Social enterprises will now be able to provide employment services for people with disabilities without being subject to the licensing requirements set out in the Law on Support for the Unemployed and Job Seekers, or the wage requirements during downtime as defined in the Labour Law. This will reduce bureaucracy and lower costs and administrative burdens for social enterprises that support labour market integration for people with disabilities.
These changes are included in the amendments to the Social Enterprise Law, approved by the Cabinet of Ministers on Tuesday, October 7. The amendments still need to be reviewed and voted on by the Saeima.
Minister for Welfare Reinis Uzulnieks stated:
“With these amendments, we are taking a significant step toward strengthening the social enterprise sector and making businesses more sustainable. By reducing the administrative burden and allowing more flexible use of profits for development, we are creating a more favourable environment for enterprises that provide essential support to people with disabilities and those at risk of social exclusion. Our goal is to encourage private investor involvement and ensure that social entrepreneurship in Latvia continues to grow and create real opportunities for people to enter the labour market.”
The amendments also allow social enterprises to distribute up to 50% of their annual profits, subject to specific criteria. This is intended to promote private investment in social enterprises, as currently the Altum grant program is the largest source of such funding, but long-term solutions are needed.
To further reduce the administrative burden, the amendments propose that the informative report on the operation and development of social enterprises be submitted to the Cabinet of Ministers every three years instead of every two years. In line with the Bureaucracy Reduction Plan, the amendments also aim to optimize the work of the Social Enterprise Commission by reducing the load of documents reviewed by representatives of ministries and the non-governmental sector.
Currently, there are 275 social enterprises operating in Latvia, employing more than 2,400 people, including 240 individuals from groups at risk of social exclusion. In the new Altum social entrepreneurship grant program for 2024–2025, 88 grants totalling €4.8 million have been awarded.