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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).