Company Formation in Latvia

Company Formation in Latvia

Company formation in Latvia is simple as our legal team prepares and takes care of all the documentation for you to start business in Latvia quickly. Our Riga office provides a wide range of corporate services tailored to fit your needs. We can provide you with a turnkey solution with all necessary business services.

How we can support you in starting business in Latvia:

Setting up a new limited liability company, including new shelf companies ready for business

VAT registration, including on-going accounting&payroll and reporting for compliance

Registered office address, registered agent and local representative service, bank account opening

The most time and cost efficient approach to register a company is to purchase a new shelf company, which can be done fully remotely with no travel needed. The alternative founding process by oneself can be a challenge to non-residents due to various requirements (e.g. share capital payment). Hence in most cases, non-residents of Latvia opt for a new or aged shelf company to avoid bureaucracy as we have already taken care of all the preparations and requirements. However, we do assist with new incorporations as well and we will help you to choose the best approach according to your situation and objectives. Pricing for company formation in Latvia starts from 980 EUR, for more information contact us for a free case evaluation and a detailed price quote »

Company in Latvia

We'll get you started in Latvia!

We have helped hundreds of businesses to set up in Latvia. We offer time and cost efficient remote setup packages with no travel needed. Our pricing for company formation in Latvia starts from 980 euros.

Priced from 980 euros
Remote setup in 2 to 5 days
New shelf companies available
VAT active companies available
Full range of corporate services

Limited Liability Company in Latvia

The Latvian limited liability company (Sabiedriba ar ierobezotu atbildibu or SIA in Latvian) is the most common form of business as its shareholders have no personal proprietary liability for the company’s obligations. Our new limited liability shelf companies are registered in the Commercial Registry with an active registration number and no previous activity.

Our new Latvian shelf companies come with our 100% clean balance sheet guarantee and optionally with the full share capital payment of 2800 EUR pre-registered, hence there is no need for separate share capital transfers. Alternatively we can also incorporate a new company as tailor-made for your project. There are no restrictions on the number or the nationality of the shareholder(s) and board member(s). Further, you can also choose your preferred business name for the company.

The Latvian company setup can be carried out remotely with a Power Of Attorney (PoA), digitally with an electronic-signature (applicable for a number of European Union ID card holders, inc. Estonian e-Residents) or by scheduling a notary appointment in Riga or your home country. Depending on the project we propose the most optimal solution. We prepare the legal documentation and submit all applications – we only require the basic information from your side to fill and submit the documents. After the Latvian Commercial Registry has processed all changes we forward the full legal documentation to you. It usually takes 2-5 business days for the registry to update their database to show the new shareholder(s), board member(s) and company information.

What are the steps?

Step 1: Get in touch for consultation
Let us know of your target objectives and we propose the best solution for your consideration. Preliminary consultation and detailed price quotes are free of charge.

Step 2: We take care of everything
We collect and prepare all legal documentation and forward for your confirmation and signatures. As an option we offer full remote service, no travel is needed for the company formation in Latvia.

Step 3: Start business in Latvia
We take care of all applications and set up any corporate services needed. We notify you when the process is finalized and when your company in Latvia is ready for business.

Corporate services in Latvia

We provide a full range of corporate services in Latvia including company formations, VAT registrations, legal and tax advisory, virtual registered office, accounting&payroll, consultation in joining with trade unions, licensing and bank account opening support. Corporate secretarial services on request.

Our virtual office service is a flexible solution for companies who do not need a physical office in Latvia. Our legal address in Riga will be used for registering with the Commercial Registry and as the administrative address for the company to receive postage. It is important to note that Latvia has quite strict requirements for the legal address including special contract to be submitted to the registry, we take care of all requirements. The postage sent to your company will be forwarded to you by e-mail (scanned copy) or by regular mail on request. We can also set up individual local telephone and fax numbers as well as a local domain name with web hosting for your company.

Our accounting department can take care of all of your Latvian company bookkeeping, as well as consult about financial and tax questions. The monthly cost of bookkeeping depends on the company profile, for example on the number of transactions and payroll calculations. We can also provide the VAT registration form and assistance with its completion. Financial statements have to be submitted annually while VAT returns and social tax declarations have to be submitted monthly.

We work with several banks (e.g. Citadele and BlueOrange) to ensure the most time efficient opening of a business bank account for your company in Latvia. To set up the account, a board member has to be present for a face to face meeting during the first application stage. The payment card and online banking security token are received in the second stage. Our team member can be appointed to receive these on your behalf and they will then be forwarded to you. Our compliance team will consult on choosing the best bank for your business and provide support through the account opening process.

It is also possible to open a fully functioning business bank account with an individual IBAN account number and with a VISA payment card for your company in Latvia, fully remotely over the internet and no visit required. We have covered this option in our Knowledge Center: Online bank account with IBAN and payment card

A limited review is required for small undertakings which on their balance sheet dates (for two consecutive years) exceed at least two of the three following criteria:

  • Balance sheet total of 400 000 – 800 000 euros
  • Net turnover of 800 000 – 1 600 000 euros
  • Average number of 25 – 50 employees during the financial year

* Limited review of the annual statement is a review engagement carried out by sworn auditor or commercial company of sworn auditors in accordance with the Audit Services Law in respect of the data indicated in the financial statement and information included, including the conformity of the enterprise income tax amounts. In order to examine the conformity of the undertaking’s income tax amounts the Latvian Association of Sworn Auditors has adopted specific national regulation.

The statutory audit is required for small undertakings which on their balance sheet dates (for two consecutive years) exceed at least two of the three following criteria:

  • Balance sheet total of 800 000 euros and more
  • Net turnover of 1 600 000 euros and more
  • Average number of 50 employees during the financial year

Further information can be found at Latvian Finance Ministry website.

