A shelf company in Latvia is a legal entity that has been incorporated but has had no business activity. In a sense, as the name suggests, it has been “left on a shelf”. Investors in Latvia can choose to purchase a company when they need to save the time required for the regular incorporation or when they need the company to be aged. There are several reasons why investors might prefer an aged company, and these can primarily refer to obtaining corporate bank loans and other credit options. However, the company’s age can sometimes be a synonym with its credibility in a broader sense. Thus, a shelf company will create a different business image for potential distributors, business partners, and other parties.
Quick Facts | |
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Legal entities available for shelf company | – Limited liability company (SIA) – Joint-stock company |
Time required for purchasing the company | The purchase takes a few days. Once both parties have come to an agreement on the price, the share transfer can begin. |
Types of features it includes | – bank account; – VAT registration; – accounting services; – assistance in obtaining the necessary certificates; – translation services; – nominee director/nominee owner; – company liquidation/ sale of your company to a new investor. |
The advantages of a shelf company | – saved time; – company longevity; – no credit; – miscellaneous requirements are already taken care of. |
Appointing new directors | Yes |
Capital increase allowed | Yes |
Certificate of no commercial activities | Yes |
Modify the objects of activity | Yes |
Participants in the purchase procedure | An individual or a legal entity |
The cost of buying a shelf company | Approximately 3,000 euros |
Our Latvia company formation agents highlight the traits and the benefits of the ready-made company and give you more advice and counselling if needed.
The following list includes the main characteristics of a shelf company in Latvia, out of which investors may prefer one or all of these traits. These are:
The fact that the shelf company is already registered, but has remained inactive, offers essential opportunities in how fast the new owner can commence the business transactions. This type of company will be able to make transactions immediately, and this is the primary advantage: with the help of our team, investors can complete the ownership transfer process and, when needed, start to trade immediately. Another benefit, similar to the first one, is that the shelf company will enter into new agreements as soon as the new owner starts trading. This is a complementary advantage because it can trade immediately and another reason why shelf companies can present beneficial qualities for investors.
Here is an infographic about the main aspects of shelf companies in Latvia:
The ready-made company comes with most of the steps needed for company registration in Latvia already completed by a company that offers these services. Therefore, the time the new owner would have spent registering the legal entity is significantly reduced. However, the company will have a designated and registered name; though, this can be changed if the new owner decides to do so and if the chosen name is available. This simplified process is an essential advantage. Many investors can steer away from starting a business precisely because they fear the lengthy procedures and even the task of looking for an available business name. When the corporate identity can be created around an existing name, which is already assigned to the shelf company, this decision is taken care of, saving time. Shelf corporations offer distinct advantages in terms of credit and financial possibilities for the company:
Our team of company formation agents in Latvia can help you with complete shelf company services. We can also help you with a due diligence process so that you can be sure that the legal entity you wish to purchase is indeed duly registered, has the stated characteristics and, most importantly, that it has no debts and liabilities to creditors.
Here is a video presentation on the features of shelf companies in Latvia:
Most shelf companies in Latvia are formed as limited liability companies or SIA companies. This type of business entity is popular among local and foreign investors because the shareholders are only liable to the extent of capital they have invested in the company. The corporation has legal capacity, and it is a popular option among those who wish to purchase a company because only one individual can find it, and there are no restrictions for non-residents. This business form cannot be traded publicly on the Stock Exchange. Investors looking to have this option can purchase another type of company, the joint-stock company. This is a business form suited to more giant corporations, and the principle of limited liability also applies in this case. Investors should know that the management requirements and the reporting and accounting requirements differ according to the chosen company type. The purchased SIA will have a registered address in Latvia, this is one of the primary conditions for company registration. This means that the shelf company will be already domiciled, meaning that the legal address will be in one of the top cities in the country, usually in Riga. The company will also come with all of the required statutory documents. Once purchased, the accounting and tax liabilities will fall onto the new company owner. Each firm operating in Latvia is required to create and keep accounting records. One of the most crucial prerequisites for a company’s success is accurate accounting. According to the Latvian Accounting Act, accounting should represent the full economic activity of the business, which affects the state of the company’s assets and liabilities. Get in touch with our accountants in Latvia if you want to learn more about the provisions of this Act.
If you are planning to purchase a shelf company in Latvia, you need to fulfil the following set of requirements:
These are the requirements that you need to stick with if you plan to purchase a shelf company in Latvia.
Our expert team members provide comprehensive guidance regarding company formation in Latvia. So, it is recommended to get in touch with our team for a swift process of opening a shelf company in Latvia. We will provide you with assistance in every step as described below:
All these are the services our seasoned team members are providing. If you want to purchase a shelf company in Latvia, you can rely on their efficient services. If you need to know about any other services our team provides in Latvia, please get in touch without any hesitation. Our consultants can also help you incorporating a company in Riga. They will not only help you to start a company in Latvia but also guide you in detail about the company formation benefits in this country. The first advantage of establishing a business in Latvia is the extremely cheap corporation tax rate that the state offers. CIT rates on profits that are reinvested are 0% beginning in 2018. As a result, when the business distributes actual earnings as dividends or other forms of payment, it will be liable to corporate taxation. If so, any dispersed earnings utilized for dividends or other non-business development-related activities will be subject to a 20% corporate income tax rate.
Please find below the information regarding corporate income tax (CIT) in Latvia, which regulates under the new CIT model enforced on January 21, 2018:
With due diligence, a chosen shelf company can meet the business needs as much as or even more significant than a newly established legal entity. We recommend seeking specialized counselling from one of our agents before signing the final purchase agreement for a shelf company. Contact us for more information about how we can help you purchase a ready-made business entity in Latvia.