan provided by another funding provider and has been reinforced with a lower security layer than the credit provided by another funding provider;

12.2.2. the amount of the credit or financial leasing provided by other funding providers is not less than the amount of the parallel loan issued by the company Altum in accordance with this Regulation;

12.2.3. the interest rate of the parallel loan shall be equal to the interest rate of another funding provider. If the Euro Interbank Offered Rate is negative at the time of fixing, reviewing, or amending the variable rate, a zero value shall be applied to the Euro Interbank Offered Rate. The company Altum may apply a higher rate of the fixed part of the annual interest rate than the rate of the fixed part of the annual interest rate added to the loan of another funding provider or financial leasing in order to conform to the maximum permissible aid intensity specified in Paragraphs 27 and 28 of this Regulation if the aid is granted as regional aid in accordance with Article 14 of Commission Regulation No 651/2014 or the amount referred to in Sub-paragraph 30.4 of this Regulation if the aid is granted as the de minimis aid in accordance with Commission Regulation No 2023/2831.

[25 June 2025]

13. Aid shall be provided to final beneficiaries whose projects, in accordance with the conditions referred to in Sub-paragraph 2.8 of this Regulation, are intended for the development of innovative products or for the development of dual-use innovative products in the fields of security and defence.

[25 June 2025]

14. The company Altum shall prepare and publish on its website www.altum.lv the notification on the commencement of submission of project applications. During the first 40 working days from the day on which the submission of project applications is commenced, the company Altum shall only accept such project applications that envisage the development of dual-use innovative products in the fields of security and defence. After 40 working days, the company Altum shall also accept other project applications.

[25 June 2025]

15. [25 June 2025]

16. In order to ensure the evaluation of an innovative product and a dual-use innovative product, the Latvian Council of Science and the Ministry of Defence shall use the methodology for the evaluation of innovative products and dual-use innovative products which has been developed by the Ministry of Economics in cooperation with the Latvian Council of Science and the Ministry of Defence.

[25 June 2025]

17. When submitting a project application to the company Altum for the receipt of aid for the development of a dual-use innovative product in the fields of security and defence, the final beneficiary shall also submit an opinion of the Ministry of Defence on the conformity of the applied product to a dual-use innovative product in the fields of security and defence. In order to ensure the conformity of the granted aid with this Regulation, the company Altum has the right to transfer data on the final beneficiary and the project to the Ministry of Defence, whereas the Ministry of Defence has the right to transfer data on the final beneficiary and the project to the company Altum.

[25 June 2025]

18. The Ministry of Defence shall, within 20 working days after receipt of the submission of the final beneficiary, issue the opinion referred to in Paragraph 17 of this Regulation. The Ministry of Defence may extend the deadline for issuing the opinion by 10 working days.

[25 June 2025]

19. When submitting a project application to the company Altum for the receipt of aid for the development of an innovative product, the final beneficiary shall also submit an opinion of the Latvian Council of Science on the conformity of the applied product with an innovative product. In order to ensure the conformity of the granted aid with this Regulation, the company Altum has the right to transfer data on the merchant and the project to the Latvian Council of Science, whereas the Latvian Council of Science has the right to transfer data on the merchant and the project to the company Altum.

[25 June 2025]

20. The Latvian Council of Science shall, within 30 working days after receipt of the submission of the final beneficiary, issue the opinion referred to in Paragraph 19 of this Regulation.

[25 June 2025]

20.¹ In order to ensure the provision of the opinion and the conformity of the granted aid with this Regulation, the Ministry of Defence, the Latvian Council of Science, the company Altum, and the Ministry of Economics shall enter into an agreement.

[25 June 2025]

21. Aid for the development of innovative products shall primarily be provided as regional aid in accordance with Article 14 of Commission Regulation No 651/2014.

22. The eligible costs of the aid referred to in Paragraph 21 of this Regulation for all types of initial investments of final beneficiaries shall be the following:

22.1. the costs for the investment in tangible assets in accordance with Article 2(29) of Commission Regulation No 651/2014 and intangible assets in accordance with Article 2(30) of Commission Regulation No 651/2014;

22.2. estimated remuneration costs arising from the new jobs created as a result of the initial investment that have been set up as a result of the implementation of the project, calculated over a two-year period, and necessary for work with the new equipment or production line.

