Register company in Latvia

Fionza Consultants provides comprehensive support for clients looking to register a company in Latvia. Our services encompass Latvia company registration, facilitating the establishment of corporate bank accounts, and managing accounting and tax compliance. Fionza Consultants is your all-in-one solution for legally launching your business in Latvia

Latvia

Company Registration – 3 Week
Local Director? – No
Bank Account Opening – 4 Weeks
Travel Required – No

Register company in Latvia: Introduction

Registering a company in Latvia becomes a hassle-free endeavor when you’re well-versed in the entire incorporation process. With Fionza Consultants as your guiding force, you can redirect your valuable time and resources towards more critical aspects.

Embracing a streamlined approach, our team of experts ensures a seamless journey throughout the entire company registration process in Latvia. Our ultimate objective is to have your Latvian business up and running within the prescribed timeframe.

Our comprehensive service package covers all your needs for company registration in Latvia:

Latvia Company Registration with the Register of Enterprises of the Republic of Latvia.
Provision of a Local Company Secretary and Registered Address.
Facilitation of Corporate Bank Account Opening.
Ongoing Annual Accounting and Tax Services.

How long to register company in Latvia and open corporate bank account?

Fionza Consultants boasts a team of seasoned experts dedicated to simplifying the process of registering your company in Latvia, offering a seamless and hassle-free procedure. We are committed to completing the Latvia company registration process within a swift 3-week timeframe.

Notably, the entire company formation process in Latvia, in collaboration with the Register of Enterprises of the Republic of Latvia, can be executed remotely. There’s no need for you to make the trip to Latvia during the registration process.

Within a mere 3 weeks, anticipate receiving crucial documents for your newly established company, including the Certificate of Incorporation, Memorandum of Association (MoA), and Articles of Association (AoA).

Once your company formation is successfully completed, Fionza Consultants steps in to facilitate the opening of a corporate bank account, either with a local Latvia bank or an international global institution, depending on your long-term business objectives. This banking process typically takes around 4 weeks to finalize for foreign clients.

Consequently, you can look forward to commencing operations and issuing invoices through your Latvian company within a reasonable 7-week timeframe, all thanks to Fionza Consultants.

For a comprehensive one-stop solution for those contemplating the establishment of a company in Latvia, rely on Fionza Consultants. Our services encompass Latvia company registration, registered agent services, provision of a registered address, and assistance with business bank account opening.

Can a foreigner register company in Latvia?

Latvia’s government offers a variety of business entity options for foreign investors looking to register a company in Latvia. Fionza Consultants specializes in guiding you through the necessary steps and requirements for launching your business in Latvia.

In Latvia, most companies typically require just a director and shareholder. Importantly, there are no restrictions based on residency or nationality for these roles in a Latvian company, and they can even be the same individual, making it entirely possible for the company to be wholly foreign-owned. However, it is essential to have a registered office in Latvia.

For Limited Liability Companies (LLCs) in Latvia, there is a minimum paid-up share capital requirement of EUR 2,800, with at least half of this amount needing to be paid before the company’s incorporation. On the other hand, branch companies or representative offices do not have a minimum paid-up share capital requirement.

All businesses in Latvia must submit an annual report to the State Revenue Service (SRS) of Latvia. However, only companies that surpass specific thresholds in terms of total assets or turnover are subject to mandatory statutory audits.

Latvia offers a range of business structures, each with its unique features. When choosing the most suitable entity type, it’s crucial to consider various factors such as personal liability protection, tax implications, management flexibility, and compliance requirements. Fionza Consultants, prior to engagement, will thoroughly assess your business and recommend the optimal business entity in Latvia. We take into account factors like your business activity, tax obligations, and the nationalities of shareholders and directors. Our expert consultants will also provide detailed information on the specific requirements associated with setting up these entities

Types of entities to consider when you register company in Latvia

Limited Liability Company (SIA) in Latvia

A Limited Liability Company (known as Sabiedrība ar ierobežotu atbildību or SIA in Latvian) is the most prevalent business entity in Latvia. It offers several advantages to business owners.

As an SIA is a distinct legal entity from its shareholders, they enjoy limited personal liability. Shareholders and directors are not personally responsible for the company’s debts and obligations beyond their invested capital.

