Company incorporation Latvia Company incorporation Latvia

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Main characteristics for registration in Latvia

Corporate tax
0%
Best choice for:
Holding
Time to complete the registration
5 days

Company Registration in Latvia

Latvia is an attractive country for doing business. Being the EU member, Latvia is an excellent place to enter the EU market for non-residents. Registration and operation costs in Latvia are cheaper than in the rest of Europe. In the meantime, this country offers excellent business environment and competitive taxes at the same level as in other countries.

This article gives you an overview on how to set up a company in Latvia and key points on how your business can benefit from it.

The process of company formation is rather simple in Latvia and you can choose from several types of legal entities:

  1. Limited liability company: this is the most popular type of legal entity thanks to its simplicity of registration and operation. The share capital of LLC is EUR 2,800. The share capital can be less if it has less than five individual shareholders and if it meets certain conditions provided by the Commercial Law.
  2. Joint Stock Companies: JSC can be closed or open. The minimum share capital is EUR 35,000.
  3. Partnerships: consist of two or more persons. It can be general partnership with partners having unlimited liability for partnership debts or limited partnership which are established by limited and unlimited partners where the liability of limited partners is limited to the amount of capital contributed.
  4. Sole proprietorship
  5. Branch or representative office

Tips: The cost for company formation in Latvia is rather cheap and simple. Company registration documents to be submitted depend on the type of legal entity you choose from.

The term for registering a company in Latvia is 1-2 weeks.

Tips: it is possible to register a small-capital limited liability company with the smallest authorized capital in the amount of 1 Ls (1,4 EUR). Such companies must invest 25% of annual profit into an obligatory reserve.

There is no requirement to reserve the company name prior to its incorporation. As a general advice, it is essential to think on the first impression your company makes. Before you register your company, you should think how it works on your logo, website, and advertisements and check whether there is no registered trademark that has identical name. You should try to avoid such similarities; otherwise you will fail to protect your IP rights.

Companies incorporated in Latvia may have one director with any citizenship or residency. No nationality or residency requirement applies to shareholders.

The company secretary is not required.

The company’s director is responsible for maintaining accounting and keeping accounting records in Latvia. The reporting period is 12 months.

Consolidated reporting is only required for group of companies that exceeds certain amount of assets, net turnover and a number of employees.

Statutory audit is not mandatory for LLCs.

Tips: Latvian law allows computerized accounting which is a convenient way of doing business. Accounting is conducted in Latvian language and the measure of value must be Euro. Please contact us for more information about online accounting services.

Registered address is mandatory when incorporating a company in Latvia. The company’s registered address is an official address shown in the Commercial Registrar and is used for official correspondence. It is possible to arrange for a registered address through a representative or agent, such as Ecompany.ltd.

The incorporation documents in Latvia include the following:

  • application form KR4 with signatures certified by a notary;
  • memorandum of association;
  • articles of association;
  • bank statement confirming the payment of share capital;
  • folio of the shareholders’ register with indication of a full composition of shareholders and division of shares (with signatures certified by a notary);
  • consent of each member of the board of directors to hold the office;
  • announcement of the board regarding legal address
  • consent of the real property owner to the registration of legal address of the company (not required if the owner is among the signatories of the application);
  • a confirmation of payment of the statutory fee;

The company registration process in Latvia is quick and simple. While preparing incorporation documents, the founding members need to arrange for the following:

  • preparing incorporation documents;
  • renting an office and obtaining permission from the owner of the office;
  • opening a temporary bank account for payment of share capital;
  • appointing director(s);
  • paying registration fees;
  • certifying of signature(s) on the application form with a notary.

Once the incorporation documents are ready, the applicant or its representative submits documents to the Registrar of Companies. Upon registration, the Registrar of Companies issues an incorporation certificate.

Following these steps, a company registered in Latvia gets tax identification number (TIN) and can open a permanent bank account.

Incorporation certificate is used by Latvian registration authorities to show that a company is duly registered. The certificate contains public information about the company, including full legal name and date of incorporation.

These days the certificate of incorporation is provided in a digital form. Upon request, it is possible to apply for a certificate in a paper form. Such request can be made together with the application form on incorporation or any time later. In case of an electronic form, the certificate of incorporation will be signed with a secure digital signature and a time stamp.

The issuance of the incorporation certificate in Latvia in a hard copy is subject to a statutory fee of 12,20 Euro. The certificate is ready within 3 business days.

We can assist you with obtaining the incorporation certificate in Latvia, including translation, obtaining certified copies and apostille.

 

You can use our checklist for rapid company formation in Latvia which allows you to prepare all necessary documents and information as quickly as possible:

  • check the proposed company name with trademark register to ensure your company name is unique;
  • obtain a registered address in Latvia;
  • define categories of business activities;
  • prepare all set of documents for submitting to the Registrar in Latvia, including certified copy of passport of each shareholder, address confirmation document of each shareholder and then complete the application form KR4 with signatures to be certified by a notary.

