Small and medium sized enterprises play an important role for the development of Latvia. In Latvia, SMEs produce more than a half of GDP and employ more than a half of employees. SMEs development has a special importance in the situation of economic downturn and increase of unemployment. It is necessary to support the development of SMEs to ensure a well-balanced development of all regions in Latvia and to reduce social and economic differences. Establishment of small and medium sized enterprises depends on business environment they operate. The state and local municipalities support is important for the development of small and medium sized enterprises. In 2010, there have been introduced several state support activities and the EU funding for entrepreneurship development has been used more actively. The establishment and development of SMEs in Latvia is promoted by the possibility to create enterprise with small capital; support of microenterprises through the support programme for microenterprise development; and introduction of the law “On Microenterprise Tax”; reduction of enterprise development fees; and introduction of patent-fees in several professions. The article studies problems met by Salaspils entrepreneurs and analyses proposals for business environment improvement. Some of problems are as follows: disordered legislation, unstable economic environment, shortage of finances, and discouraging business tax policy.