The Baltic Region is one of the most sought destinations by foreign investors. Among the three countries providing excellent infrastructure and logistics instruments, Latvia stands out by providing great support and legislation for foreign investments. The Latvian Government has adopted a pro-business mentality that has made it easier for foreign enterprisers to integrate in the country’s business system over the year. Among the advantages businessmen may benefit from, if deciding to set up a company in Latvia, are:
For a complete guide for company incorporation, you may refer to our law firm in Latvia.
The first step to open a company is to register it with the Latvian Commercial Registrar. The Latvian Commercial Code allows foreign investors to choose from several types of companies depending on their needs. It is important to know that foreign enterprisers opening companies in Latvia will benefit from the same treatment as local investors and they can choose to incorporate limited liability companies, joint stock companies, branches or representative offices. Businessmen looking for a more flexible way of doing business may also operate as sole traders in Latvia.
The first step to company incorporation is to draw the decision on foundation, which is the equivalent of the memorandum of association in other European countries. The next step is to draft the articles of association and pay the minimum share capital of approximately EUR 3,000. However, the Latvian Commercial Law is flexible and does not require the whole amount to be paid upon incorporation. Once the documents are submitted, it won’t take longer than four or five days until the company is incorporated.
One of the main reasons foreign investors should consider setting up a business in Latvia is the fact that, despite the economic crisis, the country’s economy has continued to develop. During the crisis, the Government implemented different programs to attract foreign direct investment, programs that have been improved over the years.
Among the industries foreign enterprisers can invest in, are the wood processing and the food processing industries, the textiles and machinery industries. With respect to the aid provided by the Government, investors should know they can benefit from corporate tax allowances up to 40% for up to 10 years, if investing in real estate, technology and equipment. Currently, one of the regions benefiting the most from the Government’s support is the Latgale Region in Latvia.
For more information about the legislation on foreign investments, please contact our Latvian lawyers.
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