On March 26, the Saeima (Latvian Parliament) supported, in the third reading, amendments to the Social Enterprise Law that reduce the administrative burden for work integration social enterprises and promote the attraction of private investment in the sector.

The amendments stipulate that social enterprises that have been operating for at least three years or that have been established by a public benefit organization with experience in working with persons with disabilities may provide employment services to persons with disabilities without additional licensing. Until now, only enterprises holding a license issued by the State Employment Agency were allowed to provide this service.

The frequency of preparing informative reports has also been changed – the Ministry of Welfare will prepare a report on the operation and development of social enterprises once every three years instead of every two years, as previously stipulated.

The most significant changes to the law concern profit distribution. Until now, the law required social enterprises to reinvest all profits back into the company. From now on, subject to certain criteria, social enterprises will be able to distribute up to 50% of the profit for the reporting year.

It is hoped that this solution will encourage the attraction of private investment and foster the development of the social entrepreneurship sector. The Social Entrepreneurship Association of Latvia actively participated in the meetings of the Saeima’s Social and Employment Matters Committee, supporting these amendments, explaining the situation in the sector to members of parliament, and emphasizing the necessity of the changes.