 

 

 

All incorporation procedures in Latvia takes 5 days. The total term of company formation in Latvia with opening a bank account is 3-4 weeks, provided that the bank does not request for additional documents as a part of an identity check. The process of opening a bank account starts after the company is incorporated.

A limited liability company is the most commonly used type for company formation in Latvia. It allows to avoid risks in relation to personal assets, as the shareholders are liable for the company’s debts within the limits of its share. The share capital of an LLC in Latvia is EUR 2,800. The share capital can be less if it has less than five individual shareholders and if it meets certain conditions provided by the Commercial Law.

Company formation in Latvia is a rapid and simple procedure. The term of company formation in Latvia set by the Registrar of Companies of Latvia is 5 days. For an urgent registration, it is possible to order express processing which will take only 1 business day.

Please feel free to contact us for registration services and registered address in Latvia, including Riga.

 

Company formation in Latvia is available for residents and non-residents. The set of necessary documents to be submitted for registration is similar for any citizens or residents. However, non-residents are required to translate documents into English with a notary certification, if such documents are in a foreign language.

It is not required to visit Latvia for company incorporation as all procedure is done online. Many clients prefer to use the services of representatives and agents in Latvia in order to avoid the bureaucratic registration process in Latvia. 

Ecompany.ltd provides company registration services in Latvia and supports clients on all stages of company formation and management.

 

Registrar of Companies Latvia is also known as Latvijas Republikas Uzņēmumu reģistrs. It is responsible for registration of companies, branches and representative offices. Registrar of Companies of Latvia provides other related services for entities registered in Latvia, including delivering copies of corporate documents, registering changes in corporate documents. Companies submit annual reports to the Registrar of Companies of Latvia and file applications for insolvency. The official website of the Registrar of Companies is translated into English and contains all useful information for companies. It is possible to find all forms of application, check current statutory fees and find other data. Certain public services are available online.

A shelf company in Latvia, also called a “blank company”, or “aged company”, is a company that is established by law firms and accountants. 

However, buying a ready-made company or shelf company is no longer practicable in Latvia, since online formation of a new company is much cheaper, faster and safer procedure. When establishing a new company in Latvia, it is possible to set it up based on your business needs. For instance, you are free to choose any company name, choose your preferred address, etc.

That’s said, if you are considering  starting your business in Latvia, then it is advisable to incorporate a new company.

In contrast to other jurisdictions, a company doing business outside of Latvia is not considered as an offshore company. So, it is not correct to refer to an offshore company formation services in Latvia. However, the low taxes in Latvia makes this country not less competitive as classical offshore jurisdictions.

Latvia has many tax and operational advantages that are not less competitive as classical offshore jurisdictions, such as:

  • nominal services in Latvia
  • low taxes in the EU
  • fully remote operations
  • rapid company formation in Latvia within 2-5 days

Ecompany.ltd provides online company formation services in Latvia. Our flexible company incorporation services in Latvia include:

  • Low registration fees
  • Nominal services, including registered address in Latvia
  • Accounting, tax and legal services
  • Online company formation in Latvia
  • Opening a bank account
  • VAT registration

To incorporate or purchase a company in Latvia or worldwide, please contact us for further details.

 

The cost of company incorporation in Latvia is Euro.

Online company formation on eCompany.ltd

  1. You can easily search whether your chosen company name is available for registration in Latvia. To check the name, please enter the company name in a search field under the top banner on this page and then click “find out”.
  2. If your chosen company name is available, you can start the process of company formation.
  3. At checkout, please fill in your personal information and account details for account registration on eCompany.ltd. You can add additional notes or information in your order.
  4. Complete your order with your preferred method of payment.
  5. Once your payment is processed, we will contact you about the necessary documents that we need to receive from you in order to prepare incorporation documents on your behalf.
  6. We will prepare the incorporation documents and submit them for company formation in Latvia.
  7. Once the company is incorporated in Latvia, we will send you a standard set of original corporate documents. Please make sure that you entered your correct mailing address.

Taxes in Latvia

The tax system in Latvia is simple. In practice companies incorporated in Latvia can easily manage all taxation issues online. Company taxes in Latvia are applied on the company’s worldwide income. Business taxes are paid in Latvia by Latvian companies, PEs and foreign residents operating in Latvia. Small businesses may enjoy reduced corporation tax rates in Latvia.

A company is qualified as a tax resident in Latvia if it is incorporated in Latvia or if it is a permanent establishment of a foreign company in Latvia.

Taxable period in Latvia is one calendar year. A company may choose other taxable period corresponding to its financial year.

Corporation tax deadlines depend on the company’s size. Small and medium sized companies file annual tax returns within four months after the end of the financial year. Large companies are subject to the corporate tax filing deadline of a period of seven months.