23. If the aid is provided in accordance with Paragraph 21 of this Regulation, the following conditions shall be met:

23.1. the eligible costs of the project shall be the initial investments in accordance with Article 2(49)(a) of Commission Regulation No 651/2014;

23.2. the assets (including buildings and structures) shall be new;

23.3. the costs related to lease of tangible assets shall be eligible if the conditions referred to in Article 14(5) and (6) of Commission Regulation No 651/2014 are met and, in the case of land, buildings and plant, the rights related to the lease and development have been corroborated in the Land Register (if applicable) and the lease and building rights must continue after the expected date of completion of the investment project for at least five years for small mid-cap merchants and mid-cap merchants or three years for medium-sized merchants, and shall remain valid during the entire term of validity of the loan contract;

23.4. the initial investments in construction or acquisition of immovable property shall be eligible only for a complex investment project which also involves the acquisition of equipment in conformity with the eligible investment cost ratio of up to 40 per cent for construction and acquisition of immovable property;

23.5. intangible assets shall conform to the conditions referred to in Article 14(8) of Commission Regulation No 651/2014. For small mid-cap final beneficiaries or mid-cap final beneficiaries, intangible assets may be financed in the amount of up to 50 per cent of the total eligible costs of initial investments. For micro, small, or medium-sized merchants, intangible assets may be financed in the amount of up to 100 per cent of the total eligible costs of initial investments.

[25 June 2025]

24. After completion of the project, initial investments shall remain in Latvia in the relevant level 3 region of the Nomenclature of Territorial Units for Statistics (hereinafter - the NUTS) of the aid intensity (according to the data of 2021) where the project to be aided is being implemented, or shall remain in Latvia in any region for at least three years (for micro, small, or medium-sized merchants) or for at least five years (for small mid-cap merchants or mid-cap merchants) in accordance with the conditions of Article 14(5) of Commission Regulation No 651/2014, if the aid is granted in accordance with Sub-paragraph 27.2 of this Regulation.

[25 June 2025]

25. If the eligible costs are calculated based on the estimated costs of the newly created jobs in accordance with Sub-paragraph 22.2 of this Regulation, all of the following conditions shall be met:

25.1. the investment project at the relevant place of business shall generate a net increase in the number of employees in comparison with the average indicator in the previous 12 months, which means that all lost jobs shall be subtracted from the total number of jobs created during the relevant period;

25.2. each created position shall be filled within three years after implementation of the investment project;

25.3. each job created as a result of the investment shall be maintained in the relevant territorial unit (city, municipality, or region) for at least three years from the day when the relevant position is first filled.

26. Any initial investment which is related to the same or similar activity in accordance with the definition specified in Article 2(50) of Commission Regulation No 651/2014 and which has been started by the same beneficiary (at the group level) within three years from the day of starting works on another aided investment in the same level 3 region of the NUTS (according to the data of 2021) shall be considered part of a single investment project. In accordance with Article 2(52) of Commission Regulation No 651/2014 (regardless of the size of the final beneficiary), the aid shall be granted to a single investment project which is a large investment project and a large investment project which is not the single investment project in conformity with the following conditions:

26.1. in Rīga:

26.1.1. for a project of up to EUR 55 million, 30 per cent of the amount of eligible costs shall be applied;

26.1.2. for the part of a project from EUR 55 million up to EUR 110 million, 15 per cent of the amount of eligible costs shall be applied;

26.1.3. for the part of a project exceeding EUR 110 million, 0 per cent of the amount of eligible costs shall be applied;

26.2. in level 3 region of the NUTS of Kurzeme, Zemgale, Vidzeme, and Latgale (according to the data of 2021):

26.2.1. for a project of up to EUR 55 million, 50 per cent of the amount of eligible costs shall be applied;

26.2.2. for the part of a project from EUR 55 million up to EUR 110 million, 25 per cent of the amount of eligible costs shall be applied;

26.2.3. for the part of a project exceeding EUR 110 million, 0 per cent of the amount of eligible costs shall be applied;

26.3. for administrative territories in Pierīga region (including in Limbaži municipality, Ogre municipality, Saulkrasti municipality, and Tukums municipality):

26.3.1. for a project of up to EUR 55 million, 30 per cent of the amount of eligible costs shall be applied;

26.3.2. for the part of a project from EUR 55 million up to EUR 110 million, 15 per cent of the amount of eligible costs shall be applied;

26.3.3. for the part of a project exceeding EUR 110 million, 0 per cent of the amount of eligible costs shall be applied.

27. If the aid is provided in accordance with Paragraph 21 of this Regulation and the initial investments planned in the project are made in Latvia in two or several level 3 regions of the NUTS (according to the data of 2021) of different aid intensity, one of the following aid intensities shall be applied:

27.1. the aid intensity of the relevant level 3 region of the NUTS (according to the data of 2021) shall be applied to the initial investment costs within the jurisdiction of each level 3 region of the NUTS (according to the data of 2021);

27.2. if the final beneficiary benefits in one or several level 3 regions of the NUTS of different aid intensity (according to the data of 2021) from the initial investments regardless of their location, the lowest aid intensity among level 3 regions of the NUTS of aid intensity (according to the data of 2021) in which the final beneficiary benefits from the project implementation shall be applied to the whole project.

