Commercial Code in Latvia
Commercial Code in LatviaUpdated on Friday 21st August 2015
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The Commercial Code in Latvia was established by the Civil Law in 1937. Because it was very old and outdated, new amendments have been brought in order to bring it up to date and in accordance to the European Union international laws.
The Company Law in Latvia, reformed in 2000, describes limited liability companies and joint stock companies as being the most popular forms of doing business in this country.
The limited liability company in Latvia
The most common business type in Latvia is considered to be the limited liability company. The minimum share capital required is 2,000 LVL and at least half of it must be paid in advance. A limited liability company in Latvia needs a director and allows foreign shareholders.
If you need information about how you can incorporate this type of entity, you may contact our lawyers in Latvia.
The joint stock company in Latvia
Another popular business type of company in Latvia is the joint stock company, used for larger businesses that want to gain public capital. The minimum amount of share capital must be 25,000 LVL and it is required to be paid in advance. As mentioned before, the joint stock company is public, so its shares can be publicly traded.
The Latvian general partnership
In Latvia, the general partnership is concluded under a company agreement by two or more partners. The general partnership accepts legal entities as partners, as well. In a general partnership, the liability falls on all partners.
The Latvian limited partnership
The limited partnership, like the general partnership, is made up by one or more persons who sign an agreement. The limited partnership also allows natural persons and legal entities as partners. The difference between the general partnership and the limited partnership is that the partner (the general one) will be held liable and answer with all of his or her assets for the obligations of the company and the other partner will only be liable for the amount of capital that he or she has brought in the partnership.
Branches and representative offices in Latvia
Foreign companies are allowed to open branches in Latvia that must respect the
same laws and pay the same taxes like Latvian companies. However, branches will not be subject to the withholding tax on profits, while a 10% tax will be applied to dividends.
Representative offices in Latvia are allowed to conduct only marketing, advertisement and promotion activities of the parent company. All business activities in Latvia must be registered with the Registrar of Companies.
If you want to open a company, you can contact our law firm in Latvia. Our Latvian lawyers will help you incorporate the desired type of company in this country.