Our agents specialize in company formation in Latvia and have an extensive experience in working with both local and foreign investors for business projects in all of the major industries in the country.
|Types of companies||
Limited Liability Company
Joint Stock Company
Minimum share capital for LTD Company
Minimum number of shareholders for Limited Company
|Time frame for the incorporation (approx.)||
|Corporate tax rate||
|Dividend tax rate||
21%, a reduced rate of 12% also applies to certain goods
|Number of double taxation treaties (approx.)||58|
|Do you supply a registered address?||Yes|
|Local director required||No|
|Annual meeting required||Yes|
|Is accounting/annual return required?||Yes|
|Any tax exemptions available?||
– Individual shareholders are exempt from 10% dividend tax
– Offshore companies are exempt from paying withholding taxes on interest payments in Latvia
– Large investments tax deduction
– Deferred tax payments
– Special economic zones
– Donation relief
– Tax reduction for research and development
Latvia offers a welcoming business climate, with no restrictions on foreign ownership or the types of companies that can be incorporated by non-residents. The company incorporation is a reasonably simple process and having the help of our agents is useful, especially for first-time investors or for those who are not accustomed to working with Latvian authorities.
Before commencing the company registration in Latvia, investors need to choose one of the available types of companies. This is a decision based on the available capital, the number of investors and the desire to further expand the company in the future.
Investors may choose to incorporate a corporation or capital company, a partnership or start a business as a self-employed individual. Our team of Latvian company formation agents can help you understand the particularities of each business structure and choose the business form based on your needs. If you need information on company registration in Latvia, our advisors can guide you.
Documents required to open a company in Latvia
The following documents must be prepared and submitted when opening a company in Latvia:
- a registration application issued by the Trade Register which must be signed before a Latvian public notary,
- the charter,
- the Articles of Association,
- proof of depositing the share capital,
- proof of registered address,
- proof of payment of the state duty,
- proof of payment of the publication fee,
- details about the shareholders and directors of the Latvian company.
For complete information about company registration or for notary services you can contact our law firm in Latvia. Once your company is up and running, you are required to comply with all accounting requirements. So, if you need expert assistance, please get in touch with our accountants in Latvia. They will not only guide you about payroll, tax filing, and bookkeeping services, but also provide you with practical assistance in these matters.
How easy is to start a business in Latvia?
The necessary time for establishing a Latvian business is no longer than one week if all the required documents are submitted in due time. The process of company incorporation includes the following steps:
- drawing up the deeds of incorporation,
- notarizing the deeds of incorporation,
- opening a bank account and depositing the minimum share capital,
- registration at the Commercial Register of Enterprises and at the State Revenue Service,
- registration of the employees for the state social insurance contribution at the State Revenue Service,
- registration for VAT in Latvia.
The formalities are relatively few compared to other European jurisdictions. In part, this is what has allowed Latvia to remain in the top twenty countries in the world in terms of ease of doing business for locals and foreign investors alike.
Types of legal entities that can be used to open a company in Latvia
Latvia is a very appealing European destination to open a company in, one of the reasons being the variety of legal entities available for registration and the fact that these can be used for the creation of both small and large-sized enterprises.
The following types of legal vehicles can be used for company registration in Latvia:
1. the sole proprietorship or sole trader which is the simplest enterprise that can be set up by a single businessperson;
2. the limited liability company which is categorized into private and public entity, each with its characteristics;
3. the partnership which is also divided into the general and limited one;
4. the branch office which can be used by foreign companies seeking to establish operations they can fully control;
5. the subsidiary which is available for foreign businesses looking for flexible ways of expanding their activities in Latvia.
What need to be considered when setting up a business in Latvia is that companies require to have at least one shareholder and one or more directors, depending on their size.
As you can see, company formation in Latvia relies on various business forms that can be used for numerous activities in and outside the country.
Corporations in Latvia
A corporation in Latvia is a business form that has legal capacity and identity, separated from that of its founders. The shareholders are only liable to the extent of their capital investment and they can also be non-Latvian residents.
The types of corporations in Latvia are as follows:
- the limited liability company (LLC/SIA);
- the joint-stock company (JCS/AS);
- the European Company (SE).
The requirements for the incorporation of these business forms will vary in terms of minimum share capital and the management structure. Both the LLC and the JCS may be formed by one or more investors, natural or legal persons, residents or non-residents.
Our team of company formation agents in Latvia can give you complete details about the incorporation process and about the laws governing legal entities in the country.
If you decide to open a company in Latvia and need assistance, you can rely on our professional team in this country.
Partnerships in Latvia
The partnership is a business structure that may be suitable for two or more investors that share similar business goals and are willing to share the profits and duties for the business. It is not a legal entity in the same manner in which a corporation is considered one, however, it may still own property and assets in its name and not that of its founders.
There are two types of partnerships in Latvia, the general partnership (PS) and the limited partnership (KS). In the general partnership all members are fully liable for the business while in the limited one, at least one member is fully liable while the other(s) are only liable to the extent of their investment. We can help you during the process of company registration in Latvia.
Self-employed individuals in Latvia
Entrepreneurs can also choose to do business in Latvia as natural persons with liability for their business. These are the individual merchant and the self-employed individual. These business forms benefit from the lightest reporting requirements and do not need to be registered unless their annual turnover exceeds a certain amount.
Foreign companies can establish their presence in Latvia through a representative office or through a branch.
Our agents can help you open a company even if you cannot be present in the country at all times. We can handle part of the procedures through a special power of attorney.
Once they are registered, companies can start their commercial activities and handle any other subsequent activities such as hiring employees – a step during which our agents can also help you with relevant information. Depending on the chosen business field, some sector-specific special permits and licenses may be needed. We can help you apply for these.
