The state in facilitating the development of a successful national economy needs to address the issue of support for small and medium-sized enterprises in order to improve their competitiveness internationally, as well regards overall economic development and growth. Latvian entrepreneurs in seeking to raise their competitiveness need to focus on new technologies, products and service solutions. Taking into account changes in the political environment, as well as membership in the European Union, businesses must be ready to accept the challenges of a changing environment: to achieve higher productivity, to achieve greater added value, to enter new markets and to develop new products. There are a variety of support activities to promote new business development in Latvia, which may be financed by the government and EU structural funds, by private investors, investment funds and organizations. One financial instrument co-financed BY EU structural funds relates to business incubators which are national or regional economic and social development bodies whose mission is to assess and support new business start-ups and provide opportunities for their growth. The aim of this article is to clarify the nature of a business incubator, its importance in setting up a new company in Latvia, including use of European Union structural funds. This paper addresses the following issues: business incubator core, availability of EU structural funds, as well as a framework for results based on the support received.