January 12, 2021

Latvia is the most “startup friendly" country in the world

Latvia has joined Lithuania and Estonia as the most startup friendly countries in the world

Freya Pratty

2 min read

Latvia has joined fellow Baltic nations Lithuania and Estonia as the most startup friendly countries in the world, according to the Not Optional campaign run by Index Ventures.

The campaign ranks countries based on their stock option policies — which allow startup employees the right to purchase their company’s stock at a certain price. Stock option friendly policies make it easier for startups to hire, retain talent and ultimately grow.

Estonia and Lithuania had previously topped the rankings, ahead of 22 other countries including the UK, France and Germany, and the changes to the stock option policy in Latvia mean the country has moved up the list.


“The Baltic states have amazing founders with more hustle than many of their Western European peers,” said Andris Berzins, managing partner at pan-Baltic VC firm Change Ventures. 

“But they need to fight hard to attract the talent needed to scale more globally-competitive startups like Bolt, Vinted and TransferWise. Competitive stock option regulations are a critical tool to attract and retain this talent.”

Stock options have long been used in Silicon Valley to help startups compete with large corporates for talent, something they’d struggle to do on salaries alone. 

The changes in Latvia mean the Not Optional campaign now places five European countries ahead of the US, as more and more countries around the continent follow the model championed in America.

Last year, France revised its stock options, surpassing the UK in the campaign’s rankings. Germany is expected to pass new legislation in the next few months and the European Commission will publish a Startup Nation Standard in March, which is expected to cover stock options. 

However, the Not Optional campaign deems the stock option policies in large parts of Europe, including in Belgium, Spain, Austria, Finland and the Nordics, to below the level needed for young companies to attract talent. 

In Latvia, the changes to the policy have been welcomed by entrepreneurs. 

Mikus Opelts, the CEO of Latvian startup Giraffe360, a real estate photography business, says the changes will help his company grow. 

"Giraffe360 is a Latvian-origin startup with global growth ambitions and that means we need to be able to attract the best talent to drive growth. The new stock option legislation approved by Latvia will be essential for us to attract and retain that talent."

Freya Pratty

Freya Pratty is a senior reporter at Sifted. She covers climate tech, writes our weekly Climate Tech newsletter and works on investigations. Follow her on X and LinkedIn