High Tech for Export Growth: High Tech Manufacturing in Latvia

About GroGlass

• 2006 – Building Construction Began

• 1962 – Sidrabe Established

• 2009 – First Commercial Product Shipped - Museums

• 2008 – Machine Installation Complete

• 2010 – New Markets – Displays and Architectural

• 2004 – GroGlass Established, Machine Design Began

GroGlass products – Anti-reflective Coatings

GroGlass Customers: Museums

Svyatoslav Roerich, Rainbow of the Waterfall, 1934

Courtesy of the Latvian National Gallery

Painting with Regular Glass

Painting with Artglass by GroGlass

GroGlass Customers: Electronic Displays

Bang & Olufsen, BeoVision 10

GroGlass Customers: Architecture

GroGlass Customers: Lighting Fixtures

• Lighting fixtures that use AR glass are 8% more energy efficient

• AR Glass 8% more light through

GroGlass Customers: Cold Storage Displays

• Cold Storage displays are covered with glass to save energy

• Double-glazing makes the product less visible

• AR Glass helps to increase in-store sales by allowing the energy saving while increasing product visibility

GroGlass – Potential World Leader in AR Coatings

• Latvian “know-how” produced the most efficient and the largest Anti-Reflective Glass coater in the world

• The Latest technology allows for the Best Quality

at the Lowest Price

• True Potential to be the World Leader in its field

How could Latvia be a richer country?

• High Tech Clusters feed Countries

• That Wealth comes from Abroad because we Export

• 1 Manufacturing job creates 8 jobs in the Service Sector

• High Tech Manufacturing has high Value-Added

• Value-Added is the Wealth of the country

• Wealth has to be created

“Growing Oranges in Antarctica”

High AdministrativeBurdens

Utility Connection Difficulties

Thin Qualified Worker Base

No Tax Incentives forInvestment in Assets

Inefficient VAT repayments

Make it easy to run our legitimate business

Pre-payment of Corporate Income Taxes –

an Interest-free loan?

It is not competitive to pay taxes!

• Tax-paying companies are less competitive!

• Companies paying in envelopes can afford to pay more to their workers because they evade taxes

• Government should focus on the Grey economy

Tax Incentives for Foreign Investment

• How to attract foreign investment?

• Simple - Create tax breaks

• Estonia: and easy choice in the Baltics - taxable profit can be cut in half by the incurred costs of a fixed assets…

• Extend Tax Loss Carry Forward to encourage risky investments like ours

• Our technology requires us to hire foreign specialists to train the local workforce

• Difficult work permit procedures

• No cap on social taxes make our salaries non-competitive

Make it easy to hire qualified foreigners

Reduce Administrative Burdens

• Having Company Cars requires a full-time accountant for all compliance documents?

• Simplify the new employee reporting to once/month

• State-funded Projects:

–Showcase Latvian-made products

–When possible, support the local manufacturing base, not the Foreign one

Lets be proud of “Made in Latvia”

Conclusion

Create an environment where it is easy to run a legitimate business

“Growing Oranges in Antarctica”

High AdministrativeBurdens

Utility Connection Difficulties

Thin Qualified Worker Base

No Tax Incentives forInvestment in Assets

Inefficient VAT repayments

No CIT Pre-paymentLow Administrative Burdens

Fast VAT refunds

Easy connection to utilities

No Limits on Tax Loss Carry Forward Fast access to EU funds

Easy work permit laws for foreigners

Thank you for Attention