Company Set Up In Latvia
The gorgeous Republic of Latvia in Northern Europe isn’t just a destination of choice for travelers, but business owners looking to expand their enterprises too.
The small country may have a population of just under 2 million, but it has a lot to offer in terms of pleasant climate, fertile soil for agriculture, rich forestry, and a plethora of animals and species. However, natural beauty isn’t the only thing in abundance here. The beautiful EU country in the Baltic region also has a stable economy and a bureaucratic setup that favors foreign investors.
Some of the thriving sectors of the Latvian economy are wood and food processing, as well as machinery and textiles. Production is carried out by a highly-skilled and well-educated Latvian workforce that is considerably cheaper than in many other EU member countries.
A rich business culture, favorable tax systems, and efficient infrastructure make Latvia an excellent choice for entrepreneurs expanding outside their jurisdiction. With CompyCo’s dedicated coordination and guidance, you can navigate the process of setting up your Latvian business smoothly and efficiently.
Forms Of Companies In Latvia
- SIA “Sabiedrība ar ierobežotu atbildību”—limited liability company
- AS “Akciju sabiedrība”—joint stock company
- SE “Societas Europaea”—European company
- PS “Pilnsabiedrība”—general partnership
- KS “Komandītsabiedrība”—limited partnership
- IK “Individuālais komersants”—Individual merchant/sole proprietor
What is the difference between SIA and AS companies in Latvia?
Company registration in Latvia – foreign investors most often gravitate toward the two most common company forms: SIA and AS.
To start a Latvian SIA company, you require a minimum share deposit of EUR 2800 and at least 1 shareholder and 1 board member. The company must pay at least 50% of the minimum share value upon incorporation and doesn’t need to have a council. Full amount of the share capital must be paid within 12 months in case less was paid when registering a company.
On the other hand, AS companies require a minimum investment in Latvia is EUR 35,000 to begin the incorporation process. These companies also require at least 1 shareholder but, unlike SIA, AS companies need to have a council of about 3–20 members.
Fundamentals Of A Limited Liability Company
Corporate Tax in Latvia | VAT in Latvia |
|---|---|
20% only on distributed dividends | 21% |
Fundamentals of limited liability companies in the Latvia
| Limited liability company | SIA |
| Minimum Share capital | 1 EUR. If corporate shareholder 2 800 EUR |
| Registered office required | Yes |
| Physical office required | No |
| Min. number of Shareholders | 1 |
| Min. number of Directors | 1 |
| Local Director required | No |
| Other requirements | No |
| Bank signatory must travel | In some cases, no |
| Timescale for company formation | 5 days |
| Timescale for bank account opening | 7 day |
| Timescale for obtaining VAT number | 7 days |
| Statutory audit requirements | No |
| Shelf companies available | Yes |
How can I set up my company in Latvia?
Setting up a company in Latvia is a simple and straightforward process.
An important step in setting up a business in Latvia is determining which company type is ideal for you. Depending on your business activities and country of origin, you can select one that caters to your needs.
Company registration In Latvia Steps
The first step is to prepare the required information and documents. A few payments are necessary for state duty, registration, notarial service, and more.
After that, the Latvia bank account must be opened and share capital paid. We will obtain a certificate about the paid-up share capital from the bank.
There are 2 ways to set up a company in Latvia. It is with director visiting the coutnry, or remotely – without visit. In case you wish to have a bank account in physical bank, visiting Latvia is mandatory to attend a meeting with the Bank.
In case you would like to open a bank account in Latvia for foreigners through an online bank, you can be identified online and visit your nearest Latvian embassy to sign the necessary documents.
The documents are then submitted to the Commercial Registry authority in Latvia, examined, and approved.
After the process of company set up in Latvia, your company should be registered with tax office and VAT obtained, if needed.
CompyCo’s experts bring years of experience and in-depth knowledge of the Latvian business environment to guide you every step of the way. Through our trusted local network, we coordinate the necessary processes so your business setup in Latvia runs smoothly and efficiently.
- The preparation of incorporation documents
- Establishing a bank account
- Guidance on which licenses you need
- Representing you for meetings and negotiations that can be done remotely
- Obtaining permits for your operations
More about Company Set Up In Latvia
Another new requirement is obtaining official emial address. As of 01. January 2023, all legal entities in Latvia are obligated to obtain official email address which is issued by the Government. We can assist with obtaining this e-address remotely.
You will also have to register in UBO (Ultimate Beneficial Owner) Register.
After the process of setting up a company in Latvia is done and all this has been obtained, we can offer you accountancy services tailored to your needs.
There is an option to obtain e-ID which can make your life easier in business.
Over the years, CompyCo has built strong relationships with licensed experts in various fields who support businesses through their earliest stages. Through our trusted local partners—from financial institutions to HR professionals—you gain access to insights from people who know the Latvian business environment inside out.
With Latvia’s eID, running a business becomes much easier and more cost-efficient. You can access government e-services, use an e-address, and sign documents electronically—helping you bypass many bureaucratic steps when dealing with public administration.
Company setup in Latvia is generally a straightforward process that can be completed within a few weeks. The country offers a favorable tax regime, a skilled workforce, and a stable business environment. However, navigating the legal and administrative procedures carefully with professional guidance is essential for a smooth and successful incorporation.
When expanding outside your jurisdiction, CompyCo coordinates with trusted specialists so you can feel supported every step of the way.
Bank Account Opening For Company Set Up In Latvia
The first thing we advise our corporate clients to do is to open a Latvian bank account non residents. Non-resident corporate investors can take advantage of the profitable business environment of Latvia by opening a bank account in a few simple steps.
In some instances, you can take advantage of remote bank account opening through remote identification. CompyCo coordinates with licensed local professionals who assist with preparing the necessary documentation and, where required, representation. Whether you choose to travel to Latvia to open your account or prefer a remote option, we’ll connect you with leading financial institutions in the country.
After paying a small banking fee and providing the necessary documentation to them, you’ll need to pick up your card and sign some paperwork to complete the process.
For more information about opening a bank account, head over here.
Accounting & Taxation
Some of the accounting and taxation obligations to take into consideration during Company Set Up In Latvia are:
- The tax year is the calendar year in Latvia.
- The profits that are taxable include investments, trading profits, and any assets sold for more than their original business costs in Latvia.
- Your business needs to maintain all necessary accounting books.
- The corporate income tax is 20% on all distributed profits such as dividends. The real estate tax is an annual is 1.5%.
- Latvian companies are issues VAT numbers with the format of the country code LV followed by a 9-digit number which ends with a letter.
- In Latvia, the current VAT rate is 21% on most goods and services. The rate may be lowered depending on the type of goods and services you provide.
- Doing business in Latvia requires compliance with local regulations and bureaucracy, but with the right approach, it can be a rewarding and profitable experience.
How can you employ staff in Latvia?
A strong culture of work ethic and a commitment to skilled, quality work makes Latvian employees some of the best in the world. You can hire highly educated professionals in any field to support your business setup and operations.
As a foreign business owner, it may be daunting to hire in a country that’s new to you. With CompyCo’s coordination and network of trusted HR professionals, you’ll be connected with the right talent that adds value from the very beginning.
Through our established partners, all employment-related processes can be managed on your behalf — including employment agreements, registering you as a non-resident employer, direct employment or PEO, payroll, and recruitment. Whatever your company’s needs are, we ensure cost-efficient and tailored HR solutions.
For clients seeking more involvement in the employment process, we can also provide access to software tools that give you deeper insight into payroll and HR procedures.
Have any questions? Take a look at our HR services page for more information about our International HR services!