28. The maximum permissible aid intensity from the eligible costs of the project for the aid provided in accordance with Paragraph 21 of this Regulation shall be as follows:

28.1. in level 3 region of the NUTS region of Rīga (according to the data of 2021) - 30 per cent for small mid-cap merchants and mid-cap merchants, 40 per cent for medium-sized merchants, and 50 per cent for micro or small merchants;

28.2. in level 3 region of the NUTS of Kurzeme, Zemgale, Vidzeme, and Latgale (according to the data of 2021) - 50 per cent for small mid-cap merchants and mid-cap merchants, 60 per cent for medium-sized merchants, and 70 per cent for micro or small merchants;

28.3. for administrative territories in level 3 region of the NUTS region of Pierīga (according to the data of 2021), including in Limbaži municipality, Ogre municipality, Saulkrasti municipality, and Tukums municipality) - 30 per cent for small mid-cap merchants and mid-cap merchants, 40 per cent for medium-sized merchants, and 50 per cent for micro or small merchants.

29. If the aid is provided as regional aid in accordance with Article 14 of Commission Regulation No 651/2014:

29.1. the final beneficiary shall, in accordance with Article 14(14) of Commission Regulation No 651/2014, ensure co-funding in the amount of at least 25 per cent of the eligible costs of the project, using own funds or external financing, including a credit issued by another funding provider or financial leasing. No public aid, including the de minimis aid, has been received for such co-funding.

29.2. the final beneficiary shall comply with the conditions in accordance with Article 14(7) of Commission Regulation No 651/2014.

30. If aid for the development of innovative products cannot be provided in accordance with Commission Regulation No 651/2014, then it may be granted as de minimis aid in accordance with Commission Regulation 2023/2831 in compliance with the following conditions:

30.1. a loan shall not be granted to the final beneficiary if the de minimis aid is related to any of the sectors and activities specified in Article 1(1) of Commission Regulation 2023/2831, or if the aid is related to the conditions referred to in Sub-paragraphs 53.1, 53.2, and 53.3 of this Regulation, and to the sectors specified in Article 7(1) of Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (hereinafter - Regulation 2021/1058);

30.2. if the final beneficiary is concurrently operating both in any of the sectors referred to in Article 1(1)(a), (b), (c), or (d) of Commission Regulation 2023/2831 and in one or several other sectors which fall within the scope of application of this Regulation, it shall provide the separation of the activities or costs of such sectors in accordance with Article 1(2) of Commission Regulation 2023/2831, ensuring that activities in the sectors excluded from the scope of application of that Regulation do not benefit from the de minimis aid granted in accordance with Commission Regulation 2023/283;

30.3. in order to receive aid, the final beneficiary shall submit to the company Altum, together with the project application, information on the de minimis aid received previously in accordance with the laws and regulations regarding the procedures for accounting and granting the de minimis aid;

30.4. aid for commercial activity shall be granted in accordance with Commission Regulation 2023/2831, ensuring that the total amount of de minimis aid granted by a single Member State to a single undertaking does not exceed EUR 300 000 in any period of three years from the day of taking the decision to grant the de minimis aid in accordance with Article 3(2) of Commission Regulation 2023/2831, and in compliance with the conditions of Article 3(8) of Commission Regulation 2023/2831 in case of a merger or acquisition of merchants and with the conditions of Article 3(9) of Regulation 2023/2831 in case of the division of merchants;

30.5. a capital rebate shall not be granted and applied to the loan or parallel loan by the company Altum if it exceeds the limits referred to in Sub-paragraph 30.4 of this Regulation;

30.6. aid shall not be granted if the final beneficiary meets the criteria specified in the laws and regulations in the field of insolvency on the basis of which the creditor or debtor may request insolvency proceedings, or if the credit rating of a small mid-cap merchant or a mid-cap merchant is below "B-" in accordance with Annex to this Regulation;

30.7. the investments in the acquisition of new assets, the costs for the remuneration of employees related to the investment project, and the costs related to the lease of intangible assets shall be aided;

30.8. the lease and building rights to land, buildings, and plants have been corroborated in the Land Register (if applicable);

30.9. the investments in construction or acquisition of immovable property shall be eligible only for a complex investment project which also involves the acquisition of equipment in conformity with the eligible investment ratio of up to 40 per cent for the construction and acquisition of immovable property.

[25 June 2025]

31. The maximum capital rebate granted by the company Altum shall be up to 30 per cent of the amount of the loan granted by the company Altum with a capital rebate or the parallel loan granted by the company Altum with a capital rebate, but not more than EUR 1 500 000, without exceeding the permissible aid intensity specified in this Regulation or the amount of the de minimis limit available to the merchant.

