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Cost of running a startup in Riga, Latvia

Summary of how much it costs to run a small tech startup in Riga, Latvia

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Riga is the capital city of Latvia, a country in northeastern Europe.

Table of Contents

Salaries

Salary and bills are generally paid monthly, so it is very common to talk about your monthly salary.

There are three numbers to be aware of: take home aka on hand pay is what is discussed in a negiotation, before tax aka on paper pay is what appears on the contract, employer cost includes additional taxes that the employer must pay.

Here is an example:

If you offer a take home salary of €2000, you can use the constant multiplier of 1.8 to calculate the true cost since €3587/€2000=1.7935.

Effective tax rate is 100%-€2000/€3587 = 44.24%, so 45%.

Here is the cost of other monthly salaries:

Take home Employer
€1000 €1800
€1500 €2700
€2000 €3600
€2500 €4500
€3000 €5400
€3500 €6300
€4000 €7200

A workday is typically 8 hours long or 40 hours/week or 160 hours/month.

Minimum vacation mandated by law is 20 days aka 4 weeks every year.

Startup Law

Flat tax rate of €252/month per employee.

Requirements:

The so-called startup law takes effect on January 1, 2017 and it remains to be seen how it will be abused.

Source: http://www.labsoflatvia.com/news/latvia-passes-innovative-startup-law

Under the table

Some dev shops like Scandiweb or businesses where development is a cost center like 1189.lv offer the employee a choice to get paid a smaller salary above board or more under the table. They will transfer €500 to the employee's microcompany and literally pay the rest in cash in an envelope.

Data points

Here are some unverified anecdotal data points (take home, per month)

Surveys

These are self-reported

Office space

In Riga city center:

There are many co-working spaces in Riga (TechHub, The Mill, OraculeTang, Birojnīca and more) and the average price I'd say is €125 per person per month.

There are several places where you can go and work for free like the National Library of Latvia and any library at the University of Latvia.

Cost of living

Numbeo provides in my opinion a very accurate representation of averages prices in Riga.

If you make €1400+, you are top 2% if not 1% (source).

Where to find developers

If you are looking to hire a developer in Riga, here are some ideas.

There are several meetups taking place in Riga. In my experience, the content is hit or miss but you can use them to pitch your company. Sponsoring a meetup will cost about €250 (for room and beer) and you'll get a banner with your company logo, a couple of words at the beginning to pitch your company and tell them who you are looking for.

One less conventional way to get developers' attention is to get Facebook Ads targeted at them. If they don't have AdBlock installed, they'll see your add and if they are interested (a small challange perhaps) you may get their attention. Facebook Ads are very cheap in Latvia, even less than €0.20 per click.

Another way is to offer scholarships or stipends to very good students. A one-off payment of €1000 or €500 in exchange for them writing their Bachelor's thesis on a topic of your choice. Obviously, the students will be busy writing their thesis, but the universities will give you some publicity this way.

Lastly, you can place an ad on LinkedIn or in the worst case on cv.lv