Taxation basics in Latvia

The Latvian corporate tax rate on reinvested profit is 0%, i.e. all undistributed corporate profits are tax exempt. The income tax at a rate of 20% is charged on gross dividends. The general VAT rate is 21%.

Latvian corporate profits are not taxed (tax rate 0%) until the profits are distributed as dividends. In other words, all undistributed corporate profits are tax-exempt. This exemption covers both active (e.g. trading) and passive (e.g. dividends, interest, royalties) types of income, as well as capital gains from sales of all types of assets, including shares, securities, and immovable property.

Latvia levies a corporate withholding tax only on profits that are distributed as dividends, share buybacks, capital reductions, liquidation proceeds or deemed profit distributions. Distributed profits are generally subject to the 20% CIT at 20/80 of the net amount of profit distribution. From the Latvian perspective, this tax is considered a CIT and not a withholding tax (WHT), so the tax rate is not affected by an applicable tax treaty.

Standard VAT rate (in Latvian pievienotas vertibas nodoklis, PVN) is 21% and applies to all supplies of goods and services not qualifying for a reduced rate. Lower rates of VAT are applied to particular goods and services – 12% (food products for infants; pharmaceutical products; medical products for disabled persons; domestic passenger transport; books (excluding e-books); newspaper and periodicals; hotel accommodation; district heating) or 0% (e.g. export operations), as well as exemption from VAT (e.g., financial services, insurance, education, public health and others). It is required to register with the Tax and Customs Board as a VAT payer if the annual taxable turnover exceeds 40 000 EUR for domestic business. The distance sales threshold for Latvia is 35 000 EUR.

Employers registered in Latvia (including permanent establishments of the foreign entities) must pay social tax on all payments made to employees. The standard rate of social security contributions is 35.09%, from which 11% is the employee’s part and 24.09% is the employer’s part. Minimum wage in Latvia is 430 EUR/month as of 2020 and the requirement is applied if monthly net turnover exceeds 2150 EUR, excluding the first year of registration.

Frequently Asked Questions

Below we have included the frequently asked questions for company formation and corporate services in Latvia and the appropriate answers.

What documentation is needed?

In order to register and process your order we ask for you your passport scan, residential address (w. utility bill) and contact details.

How long does it take?

In Latvia the official processing time is 5 business days from the submission of the documentation. However, it is possible to request express processing to reduce the timing to 1 business day.

Do I have to come to Latvia?

The company setup procedures can be processed fully remotely with travel to Latvia not required. However if you prefer we can also schedule a notary meeting in Riga for onsite service.

What is a micro-tax company?

The Latvian Micro-business Tax (MBT) Act gives existing and newly-formed businesses the opportunity of acquiring micro-business status and registering if they meet the following criteria:

  • The shareholders are individuals.
  • The turnover does not exceed EUR 40 000 in a calendar year.
  • The number of employees does not exceed five at any time.
  • Members of the board are concurrently employees of the MBT payer.
  • Remuneration of each MBT payer employee does not exceed EUR 720 per month.

The MBT tax rate is 15%. The standard MBT rate is based on a turnover up to EUR 40 000, and covers payroll taxes, business risk duties, and CIT.

What if I am not from the EU?

Latvia does not put forward any restrictions on the nationality or residency for company shareholders and/or management board members, hence there is no problem.

Can I register a branch for my company?

Yes, we support with both branch and subsidiary setups for corporate shareholders.

How much does it cost?

Our pricing for both new company formation and new shelf companies in Latvia starts at 980 EUR. The final cost of your project will depend on further services required such as local registered office address, VAT registration, remote service package or similar. Also the annual costs will depend on the list of required services. We would be glad to provide a detailed quote specific to your project.

Do I need registered office address?

Having a local registered office address is mandatory for every Latvian company. The legal address will be shown in the commercial registry and the official letters addressed to the company will be sent to this address. We provide a virtual registered office address as a service and forward the postage received as scanned copies to your e-mail.

Can I choose the company name?

Yes, you can choose the company business name. It is subject to registry availability. You may check availability for the name here: https://www.lursoft.lv

How do I open the bank account?

There is no shortage of international and local banks in Latvia and banking systems are highly advanced. We can open the bank account for your company, but it is not possible to transfer the bank account access by proxy or by Power of Attorney, hence a face to face meeting is required at the bank. We provide a full service for on-site bank account opening, inc. assistance with scheduling the meetings and accompanying you to the bank. In addition, an alternative solution for a quick start it is also possible to open with a fintech bank in the European Union which can be done online with no visit needed and then proceed to opening with a local traditional bank in Latvia in later steps.

What about reporting requirements?

Irrespective of size, the Latvian limited company has to file annual accounts with the commercial registry once a year. Small companies are exempted from the requirement of appointing an auditor. VAT returns and social tax declarations have to be submitted monthly. Our accounting department can take care of all reporting requirements on your behalf.

How do I get started?

In the first step please let us know of your objectives for setting up a company in Latvia. In the second step we propose the best solution with a step-by-step overview and a detailed price quote for company formation in Latvia. In the third step we take care of all legal documentation and applications.

Questions? Interested in starting business in Latvia?

Questions regarding company registration in Latvia will be answered promptly by contacting us through the contact form below. If you would like to receive an overview of procedures and pricing break-down for your project we kindly ask to include preliminary information, for example how many participants will be in the company structure and which country residency they hold. Our country manager will respond shortly with more information to address your case including detailed procedures, timing and pricing break-down.

    Contact details

    Our office in Latvia is located in central Riga. Please schedule an appointment beforehand to be connected with our country manager.

    Call our head office at +372.50.43.245

    E-mail us at info@maxcorp.eu

    Riga office address:
    Aspazijas bulvāris 20, LV-1050 Riga, Latvia