15 business incubators of Investment and Development Agency of Latvia (LIAA) provide support for the development of new, viable and competitive enterprises. Incubators provide individuals and enterprises with the working environment, consultations, events and training on general business issues, mentor support, as well as grants necessary for starting or developing a business.

The support for the business incubator participants is provided in the form of pre-incubation and incubation. Pre-incubation is meant as a support for persons having only an idea of their business and for merchants at the development stage of their idea. It is available free of charge with 100% co-financing by LIAA up to 6 months. Options offered by the pre-incubation are the development of the initial assessment of the business idea, acquisition of various business skills and competencies, use of necessary work environment (open office) and office equipment, as well as consultations and training and seminars. 

In turn, incubation support is provided for merchants with a clearly defined business idea for companies not older than 3 years, and it is available up to 4 years. In addition to the pre-incubation services, clients may apply for services 50% co-funded by LIAA. Available are financial, IT, legal, design and marketing services, expert and technological consultations, prototyping, testing and other specific services, implementation and certification of quality management as well as rants up to 10 000 euros for specific services, machinery and equipment.  

LIAA clients of the incubation may apply for a grant 50% co-funded by LIAA (100% pre-payment is required by the client): 

- Up to 10 000 euros for specific services (prototyping, testing, expert consultations etc.): available from company`s second year of the operation (registration) with the condition that the goals of the incubation are achieved.

- Up to 5 000 euros for equipment (machinery, materials and raw materials): available from the second year of incubation with the condition that the goals of the incubation are achieved.

Ineligible industries for LIAA support are fishing and aquaculture, primary production, processing and trade of agricultural products, wholesale and retail trade, financial intermediation, real estate activities, rental and leasing activities, gambling and betting activities.  

Since 2016 there are in total 365 incubation and 731 pre-incubation clients. Half of them represent product development, half - service sector. 39 companies represent RIS3 domains. Part of these companies have also applied for support from science and technology organizations. 

LIAA as an organization offers Innovation Voucher program, which can be utilized also by incubation clients. Vouchers are directly linked to SME`s and research and technology organization`s cooperation initiatives. 

Analysing support program, its benefits and challenges for clients can be concluded that in some cases, incubates cannot utilize all benefits business incubator can offer due to limited financial resources because 100% pre-payment is required (particularly for grants-section). There are also incubates who cannot focus on their business idea for 100%. In this case, there is a real probability that business will remain at a hobby level and no real action will take place. From the LIAA perspective, there is a challenge to ensure sustainability of business incubator program. Currently, this is directly linked to the EU funding planning period. 

LIAA Business incubators are quite unique support instrument since it is state-built support tool that covers the whole territory of Latvia and offers many services for industries eligible in this program. Resources needed to set up and to run the practice - 30,8 Mil. EUR (ERDF €26,198,233.00 and state funding €4,623,217.00).  

For Further information please see http://inkubatori.magneticlatvia.lv (English version currently under construction).