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, complete with favorable tax systems and efficient infrastructure, make Latvia the perfect choice for businesses who want to venture out of their jurisdiction. With the help of CompyCo’s dedicated support, you can set up your Latvian business in no time.

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?

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 of 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 companySIA
Minimum Share capital1 EUR. If corporate shareholder 2 800 EUR
Registered office requiredYes
Physical office requiredNo
Min. number of Shareholders1
Min. number of Directors1
Local Director requiredNo
Other requirementsNo
Bank signatory must travelIn some cases, no
Timescale for company formation5 days
Timescale for bank account opening7 day
Timescale for obtaining VAT number7 days
Statutory audit requirementsNo
Shelf companies availableYes
How can I set up my company in Latvia?

Setting up a company in Latvia is a simple and straightforward process.

The first step is to prepare the required information and documents. A few payments are necessary for state duty, registration, notarial service, and more.

The documents are then submitted to the Commercial Registry authority in Latvia, examined, and approved.

Latvia’s progressive, business-oriented, open economy offers business owners lucrative opportunities to boost their profitability. An important step in setting up a company 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.

CompyCo’s experts offer years of experience and extensive knowledge of the Latvian business environment to assist you every step of the way. We help you with the following processes to get your company up and running:

  • 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

It can be daunting to set up your business outside your jurisdiction, but you’ll be able to enjoy a relatively easy process if you meet all the requirements and submit the correct documentation.

CompyCo helps you every step of the process by offering expert guidance and assistance. We help you leverage the profitable Latvian market and take advantage of the competitive industries by serving your business’s unique needs.

Over the years, CompyCo has built strong relationships with experts in various fields who’ll support your company through its earliest stages. From professionals in financial institutions to HR experts, you’ll receive insight from people who are familiar with Latvian businesses.

Setting up your business outside your jurisdiction doesn’t have to be as daunting when you work with a company like CompyCo that’s invested in your business’s success!

Bank Account Opening

The first thing we advise our corporate clients to do is to open a Latvian bank account. 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 with the help of remote identification. CompyCo’s team can help you assemble the necessary documents and represent you in meetings with clients in such circumstances. Whether you opt to travel to Latvia to open your account or have the option to do it remotely, we’ll connect you with some of the 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 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 cost.
  • Your business needs to maintain all necessary accounting books.
  • The corporate income tax is 20% on all distributed dividends in Latvia. 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.
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 assist you as you set up your business and begin operations.

As a foreign business owner, it may be daunting to hire in a country that’s new to you. CompyCo will help you find the best talent for your organization that’ll add value to your business from the very beginning.

With experience in HR processes and a network of experts all over the world, we’ll take care of all the employment-related processes so you can focus on your business’s operations completely.

CompyCo takes care of all employment agreements, registering you as a non-resident employer, direct employment or PEO, payroll, and recruiting. Whatever your company’s needs are, we’ll provide custom HR solutions to you!

If you’re looking for greater involvement in the employment process, we’ll set up an account for you with software that provides a deeper understanding of payroll and HR processes.

Have any questions? Take a look at our HR services page for more information about our International HR services!