[25 June 2025]

32. Final beneficiaries may apply for a loan with a capital rebate or a parallel loan with a capital rebate by the company Altum if, after completion of the project, they meet all of the following indicators by the end of each follow-up year:

32.1. the amount of investments of the final beneficiary in research and development in Latvia shall be at least EUR 50 000 per annum;

32.2. the amount of the turnover of the final beneficiary, compared to the amount of the turnover in the year when the investment project was completed, shall be at least twice the amount of the eligible costs of the investment project;

32.3. for every EUR 250 000 of the total available capital rebate, at least one new full-time job has been created or one existing full-time job has been retained and with an increase in remuneration, and in total at least two new full-time jobs have been created or existing full-time jobs have been retained and with an increase in remuneration;

32.4. the created jobs shall be retained for at least two years after creation thereof, and during this period the average monthly gross remuneration for employees recruited as a result of the implementation of the investment project shall not be less than the amount of the average monthly gross remuneration in the national economy in the previous year to which the coefficient 1.6 is applied. If no new jobs are created as a result of the implementation of the project but the existing ones are retained, the average monthly gross remuneration for the employees whose jobs are retained shall not be less than the amount of the average monthly gross remuneration in the national economy in the previous year to which the coefficient 1.6 is applied, additionally ensuring an increase in gross remuneration of at least 30 per cent.

[25 June 2025]

33. The Ministry of Economics shall, in cooperation with the company Altum, develop the follow-up methodology and publish it on its website.

[25 June 2025]

34. The final beneficiaries have the obligation to complete and, each year not later than by 1 May, submit to the Central Statistical Bureau a report on the implementation of research and development activities in the business sector for the relevant reporting year, and a report on innovations in business in accordance with the laws and regulations regarding the approval of official statistical sample forms and the completion and submission of such forms.

35. Upon request, the State Revenue Service shall provide the Ministry of Economics with the following data related to the final beneficiary:

35.1. the value of goods supplied to another European Union Member State within the territory of the European Union, the value of exported goods, and the value of transactions not made within the domestic territory, as included in the monthly value added tax returns of the final beneficiary for the last closed reporting year;

35.2. the gross monthly remuneration for employees recruited in the newly created jobs within the specified period and the date on which the final beneficiary has commenced an employment relationship with the respective person.

[25 June 2025]

36. After full completion of the project and receipt of the submission from the merchant for the commencement of follow-up, but not later than two years after full completion of the project, the Ministry of Economics shall commence and for three consecutive years conduct the follow-up of the indicators referred to in Paragraph 32 of this Regulation. The Ministry of Economics shall assess the fulfilment of the investment project indicators each follow-up year. The final beneficiary has the obligation, after the end of each full follow-up year, to submit to the Ministry of Economics documentation justifying the fulfilment of the indicators referred to in Paragraph 32 of this Regulation, including auditor's reports. The project shall be considered fully completed according to the deadline for the implementation of the project specified in the loan contract. The company Altum shall inform the Ministry of Economics of the actual date of the project completion.

[25 June 2025]

36.¹ Within two months after the end of the follow-up year, the Ministry of Economics shall receive from the State Revenue Service, the Central Statistical Bureau, and the final beneficiary the information referred to in Paragraphs 34, 35, and 36 of this Regulation, and within three months after the end of the follow-up year, shall evaluate whether the final beneficiary has achieved individually the indicators referred to in Paragraph 32 of this Regulation during the specific follow-up year, and shall decide on whether the indicators have been achieved or not. If the final beneficiary fails to provide the information necessary for the follow-up, the capital rebate shall not be applied.

[25 June 2025]

36.² The company Altum may apply a capital rebate if the Ministry of Economics has taken the decision on the achievement of the indicators. If the Ministry of Economics has taken the decision that the indicators have not been achieved, the capital rebate shall not be applied. The Ministry of Economics shall inform the company Altum of its decision.

[25 June 2025]

36.³ In order to ensure the conformity of the project and the granted aid with this Regulation, the company Altum has the right to transfer data on the final beneficiary and the project to the Ministry of Economics, whereas the Ministry of Economics has the right to transfer data on the final beneficiary and the project to the company Altum. The Ministry of Economics and the company Altum shall enter into an agreement for the exchange of information.

[25 June 2025]

36.⁴ The capital rebate shall be applied in three parts. After each follow-up year, one third of the capital rebate by the company Altum referred to in Paragraph 31 of this Regulation may be applied, taking into account the conditions referred to in Paragraphs 32 and 36.² of this Regulation.

[25 June 2025]

III. Conditions for Granting Aid for Research and Development Activities

37. Aid for research and development activities in the amount of EUR 300 000-1 000 000 shall be provided as a loan by the company Altum.