The corporate management requirements, as well as the accounting and auditing requirements, will vary according to the chosen type of company. The simpler business types, like the sole trader, have the fewer requirements and the joint stock company is subject to more cumbersome requirements.
Company registration in Latvia is not complicated, however, for a quick incorporation procedure, you can count on us.
Among the aspects to consider about company registration in Latvia is to have a legal address in this country in order to be considered a resident. There is also the possibility of setting up non-resident companies, however, these cannot take advantage of fiscal benefits.
Also, the company needs to have a local bank account in which the share capital must be deposited, and which after commencing the operations can be used for financial transactions.
If you want to open a company in Latvia and need more information on the formalities to complete, our agents are at your disposal with details explanations on how to proceed.
Share capital requirements for company registration in Latvia
Foreign investors who want to open a business in Latvia must consider the amount of money necessary to operate in this country. While for certain legal entities, certain requirements are imposed by the law, for others (partnerships and sole traders) there are no such impositions.
From a share capital investment point of view, the private limited liability company is most advantageous as it requires a minimum amount of EUR2,800 out of which 50% must be paid upon incorporation.
In the case of a public company, the minimum share capital is set at EUR35,000, however, this is a rather low amount of money compared to other European and EU countries.
The Company Registry in Latvia
The Company Registry in Latvia is called the Register of Enterprises of the Republic of Latvia and it is the public institution responsible for registering companies, traders, representative offices, and branches. Other types of establishments are also registered here, including mass-media associations or foundations.
The Register may be accessed by individuals who wish to know more about companies that have already been registered in the country. The basic information will include the type of company, its registered office and assigned registration number, the date of registration and other information. Individuals may obtain information about registered companies in Latvia by filling in a form and paying a fee.
One of our agents who specialize in company formation in Latvia can help you with a thorough company search as this may be relevant to a company due diligence procedure. We also offer company formation services in major Latvian towns – Daugavpils and Liepaja.
Taxation in Latvia
Latvia has a low corporate income tax rate, one of the country’s strongest points for investors. The standard rate in 2018 was 20%, with certain expenses subject to an effective tax of 25%. Other taxes for companies include the real estate tax, the value added tax, the natural resources tax and others such as social security contributions.
With a wide range of advantages for investors, reduced investment and labor costs (compared to other EU) countries and economic stability, Latvia is a competitive business location.
Those who want to open a business in Latvia can choose between several legal entities they can use in order to operate on the local market.
Tax incentives in Latvia
Latvia also has a tax incentive programme and it is part of its Special Economic Zones. These are the following:
- Riga Free Port,
- Ventspils Free Port,
- Liepaja Special Economic Zone,
- Rezekne Special Economic Zone,
- Latgale Special Economic Zone.
Business formation and entrepreneurial activities, in general, are promoted and encouraged in these regions and the main tax incentives available are related to tax exemptions. For example, some of the advantages for companies set up in the Free Zones and Free Port areas include a complete exemption from the real estate tax, the corporate income tax, the withholding tax on dividends and the fees for intellectual property usage for non-residents.
Other incentives for doing business include those for labor: grants for creating new jobs, pre-hiring training and raising the qualification of employees and also those related to research and development activities.
We invite you to reach out to our agents who specialize in company formation in Latvia to find out more about the manner in which these tax exemptions apply and which companies can qualify.
Annual reporting requirements in Latvia
The Annual Accounts and Consolidated Annual Accounts Act are the available sources of regulation for preparing and submitting the annual accounts. The types of companies that are expected to comply with these are the commercial companies, the cooperative companies and other European commercial companies registered in Latvia. Companies are classified into four categories for accounting purposes and if two out of the three existing criteria are met two years in a row, then that company can be reclassified accordingly. The classification criteria include the net revenue, the total balance sheet and the average number of employees per a given financial year.
Latvia has much to offer to foreign investors, starting with a good geographical location and advanced transport infrastructure, followed by an attractive trade and customs policy and a generally welcoming and supportive business environment. Business owners have access both to a welcoming business climate and also to a large number of skilled employees. Latvia offers all of the key elements for developing a new company into a successful business.
Foreign investments in Latvia
The top foreign direct investments in Latvia are in the following sectors: the services and the financial sector, retail and wholesale, real estate, manufacturing, agriculture, construction, transportation as well as professional and consulting services and other activities.
Foreign entrepreneurs will find it easy to invest in Latvia not only because they are presented with an important market and location advantage, but also because the country has harmonized its legislation with that of the European Union.
One of our agents can give you detailed information about the tax incentive regime that offers a convenient degree of reduction for the corporate tax and the special free zones in Latvia, including Riga.
Foreign investments represent an important share of the country’s Gross Domestic Product, as the number of overseas entrepreneurs operating here are attracted by the Latvia’s legislation that favors them.
According to recent statistics:
- foreign direct investments (FDIs) inflow increased to 16.7 billion USD in 2020;
- manufacturing was the industry attracting most foreign investments between 2010 and 2020 when it reached 1.9 billion euros;
- most investments came from Sweden which accounted for a total of 16.4% of the FDI in 2020;
- in 2020, financial and insurance services attracted most of these investments with a total quota of 24%.
Contact our company formation agents in Latvia for more information on how to open a business in the country and the main regulations as per your chosen business sector. It is recommended to get help from the incorporation experts whenever you decide to open a company in Latvia. With the assistance of our local experts, you will be able to comply well with the company formation regulations. The Latvian Enterprise Register accepts documents solely in Latvian, much like all other official entities in the country. Therefore, it is likely that you will need to hire a legal firm or business that specializes in company formation and accounting services. The services of our experts are at your disposal.