The liaison office in Latvia, sometimes called the representative office, is a manner in which a foreign company can establish a channel of communication or representation between its main offices located in another country and the business parties and/or clients in Latvia.
The liaison office cannot engage in commercial or business activities and cannot derive profit from Latvia but it can represent a convenient first step for those who are looking to open a company in Latvia.
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The uses and advantages of the liaison office in Latvia
A representative office is not a legal entity and cannot engage in commercial activities or derive any form of income. However, its uses may be of importance, as summarized below:
- – market representation: entering the Latvia market can be useful for a number of reasons and companies can test their presence on the market before actually incorporating a legal entity.
- – no needed capital: there is no minimum share capital needed to open a representative office in Latvia.
- – control: the foreign company has complete control over the Latvian representative office and can manage its presence and image on the market.
- – low administrative costs: because the office is not a legal entity and does not have tax or reporting requirements, the administrative costs for the foreign company are minimal.
The representative office is often chosen by those investors who need to perform certain marketing or liaison activities before they decide to open a company in Latvia.
How to open a Latvian liaison office
The formalities for setting up a liaison office are simpler as this office will not derive income and thus will not have to engage in any reporting requirements. The company’s Articles of Association, as well as other references, information about the company directors and about the appointed company representatives, will be needed upon formation.
Investors can start a liaison office with the help of our agents who specialize in company formation in Latvia. Aided by a power of attorney, investors who are not available to travel to the country to establish this office can entrust one of our agents to handle the setup formalities.
The liaison office in Latvia is a convenient manner in which foreign corporations can enter the market for the first time. Contact us for complete details about the setup and assistance for staring such an office. In addition to this, consult with our company incorporation experts for help if you intend to start a company in Latvia. One benefit of conducting business in Latvia is the relatively low corporate tax rate that the country offers. Starting in 2018, profits that are reinvested will not be subject to corporate income tax. In essence, this means that the company will only be required to pay corporate income tax rates when it distributes actual earnings in the form of dividends or other forms of payments.