38. Aid for research and development activities shall be provided as de minimis aid in accordance with Commission Regulation 2023/2831 in compliance with the following conditions:

38.1. a loan shall not be granted to the final beneficiary if the de minimis aid is related to any of the sectors and activities specified in Article 1(1) of Commission Regulation 2023/2831, or if the aid is related to the conditions referred to in Sub-paragraphs 53.1, 53.2, and 53.3 of this Regulation, and to the sectors specified in Article 7(1) of Regulation 2021/1058;

38.2. if the final beneficiary is concurrently operating both in any of the sectors referred to in Article 1(1)(a), (b), (c), or (d) of Commission Regulation 2023/2831 and in one or several other sectors which fall within the scope of application of this Regulation, it shall provide the separation of the activities or costs of such sectors in accordance with Article 1(2) of Commission Regulation 2023/2831, ensuring that activities in the sectors excluded from the scope of application of that Regulation do not benefit from the de minimis aid granted in accordance with Commission Regulation 2023/283;

38.3. in order to receive aid, the final beneficiary shall submit to the company Altum, together with the project application, information on the de minimis aid received previously in accordance with the laws and regulations regarding the procedures for accounting and granting the de minimis aid;

38.4. aid for commercial activity shall be granted in accordance with Commission Regulation 2023/2831, ensuring that the total amount of de minimis aid granted by a single Member State to a single undertaking does not exceed EUR 300 000 in any period of three years from the day of taking the decision to grant the de minimis aid, in accordance with Article 3(2) of Commission Regulation 2023/2831, and also in compliance with the conditions of Article 3(8) of Commission Regulation 2023/2831 in case of a merger or acquisition of merchants, and conditions of Article 3(9) of Regulation 2023/2831 in case of the division of merchants;

38.5. the aid shall not be granted to the final beneficiary for whom, at the moment of the decision to grant the aid, insolvency proceedings have been declared by a court judgement, a case of legal protection proceedings has been initiated, or legal protection proceedings are being implemented;

38.6. aid shall not be granted if the final beneficiary conforms to the criteria specified in the laws and regulations in the field of insolvency on the basis of which the creditor or debtor may request insolvency proceedings, or if the credit rating of a small mid-cap merchant or a mid-cap merchant is below "B-" in accordance with Annex to this Regulation.

[25 June 2025]

IV. Procedures and Conditions for the Application for Aid

39. The final beneficiary shall apply for aid by submitting a project application to the company Altum.

40. The company Altum shall evaluate the final beneficiary and the project on the basis of the following documents submitted by the final beneficiary together with the project application:

40.1. the project application which includes a business project;

40.2. if the aid is intended to be provided in accordance with Paragraph 21 of this Regulation - a declaration signed by the final beneficiary that it has not carried out and will not carry out any of the activities specified in Article 14(16) of Commission Regulation No 651/2014, as defined in Article 2(61a) of Commission Regulation No. 651/2014;

40.3. if the aid is intended to be provided in accordance with Paragraph 21 of this Regulation - a declaration signed by the final beneficiary that the situation referred to in Article 2(18)(c) of Commission Regulation No. 651/2014 is not applicable thereto and it does not conform to the criteria laid down in the laws and regulations of the Republic of Latvian in order to initiate insolvency proceedings against it upon request of creditors or upon the debtor's application;

40.4. if a parallel loan by the company Altum is intended - the decision of another funding provider to grant the funding for the implementation of the project;

40.5. information on the aid planned and granted within the scope of the same project (including for the same eligible costs), indicating the date of granting the aid, the provider of aid, the aid measure, the planned and granted amount of aid, and the aid intensity;

40.6. if the aid is intended to be provided in accordance with Paragraph 21 of this Regulation - a declaration that the project application referred to in Paragraph 12 of this Regulation conforms to the requirements included in Article 6(2) of Commission Regulation No 651/2014 for the information to be included in the application and it has been submitted to the company Altum before the start of works;

40.7. if the business project provides for the development of a dual-use innovative product - an opinion of the Ministry of Defence;

40.8. if the business project provides for the development of an innovative product - an opinion of the Latvian Council of Science;

40.9. other information requested by the company Altum which is necessary to evaluate the conformity of the final beneficiary and the project to the conditions for the receipt of aid provided for in this Regulation.

[25 June 2025]

41. If other public funding is attracted to the project of the final beneficiary, the project may be commenced when the project application has been submitted to all the institutions where it has been applied for aid and the decision to grant the aid has been taken or a contract has been entered into (if the aid is not granted by the decision).

42. The company Altum has the right not to enter into a loan contract with the final beneficiary and to refuse the disbursement (including in cases when the decision to grant the aid has already been taken) if the company Altum becomes aware of circumstances that the final beneficiary or the project no longer meets the conditions of this Regulation and the aid cannot be granted in accordance with the laws and regulations binding on the company Altum.

43. The aid shall be granted to the final beneficiary at the moment when the company Altum takes the decision to grant a loan, a loan with a capital rebate, or a parallel loan with a capital rebate, specifying the maximum amount of the aid, the aid intensity, and the maximum available capital rebate. The aid shall be granted if the final beneficiary conforms to the requirements specified in this Regulation for the receipt of State aid in accordance with the State aid regulation referred to in Paragraph 21, 30, or 38 of this Regulation.

44. The term of the loan, loan with a capital rebate, or parallel loan with a capital rebate by the company Altum (including extension thereof, if applicable) shall not exceed 15 years.

