Privatization in Latvia is almost complete. Virtually all of the previously state-owned small and medium companies have been privatized, leaving in state hands the electric utility, the Latvian railway company, and the Latvian postal system, as well as state shares in several politically sensitive enterprises. Despite the lack of transparency of the early stages of the privatization process, and certain difficulties in privatization of some of the largest companies, Latvian privatization efforts have led to the development of a dynamic and prosperous private sector, which accounted for 70% of GDP in 2002.

Foreign investment in Latvia remains high, as both Western and Eastern investors are trying to establish a foothold in the new EU member state, as well as to take advantage of Latvia's stable macroeconomic environment, central location in the region, and cheap labor. Representing 7.1% of Latvia's total foreign direct investment, the U.S. FDI stock in Latvia stood at $184 million at the end of 2002. In the same year, U.S. goods and services accounted for 1.6% of Latvia's total imports, while exports to the United States accounted for 4.2% of Latvia's total exports. Latvia is a member of the World Trade Organization since 1999. Latvia and the United States have signed treaties on investment, trade, and intellectual property protection and avoidance of double taxation.

In the long term, continued high economic growth in Latvia will depend on further improvements of the business environment, particularly successful drive to reduce corruption and strengthen the rule of law, and on Latvia's ability to use the opportunities presented by EU membership.