Business Bankruptcy Rates in Latvia Rise Despite Previous Profits
- Over the past decade, Latvia has seen a gradual decrease in the number of declared insolvency processes.
- Unlike the general trend, the number of insolvency processes for legal entities has not consistently decreased in recent years.
Decline in Insolvency Processes and Exceptions
Over the past decade, Latvia has seen a gradual decrease in the number of declared insolvency processes. In 2025,this number fell to 836 processes,19.15% less than in the previous year. This trend is observed for both legal and natural persons. Interestingly, despite the overall decline, data reveals isolated cases where companies declared bankrupt had previously operated profitably. Such as, in 2023, companies that were declared insolvent in 2024 collectively turned over €491.58 million, but this figure fell to €75.27 million in the following year. While most of these companies operated at a loss, some even managed to generate profits of several thousand euros before insolvency was declared. One example is locomotive repair and modernization company SIA “Baltic Loco group”.
Increase in Legal Person Insolvencies and Legal Protection Processes
Unlike the general trend, the number of insolvency processes for legal entities has not consistently decreased in recent years. in 2024, compared to 2023, the number of insolvency processes for legal entities increased by 17%, with 283 such processes declared. At the same time,there has also been an increase in the number of legal protection processes (LPP). In 2024, 28 LPPs were declared, 52% more than in the previous year. This suggests that entrepreneurs are increasingly seeking legally provided solutions to save their businesses before reaching insolvency.