[25 June 2025]

45. The extension of the term shall be possible, without exceeding the prescribed maximum loan term:

45.1. if the aid is initially provided in accordance with Paragraph 21, 30, or 38 of this Regulation and the extension of the term does not cause exceedance of the amount and intensity of the initially granted State aid, ensuring the aid transparency conditions laid down in Article 5 of Commission Regulation No 651/2014 or Article 4 of Commission Regulation 2023/2831, i.e. new aid is not granted;

45.2. if it is a new aid provided in accordance with Paragraph 30 or 38 of this Regulation, and if the aid was also initially provided in accordance with Paragraph 30 or 38 of this Regulation. If the final beneficiary conforms to the requirements for receiving the aid referred to in Paragraph 30 or 38 of this Regulation, the aid shall be granted when the company Altum has taken a new decision determining the maximum amount of the aid.

46. Repayment of the principal amount of a loan with a capital rebate or a parallel loan with a capital rebate by the company Altum:

46.1. in the part exceeding the amount of the capital rebate, shall be commenced by the final beneficiary after completion of the project;

46.2. in the part equal to the amount of the capital rebate, shall be commenced by the final beneficiary within eight months after the end of the follow-up period, but not later than 68 months after completion of the project, if the final beneficiary has failed to fulfil the indicators referred to in Paragraph 32 of this Regulation or if no information has been received on the fulfilment of the indicators referred to in Paragraph 32 of this Regulation. If the principal amount of the loan has been repaid by the time the when capital rebate is applied in such an amount that the balance thereof is smaller than the applicable capital rebate, the amount of the applicable capital rebate shall be reduced to the actual balance of the principal amount of the loan.

[25 June 2025]

V. Calculation of Grant Equivalent and Aid Cumulation

47. The grant equivalent for the loan, loan with a capital rebate, or parallel loan with a capital rebate by the company Altum shall be calculated in accordance with the following procedures:

47.1. the grant equivalent for the loan by the company Altum shall be calculated together for the whole aid period, deducting the actually applied amount of interest from the amount of interest to be paid according to the reference rate specified for the relevant period by the European Commission (published on the website of the Directorate-General for Competition of the European Commission), and also the risk rate the percentage amount of which is determined according to the rating of the loan recipient issued by the company Altum and the security offered;

47.2. the total grant equivalent for the loan with a capital rebate or a parallel loan with a capital rebate by the company Altum shall be calculated and determined by adding up the parts of the grant equivalent for the part of the loan or parallel loan by the company Altum which is equal to the capital rebate granted and the part of the loan or parallel loan of the company Altum which exceeds the amount of the capital rebate granted:

47.2.1. the grant equivalent for the part of the loan or parallel loan by the company Altum which is equal to the capital discount granted shall be equal to the amount of the capital discount granted to the merchant;

47.2.2. the grant equivalent for the part of the loan by the company Altum which exceeds the amount of the capital rebate granted shall be calculated together for the whole aid period, deducting the actually applied amount of interest from the amount of interest to be paid according to the reference rate specified for the relevant period by the European Commission (the reference and risk rates are published on the website of the Directorate-General for Competition of the European Commission) and the risk rate the percentage amount of which is determined according to the rating of the loan recipient issued by the company Altum and the security offered;

47.2.3. the grant equivalent for the part of the parallel loan by the company Altum which exceeds the amount of the capital discount granted shall be calculated together for the whole aid period, deducting the actually applied amount of interest from the amount of interest to be paid according to the reference rate specified for the relevant period by the European Commission (published on the website of the Directorate-General for Competition of the European Commission) and also the risk rate the percentage amount of which is determined according to the rating of the loan recipient issued by the company Altum and the security offered but not less than in the amount of 650 reference points.

[25 June 2025]

48. The aid granted in accordance with Paragraph 21 of this Regulation:

48.1. may be combined with other State aid the eligible costs of which cannot be determined, without exceeding the funding intensity and amount provided for in this Regulation and without exceeding the amount of the maximum public funding or maximum threshold thereof which has been determined in another State aid programme, individual aid project, or decision of the European Commission;

48.2. for the same eligible costs may not be combined with the aid which is provided according to the decisions of the European Commission taken in conformity with the Communication from the European Commission of 9 March 2023, Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (C(2023)1711 final);

48.3. may be combined with the funding granted within the scope of this or another aid programme or individual aid project, including for the same eligible costs, and with de minimis aid, provided that the funding granted within the scope of this Regulation together with the funding granted within the scope of this or another aid programme or individual aid project does not exceed the maximum permissible intensity of regional funding as specified in Paragraph 28 of this Regulation;

48.4. may not be combined with regional aid within the scope of other regional aid projects or programmes in respect of aid for remuneration costs.

49. [25 June 2025]

50. The final beneficiary, in conformity with Article 5(1) and (3) of Commission Regulation 2023/2831, may cumulate de minimis aid with another de minimis aid up to the relevant threshold value specified in Article 3(2) of Commission Regulation 2023/2831, and also may cumulate with other State aid in respect of the same eligible costs or other State aid to the same risk funding activity, if such cumulation does not result in exceeding the relevant maximum aid intensity or amount of aid which is specified in the State aid programme or a decision of the European Commission. The de minimis aid received within the scope of this Regulation may be combined with another de minimis aid for the same eligible costs if, after combining the aids, the relevant maximum aid intensity for a unit of aid or item of costs does not exceed 100 per cent.

