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Open a Company in Latvia

Open a Company in Latvia

Updated on Friday 08th May 2020

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Foreign enterprisers wanting to do business in Latvia can choose between several types of companies. The Latvian Commercial Code is very flexible, allowing foreign investors to register the same type of companies as local ones without any additional requirements. Moreover, foreign investors will benefit from special incentives for opening companies in Latvia.
 

Types of companies in Latvia

 
 
  • - limited liability companies (SIA),
  • - joint stock companies (AS),
  • - partnerships.
 
Foreign companies can establish branch offices or representative offices. Foreign entrepreneurs may also register as sole proprietors in Latvia. Our Latvian lawyers can assist you with the registration procedure for any type of company.
 

Steps for opening a company in Latvia

 
The minimum share capital to open a limited liability company in Latvia is 2,800 euros, while the minimum share capital for opening a joint stock company amounts up to 35,000 euros. Both the limited liability company and the joint stock company can be incorporated by one or more shareholders who can be natural persons or legal entities. In the case of Latvian joint stock companies, the share capital must be deposited in cash only.
 
The steps to open a company in Latvia are:
 
  • - submitting the company formation documents with the Latvian Companies Registry,
  • - opening a bank account,
  • - registering for VAT purposes,
  • - registering employees for social insurance purposes.
 
Certain Latvian companies may also be required to obtain special licenses depending on the object of activity.
 

Documents required to open a company in Latvia

 
The following documents must be prepared and submitted when opening a company in Latvia:
 
  1. a registration application issued by the Trade Register which must be signed before a Latvian public notary,
  2. the charter,
  3. the Articles of Association,
  4. proof of depositing the share capital,
  5. proof of registered address,
  6. proof of payment of the state duty,
  7. proof of payment of the publication fee,
  8. details about  the shareholders and directors of the Latvian company.
For complete information about company registration or for notary services you can contact our law firm in Latvia.
We invite you to watch a short video about how you can open a company, helped by our lawyers in Latvia:
 
 

How easy is to start a business in Latvia?

 
The necessary time for establishing a Latvian business is no longer than one week if all the required documents are submitted in due time. The process of company incorporation includes the following steps:
 
 
  1. drawing up the deeds of incorporation,
  2. notarizing the deeds of incorporation,
  3. opening a bank account and depositing the minimum share capital,
  4. registration at the Commercial Register of Enterprises and at the State Revenue Service,
  5. registration of the employees for the state social insurance contribution at the State Revenue Service,
  6. registration for VAT in Latvia.
 

How easy is to hire personnel in Latvia?

 
The process of hiring employees can be eased by the numerous employment agencies situated in Latvia. The employers must keep in mind that there are certain mandatory actions that need to be taken in order to hire personnel, such as their registration at the State Revenue Service, in order to pay the state social insurance contributions.
 

What are the taxes in Latvia?

 
Any company incorporated in Latvia is taxed based on residency. Non-resident companies are only taxed on their Latvian income and foreign corporations can also benefit from reduced tax rates according to the provisions of a double tax treaty if such an agreement exists between their country of residence and Latvia.
 
The corporate income tax in Latvia is 15% but permanent establishments that have been operational for more than 12 months can benefit from a simplified tax regime: a tax imposed on 20% of the turnover. There is no capital duty imposed in Latvia. Companies must pay other taxes like the payroll tax, the real property tax, stamp duty and social security.
 
Our lawyers in Latvia can help you with tax compliance in the country and certain measures for tax minimization.
 
What are the main points of interest for foreign investors?
 
The main advantages come from Latvia’s strategic position and the status of a member in many organizations, such as EU, Schengen and World Trade Organization, this leading to all the benefits of free and open trade on the international market.
 
An advantage facilitating the trades is the good infrastructure that Latvia has. There are three major ports and from the Riga’s airport, the planes are flying to more than 80 destinations all over the world. All of the above are facilitating the trades, not only from Latvia to the foreign countries but also from these countries to Latvia.
 
The country also has important touristic potential and the services provided by the entrepreneurs involved in this business are considered affordable at a good quality. The tourism sector is bringing a considerable contribution to the Latvian GDP.
 

What are the advantages of a holding company in Latvia?

 
The holding companies enjoy mostly the provisions of the double tax treaties signed by Latvia over the years. According to it, the corporate income tax can be exempt or credited while the withholding taxes on dividends, interests and royalties paid to the subsidiaries can be minimized or even exempt from the provisions of such treaties.
 
Also, the European directive related to the parent-subsidiary coming from the state members is stipulating exemptions granted to the withholding taxes on dividends, interests, and royalties.
 
For more information about how you can start a business in this country, you may contact our Latvian lawyers.