Social Entrepreneurship Opportunities in Latvian Municipalities

Until 2018, there was no legal form in Latvia to regulate businesses that were not aimed at profit making. Therefore, non‐profit oriented organizations were forced to operate in a controversial legal status. The entrepreneur could choose to be a merchant, or to do entrepreneurship through a nongovernmental organization – which is not suitable for entrepreneurship. Local municipalities were also forced to act in a manner like entrepreneurs. In order to give their organizations autonomy, municipalities set up commercial companies that, according to Latvian legislation, were programmed to make profit. This led to a situation where the municipality, which ‘’a priori’’ operates for the benefit of citizens, when establishing a new municipal company must behave like pure merchant whose only aim is profit. In this study, the possibilities of local governments to engage in social entrepreneurship were studied by using triangulation of data obtained by different research methods. The work assesses the possibilities of local governments in Latvia to transform their existing organizations, establish new social enterprises, and entrust social entrepreneurship functions to social enterprises founded by the private sector.