Corporate income tax rate in Latvia is 15%. The current tax rate for companies is levied on its worldwide income. Non-resident companies without permanent establishment in Latvia are subject to tax on their sourced income in Latvia. Permanent establishments operating in Latvia are subject to the same 15% company tax rate.

The 3% corporation tax rate applies to companies in Special Economic Zones being Liepaja Special Economic Zone, Rezekne Special Economic Zone, Ventspils Free Port, and Riga Free Port. 

The tax rate for small companies operating in Latvia is reduced to 9%. This small business tax rate applies to all taxable income.

The corporation tax rate for tax resident companies and PEs is 15% income tax. Small companies operating in Latvia are subject to a 9% tax rate. Since the rates of corporate tax are reviewed annually, please contact eCompany.ltd to get updated information.

The limited company tax in Latvia is currently 15% for medium and large companies and 9% for small companies.

The corporation tax computation is one calendar year. The taxable income is calculated on the basis of the preceding year.

Foreign companies are subject to corporation tax in Latvia on income derived in or from Latvia. The corporation tax rate is 15%.

All dividends are subject to corporate income tax in Latvia that is levied on all distributed profits. The Latvian tax on dividends is 15% of corporate income tax.

Foreign dividends to a Latvian company are subject to corporate income tax at the rate of 15% corporate income tax. Dividends from a Latvian limited company to a foreign legal entity may be exempt from taxation in accordance with a double taxation treaty.

There is no withholding tax on dividends in Latvia.

Interest income is exempt from tax liability in Latvia (except for interest payable to foreign entities from black list jurisdictions). In the latter case the tax rate on interest income is 15% in Latvia. Withholding tax on interest is exempt from tax liability in Latvia.

Royalties paid to abroad companies (excluding companies located in tax haven territory) are exempt from tax liability in Latvia.

Capital gains on the disposal of shares are exempt from corporate income tax. Tax on share dividends are not applied in Latvia. Gains from sale of shares in companies located in tax haven countries are subject to 15%.

Royalties paid to abroad companies (excluding companies located in tax haven territory) are exempt from tax liability in Latvia.

The general VAT rate in Latvia is 21%. Reduced rates in the amount of 12% and 5% apply to certain types of transactions. 0% applies to certain supplies, including medical services, rentals of apartments, banking and insurance services.

Small businesses may enjoy the reduced VAT rate of 12% on supply of medical staff and devices, baby food, textbook, accommodation services. 5% VAT rate applies on a supply of food. 

The VAT registered threshold in Latvia is nil. It is mandatory for all Latvian companies to get VAT registration numbers once they start selling. For foreign companies selling to Latvia by distance selling, the VAT threshold is €35,000 per annum.

All investment income is subject to taxation in Latvia. Investment is regarded as dividends. The tax rate on dividends is 15% in Latvia.

The income derived from the sale and assets gained as a result of the sale are qualified as capital gains. The capital gains tax should be paid for income derived from the sale of shares at the rate of 15% in Latvia.

Company Liquidation

As in other jurisdictions, a company in Latvia can be liquidated voluntary and involuntary.

A company registered in Latvia can be liquidated compulsory as requested by creditors or governmental institutions (court, State revenue service, Register of enterprises), if such company does not comply with legislation. Based on the request, forced liquidation of the company will be initiated.

In case of compulsory liquidation, a liquidator is appointed based on the court order. The liquidator is responsible for informing the official gazette regarding the new status of the company. During three months, the liquidator invites the creditors to state their claims. Further, the liquidator prepares balance sheet with company’s assets. All corporate, employment and other documents shall be sent to the State Archives. Based on the company’s assets, the liquidator shall satisfy creditor’s claims. The remaining assets are delivered to the shareholders. Finally, the company is excluded from the commercial register.

A company is liquidated voluntary based on the decision of shareholders or expiration of term specified in the articles of association of the company. In rare situations, shareholders may agree to establish a company for a certain period. A company may be terminated if it reached its aims specified in the articles of association.

The decision of the company liquidation is made during the general meeting. For the termination of activities at least 2/3 of the shareholders’ votes must be present at the meeting, if the charter does not provide for a greater number of votes. After that, shareholders appoint a liquidator who is responsible for notification of creditors through the official gazette and the Register of Enterprises about the new status of the company. Liquidator prepares balance sheet with company’s assets, submits all necessary reports to governmental authorities and recovers debts. The remaining assets are delivered to the shareholder.

All company documents, including corporate, employment, accounting and other documents shall be sent to the State Archives where the documents are kept for a certain amount of time. During the liquidation process, the company cannot engage in any commercial activity. After all debts are settled, the company is excluded from the commercial register.

Note: if a company ceased its business activities, the Register of Enterprises can exclude the company from the commercial register without special liquidation process. In this case, the government may hold all property of the company.

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