Setting Up a Sole Trader in Latvia
Setting Up a Sole Trader in LatviaUpdated on Friday 21st August 2015
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Commercial activity in Latvia falls under the incidence of the Commercial Code and the Civil Law and Group of Companies Law also contain provisions about commercial undertakings. Certain business activities are required to meet special requirements, but also special licenses and permits must be obtained before starting operating. The most common types of companies in Latvia are limited liability companies and stock corporations. However, the sole trader has also started to gain terrain among business entities lately.
How is a sole trader set up in Latvia?
In Latvia, individuals can register themselves as sole or individual traders. These individuals must register with the Latvian Commercial Register for the economic activity they will undertake, if his or her annual turnover exceeds 200,000 LVL or if the individual will carry out business activities under the form of commercial agent or broker.
A sole trader must also register with the Trade Register if he or she has more than five employees. The Latvian sole trader’s liability will extend to his or her property, but the individual trader will also benefit from all profits the business brings.
The self-employed person in Latvia
Apart from the sole trader, an individual may register as self-employed if carrying an economic activity. In the category of economic activities, a Latvian self-employed individual can provide services, property management, agricultural activities carried out on one’s personal land plot. The economic activity of a self-employed person is usually independently carried out and also comprises professional services rendered without being employed by a Latvian company.
The registration of a commercial activity in Latvia
Latvian sole traders must register with the Commercial Register in the city they carry out their business. Traders must also register with the relevant local administration of the Enterprise Register. Once these steps are concluded, the sole trader must also register with the tax authorities for the payment of compulsory social security services. The registration for social security payment will be made with the local State Revenue Service in Latvia and it must be completed within five days after the first month of activity.
For detailed information about establishing a sole trader or registration as a self-employed individual, you can contact our law firm in Latvia.