51. If the conditions of Commission Regulation No 651/2014 or Commission Regulation 2023/2831 are violated, the final beneficiaries have the obligation to reimburse to the company Altum the aid for commercial activity received unlawfully within the scope of the project, together with interest, from the funds that are free from the aid for commercial activity in accordance with the conditions of Chapter IV or V of the Law on Control of Aid for Commercial Activity.

VI. Aid Accounting, Sectors and Activities not to be Aided

52. The final beneficiary has the following obligations:

52.1. to ensure the recording of information on the received funding and keep it for 10 years from the day of granting the aid;

52.2. to ensure the separation of activities and financial flows in the sectors to be aided if the final beneficiary is concurrently operating in the sectors to be aided in accordance with this Regulation and in the sectors not to be aided in accordance with Paragraph 53 of this Regulation;

52.3. to ensure the absence of the risks of conflict of interests, fraud, and corruption;

52.4. [25 June 2025]

53. The aid shall not be provided to the following activities, sectors, equipment, and final beneficiaries:

53.1. trade in weapons and ammunition (Nomenclature of Economic Activities in the European Communities Revision 2.1 (hereinafter - NACE Rev. 2.1), Class 47.63 "Retail sale of sporting equipment");

53.2. gambling and betting activities (Division 92 "Gambling and betting activities" of NACE Rev. 2.1);

53.3. manufacture and sale of tobacco products (Division 12 "Manufacture of tobacco products", Class 46.35 "Wholesale of tobacco products", Class 47.26 "Retail sale of tobacco products", and Class 47.92 "Specialised retail intermediary services" of NACE Rev. 2.1);

53.4. financial and insurance activities (Section L "Financial and insurance activities" of NACE Rev. 2.1), except for undertakings of financial technologies or such undertakings which are developing new business models, bringing innovations to life, creating new financial products and services, improving the types of provision of services and business models;

53.5. for the refinancing and restructuring of loans;

53.6. implementation of commenced projects if the final beneficiary is applying for aid in accordance with Commission Regulation No 651/2014;

53.7. in accordance with Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (hereinafter - Regulation 2021/1060):

53.7.1. the costs referred to in Article 64(1)(a) of Regulation 2021/1060;

53.7.2. co-funding of the projects of the European Union funds, including pre-financing in accordance with Article 58(7) of Regulation 2021/1060;

53.7.3. the final beneficiary for the acquisition of land if the cost of the acquisition of land exceeds 10 per cent of the total amount of the loan, loan with a capital rebate, or parallel loan with a capital rebate issued by the company Altum, or 15 per cent of the loan, loan with a capital rebate or parallel loan with a capital rebate issued by the company Altum if the land is located in an abandoned area or a former industrial territory with buildings in accordance with Article 64(1)(b) of Regulation 2021/1060;

53.8. the sectors specified in Article 7(1) of Regulation 2021/1058;

53.9. the sectors and activities specified in Article 1(1) of Commission Regulation 2023/2831 and not to be aided if the final beneficiary is applying for aid in accordance with Commission Regulation 2023/2831;

53.10. the sectors and activities specified in Article 1(2)(c) and (d) of Commission Regulation No 651/2014 and not to be aided if the final beneficiary is applying for aid in accordance with Commission Regulation No 651/2014;

53.11. the sectors and activities specified in Article 1(3) of Commission Regulation No 651/2014 and not to be aided in accordance with the definitions specified in Article 2(8), (9), (10), and (11) of Commission Regulation No 651/2014 if the final beneficiary is applying for aid in accordance with Commission Regulation No 651/2014;

53.12. [25 June 2025];

53.13. the sectors and activities specified in Article 13(a) of Commission Regulation No 651/2014 in accordance with the definitions specified in Article 2(13), (43), and (43)(a) of Commission Regulation No 651/2014 if the final beneficiary is applying for aid in accordance with Commission Regulation No 651/2014;

53.14. the sectors and activities specified in Article 13(b) of Commission Regulation No 651/2014 in accordance with the definitions specified in Article 2(45) and (130) of Commission Regulation No 651/2014 and the development of a broadband network if the final beneficiary is applying for aid in accordance with Commission Regulation No 651/2014;

53.15. if the beneficiary is applying for aid in accordance with Paragraph 38 of this Regulation;

53.15.1. the acquisition of land, acquisition of immovable property and construction, except when it is necessary for research and development activities of the project, taking into account the restrictions referred to in Sub-paragraph 53.7.3 of this Regulation;

53.15.2. the adaptation of ready-made equipment to install it and commence its use within the scope of the existing business activities.

