Trusts in Latvia can be settled without considering specific legislation. However, trusts in Latvia have no legal instruments that can be used in estate planning. This article provides information about how to set up a trust, mentioning that our specialists in company formation in Latvia can tell you more about the available options in this sense.
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Trust legislation in Latvia
From the start, it is good to mention that there is no specific legislation on trusts in Latvia. Moreover, Latvia is not part of the Hague Trust Convention, which is why trusts cannot be used for property transfers in the family after the death of a person. There is, however, the possibility of concluding and signing a trusteeship. In this case, a person can choose his/her representative (trustee) to manage the assets after his/her death. On the other hand, the only exception where the trust concept is mentioned is by the Latvian Financial and Capital Market Commission, dealing with banks handling assets like monetary funds, with authorization issued by clients. We invite you to discover more about opening a trust in Latvia and the available alternatives from our specialists. You can opt for opening a company in Latvia to hold, manage, and protect your assets.
Trust agreements for wealth management
Although it is not exactly a popular option, some people prefer to open trusts for wealth management and, more precisely, estate planning. In this case, they opt for drafting a trust agreement specifying the terms and conditions under which personal assets are managed in an unwanted event. Here are other options at hand:
- Wills are the most popular instruments through which a person can decide what happens to his/her wealth/assets after death.
- Power of attorney is used quite a lot in Latvia. With this document, the person in question can appoint a lawyer or another person who has authority in terms of legal and financial decisions.
If you have chosen one of these options for managing the wealth you own, you can opt for our services. We can also put you in touch with our Latvian lawyers to get an idea of the legal aspects of trusts in Latvia, plus available alternatives.
Managing assets through company incorporation in Latvia
Starting a company in Latvia can be a handy option for holding and managing assets. This often comes with several advantages over a trust in Latvia, for which there is no applicable legislation. Thus, the limited liability company in Latvia is the most popular business structure and can be incorporated to manage the assets properly.
Contractual arrangements instead of trusts in Latvia
Although trusts in Latvia are not so popular, there are alternatives. In addition to setting up a company in Latvia, you can opt for contractual arrangements. These can be made and offered by financial institutions in Latvia. Normally, banks can be the ones with whom you can sign a contractual arrangement for managing assets, instead of a trust in Latvia. You can benefit from full services and advice before signing any document, so our specialists can explain the terms and conditions.
About bank assets in Latvia and the latest data
Here is some information about assets held by banks in Latvia:
- Around EUR 28.4 billion was the total assets of banks in Latvia at the end of 2023.
- The largest increase in bank assets was in resident deposits in 2023, as well as the second pillar pension.
- Around 22 billion was the total value of deposits/ savings registered by banks in Latvia in 2023.
Would you like to collaborate with our accountants in Latvia before opening a business? You can opt for our full services and contact our company formation consultants in Latvia. We can also provide you with comprehensive information about trusts in Latvia.