The procedure to obtain a financial license in Latvia was established following the adoption of the EU Directive in 2009. These financial licenses are granted by a dedicated commission and they permit collaboration with foreign agents. In the following guide, you can find essential information in this matter offered by our specialized company formation agents in Latvia.
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Business activities required to obtain financial licenses in Latvia
There are several business activities that must apply for a financial license in Latvia in order to legally operate in this country, such as:
- investment companies;
- banking services;
- brokerage activities;
- credit services;
- payment/E-money activities.
If you need assistance regarding which activity and financial license in Latvia suits your interests, our company formation agents in Latvia are at your disposal.
Who issues financial licenses in Latvia?
Most financial licenses in Latvia are issued by the Finance and Capital Market Commission (FCMC) and the Latvijas Banka (National Bank of Latvia), working in accordance with the Law on Payment Services and Electronic Money. Having a better understanding on how these authorities work and their specific requirements is an essential step in the process of obtaining a financial license in Latvia.
Find support from our company formation specialists in Latvia in this matter. Moreover, we can provide a wide range of services with regard to setting up a company in Latvia, such as tax regulations, employment requirements and financial issues. Our accountants in Latvia are at your disposal with further assistance in the business field.
Types and requirements of the financial licenses in Latvia
In order to open a company in Latvia and proceed to obtain a financial license in this country, it is important to check the most demanded licenses in the financial sector:
- Licensing for credit intermediaries and financial brokers: to obtain this license, the applicant must pay a federal licensing fee ranging from €250 to €1,000, based on individual circumstances. The applicants must also provide documentation, such as: signed application from, completed request form, proof of insurance, criminal background check and an official compensation policy for employees.
- Special license for consumer loan services: this license ensures a system for protecting the client’s interests in non-financial institutions and overseeing market participants in this field. To obtain this kind of financial license in Latvia, non-bank loan providers must pay a legislative fee of €250,000 for the special license, along with an annual fee of €55,000 prior to submission. There are also documentation requirements to follow.
- License for intermediary in privatization certificates: privatization certificates are government-issued securities used for the acquisition of privatized properties. The Department of Economy, through a licensing board, grants this financial license in Latvia for brokerage activities. To secure a permit for privatization certificates, a capital firm must submit a petition to the licensing authority.
Although company formation in Latvia might seem complicated, our team of professionals is at your disposal to provide guidance in following the suitable steps in your case.
Key Aspects of Financial Licensing in Latvia
As mentioned, the financial licenses requirements in Latvia are governed by the Payment Services Law. According to this legislation, any entity involved in the issuance of electronic money, offering financial consultation or payment services is considered a financial conduit within the country’s economy, thus making financial licensing a necessity. Once the financial license in Latvia is obtained, the company has authorization to:
- accept cash deposits and transfer funds to payment system accounts;
- handle virtual currency transactions equivalent to the funds deposited;
- execute direct and credit payments, including transactions via debit products, terminals and other general transfers;
- process payment orders using credit funds;
- issue financial instruments;
- provide customer services without disclosing any personal information.
For detailed guidance on obtaining a financial license in Latvia in relation to your chosen business activity, it is advisable to consult with our specialized team of company formation agents in Latvia.
Financial industry data in Latvia
Since joining the European Community in 2004, Latvia’s financial sector has experienced rapid growth, as official data shows:
- In 2021, total assets of Latvian commercial banks reached 25.46 billion EUR, with a 4% growth compared to the previous year.
- Total equity in Latvia was about 3.08 billion EUR at the end of 2021, with a total increase of 5% compared to 2020.
- The loan portfolio in Latvia offered by commercial banks in 2021 was 14.42 billion EUR.
If you are interested in further assistance for obtaining a financial license or start a company in Latvia, do not hesitate to contact us.