Company registration
in Latvia

To register a company in Latvia, it is necessary to understand that the full registration process involves working with three institutions – the Register of Enterprises, the State Revenue Service (SRS), and a Bank.

In order to open a company in Latvia and to obtain a certificate of tax residency it is necessary to apply to the register of enterprises.

To receive VAT and EORI number, to register a business activity and to receive access to the Electronic Declaration System it is necessary to apply to the SRS.

To open a temporary Bank account for the payment of the registered capital and current account is possible in one of Latvian banks.

The company registered in Latvia is taken by international business as onshore company and it has all corresponding advantages:

1. Tax Treaty (Agreement on avoidance of double taxation) (the list of 60 countries, 12 CIS countries);
2. Statutory tax and financial reporting;
3. Availability of Company Charter information and annual reports;
4. Unblemished reputation, prestige business, international trust and detachment from the concept of the offshore zone

There are 15 types of taxes in Latvia in accordance with the law "On taxes and fees". Payers are entities who are independently engaged in business activities.

Working in the domestic territory of Latvia, the taxpayer may not register as a VAT payer if the total value of taxable supplied goods and services in the previous 12-month period did not exceed EUR 40,000. After exceeding this threshold, it is required to register the entity as a VAT payer. It is also necessary to register as a VAT payer in the case of regular import of goods in total amount above 10,000 Euro.

VAT registration in Latvia is implemented by the State Revenue Service within 10 working days.

Possible periods of taxation are as follows: one month or quarter.The VAT Declaration must be submitted in electronic form (via Electronic Declaration System) within 20 days after the end of the taxation period.

• The minimum registered capital is 2800 euro.
• There is an opportunity to open a company for 1euro.
• Founders are natural or legal entities without restrictions on the jurisdiction of the owners

Tax rates for legal entities

• Corporate income tax (tax on profit) a 20%
• VAT 21%
• The rate of property tax is 1,5%

Tax rates for individuals

• Rate of income tax for individuals 23%
• Dividends 0%
• Capital gains 20%

The rates of taxes on labour

• Social mandatory contribution 34,09%
• Income tax 23%

• Advantageous geographic position
• Full-fledged member of the EU (from 2004), Schengen (from 2007), WTO (from 1999)
• Riga is the largest city in the Baltic States
• There are 3 large ports (Riga, Ventspils and Liepaja) with the status of SEZ
• State language – Latvian
• The national currency is Euro

Latvia is widely known, first, as a well-developed regional banking center, and second, as a trade corridor connecting the East and the West, and since 2013, considering the favourable international business innovations in the tax legislation, it is known as a Holding and Finance centre. Hence, the most effective way of operating for the company in Latvia can be as follows:

• For trade between European countries and the CIS countries;
• As a Holding and Finance centre (no limits on the participation share, duration of possession and type of activity).

Company in Latvia has the status of a prestigious onshore company and has a significant importance for international tax planning due to the rather large list of Tax Treaties – agreements on avoidance of double taxation (60 countries, including 12 CIS countries).

The advantages of Latvian company are as follows:

• Low cost of registration and administration of the company;
• Absence of restrictions on the jurisdiction of the owners;
• Stability of the banking system and 3 business languages (LV, ENG, RU);
• Possibility of obtaining a residence permit when investing in the capital of the company.

Registration process

• Сan be done remotely, it takes 1 to 3 days

Certification of documents

• For the member countries of the Hague Convention – apostille, for the other countries – consular legalization (through the MFA)

Register

• The open register provides available information about the founders, registered capital, Board members, and annual financial statements

Reporting

• The support of an accountant is needed, mandatory reporting via the electronic Declaration system (EDS) in Latvian

Audit

• At the end of the year there must be audit if 2 of 3 criteria are met: the total balance value exceeds 400 thousand Euro; net turnover exceeds 800 thousand euros; number of employees is more than 25

Certificate of fiscal residence

• Is issued without additional tests and conditions

VAT and EORI numbers

• Are awarded after passing the compliance audits of the SRS (State Revenue Service). Can be carried out by proxy