[25 June 2025]

54. Within the scope of the implementation of the Activity, aid shall not be granted for activities which are considered as actually completed or fully implemented before the application for the receipt of funding under the aid programme is submitted in accordance with Article 63(6) of Regulation 2021/1060;

55. The company Altum has the following obligations:

55.1. to ensure the recording of information on the funding received and the aid granted, and to keep it for 10 fiscal years from the day when the last aid was granted in accordance with this Regulation;

55.2. to ensure compliance with the publication obligation specified in Article 9(1) and (4) of Commission Regulation No. 651/2014.

55.3. [25 June 2025]

56. The Ministry of Defence and the Latvian Council of Science have the obligation to ensure the absence of conflicts of interests when providing an opinion.

[25 June 2025]

56.¹ The Ministry of Defence and the Latvian Council of Science have the right to request from the final beneficiary additional information which is necessary to provide the opinion referred to in Paragraphs 17 and 19 of this Regulation.

[25 June 2025]

57. The Ministry of Economics shall, not later than three years after granting the aid, taking into account the data provided by the Central Statistical Bureau, compile information on the export volume and increase in productivity of the final beneficiary, including assessing whether the increase in productivity of the aided final beneficiaries reaches at least 10 per cent within three years from the day of submission of the final report of the final beneficiary.

58. After completion of projects, the final beneficiary shall, within two calendar months after the end of the calendar year, submit to the Central Statistical Bureau data on the following RIS3 indicators in each of the RIS3 areas:

58.1. the amount of research and development expenditures - public funding (EUR);

58.2. the amount of research and development expenditures - private investments (EUR);

58.3. the total research and development expenditures (EUR):

58.3.1. internal expenditures for the research and development works carried out that constitute capital expenditures - buildings, equipment, intellectual property rights, computer software (EUR);

58.3.2. external expenditures for research and development works commissioned in other institutions, undertakings, organisations;

58.4. the total research and development staff (full-time equivalent):

58.4.1. the internal research and development staff;

58.4.2. the external research and development staff;

58.5. the attracted foreign funding (EUR) (from international research programmes or foreign partners) for research;

58.6. industrial studies (amount of research and development expenditures, EUR);

58.7. feasibility study (amount of research and development expenditures, EUR);

58.8. emerging products (goods and services other than technology) (number);

58.9. experimental developments (amount of research and development expenditures, EUR);

58.10. emerging technologies (number);

58.11. created objects of industrial property (number).

[25 June 2025]

VII. Closing Provisions

59. Decisions to grant regional aid in accordance with Paragraph 21 of this Regulation may be taken until expiry of the validity of Commission Regulation No 651/2014 but not later than by 31 December 2027.

60. Decisions to grant de minimis aid in accordance with Paragraph 30 or 38 of this Regulation may be taken until expiry of the validity of Commission Regulation 2023/2831 but not later than by 31 December 2029, except for the case referred to in Sub-paragraph 45.2 of this Regulation when this decision may be taken until expiry of the validity of Commission Regulation 2023/2831.

[25 June 2025]

Prime Minister E. Siliņa

Minister for Economics V. Valainis

 

Annex
Cabinet Regulation No. 24
7 January 2025

[25 June 2025]

Annual Rates of the Safe-harbour Premium

No.	Credit quality class	Standard and Poor's rating	Fitch rating	Moody's rating	Annual rate of the safe-harbour premium
					Level of security1
					high	normal	low
1.	Highest credit quality	AAA	AAA	Aaa	0.4 %	0.4 %	0.4 %
2.	Very strong solvency	AA + AA AA -	AA + AA AA -	Aa 1 Aa 2 Aa 3	0.4 %	0.4 %	0.4 %
3.	Adequate solvency	BBB + BBB BBB -	BBB + BBB BBB -	Baa 1 Baa 2 Baa 3	0.8 %	0.8 %	0.8 %
4.	Solvency is vulnerable to adverse conditions	BB + BB	BB + BB	Ba 1 Ba 2	2 %	2 %	2 %
5.	Solvency is likely to be impaired by adverse conditions	BB - B +	BB - B +	Ba 3 B 1	3.8 %	3.8 %	3.8 %
		B B -	B B -	B 2 B 3	6.3 %	6.3 %	6.3 %
6.	Solvency is dependent on sustained favourable conditions	CCC + CCC CCC - CC	CCC + CCC CCC - CC C	Caa 1 Caa 2 Caa 3	-	-	-
7.	In or near default	SD D	DDD DD D	Ca C	-	-	-

Note. ¹High level of security - losses in case of default are 30 % or less. Normal level of security - losses in case of default are from 31 % to 59 %. Low level of security - losses in case of default are more than 60 %. The annual rate of the safe-harbour premium for newly-established performers of economic activity is 3.8 % but not less than the rate of the safe-harbour premium applied to the parent undertaking.

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Translation © 2025 Valsts valodas centrs (State Language Centre)