To establish an SIA in Latvia, a minimum share capital of EUR 2,800 is required, with at least half of it deposited in a temporary bank account before incorporation. Remarkably, there is no requirement for a resident director, making it accessible for foreign entrepreneurs to register a company in Latvia.

Small business owners can opt for an SIA with reduced share capital requirements. To qualify, the company must have five or fewer individual shareholders, and all directors must also be shareholders. Reduced share capital can range from EUR 1 to EUR 2,800, with no resident director requirement.

Partnership in Latvia

A partnership in Latvia is formed when multiple co-owners decide to run a business together. It’s important to note that a partnership is not a separate legal entity, and each partner may be personally liable for the business’s debts and liabilities. Partners are taxed on their share of the partnership profits.

Latvia has two main types of partnerships: General Partnerships and Limited Partnerships. In a General Partnership, all partners have unlimited liability. In contrast, a Limited Partnership has general and limited partners. General partners are liable for all obligations, while limited partners are only liable up to their investment.

There is no minimum capital requirement for establishing a partnership in Latvia, and partners do not need to be Latvian residents or citizens.

Branch Company in Latvia

Foreign companies incorporated outside Latvia can establish branch companies locally. Branch companies in Latvia are subject to the same corporate tax rates and auditing requirements as Limited Liability Companies.

Notably, a Latvia branch is not considered a separate legal entity from the parent company, which means the parent company is liable for the branch’s debts and obligations. There’s no minimum paid-up share capital requirement for a branch company, and profits earned can be repatriated to the parent company without Withholding Tax.

Representative Office in Latvia

Foreign companies can also choose to establish a representative office in Latvia. Like branch companies, representative offices are not separate legal entities and cannot engage in income-generating business activities.

Representative offices are ideal for conducting market research and promoting the parent company’s activities in Latvia.

Joint Stock Company (AS) in Latvia

A Joint Stock Company, known as Akciju sabiedrība or AS in Latvian, is a versatile business structure in Latvia. It requires at least 1 director and 1 shareholder for incorporation, with no residency or nationality restrictions. The minimum equity capital needed is EUR 35,210, which must be in cash.

AS can be registered as private or public. Public AS has more stringent compliance measures and must be listed on NASDAQ OMX Riga or another European stock exchange. Shareholders and directors do not have residency requirements.

AS has legal liability for its entire property and operates through shareholder meetings, a board, and a council of shareholders, making it suitable for larger enterprises.

Incorporating in Latvia offers various business options, each with its unique advantages and requirements.

How to register company in Latvia?

Step 1: Choose the Ideal Business Structure for Company Registration in Latvia

Before embarking on the company formation process, it’s crucial to select the right business structure. Fionza Consultants will provide expert guidance based on your business structure and long-term objectives. The most common choice in Latvia is a Limited Liability Company.

Step 2: Verify Company Name Availability

Fionza Consultants will conduct a thorough search in the Enterprise Register to ensure the availability of your chosen company name. We’ll also ensure that your selected name doesn’t conflict with any trademarks registered in the Patent Office.

Step 3: Document Preparation and Submission for Latvia Company Registration

To initiate the incorporation of your Latvian company, you’ll need to provide a set of required Know Your Customer (KYC) documents. These documents include director names, company resolutions, and identification proofs. Additionally, you’ll need to furnish a bank statement demonstrating that you meet at least 50% of the minimum paid-up capital requirement of EUR 2800.

Based on the documents you provide, Fionza Consultants will prepare and notarize essential documents such as the Memorandum and Articles of Association, business plan, and other necessary incorporation papers. Once these documents are ready, we’ll facilitate the company registration process through Latvia’s Commercial Register’s e-service.

After successful company registration, Fionza Consultants will dispatch important documents, including the Certificate of Incorporation and Memorandum and Articles of Association, to your preferred address.

Step 4: Register for Taxation

Fionza Consultants will handle the registration of your company for Value-Added Tax (VAT) using the SRS Electronic Declaration System.

Step 5: Open a Corporate Bank Account

Depending on your business structure, the required documents may vary slightly. Fionza Consultants will assist in streamlining the documentation process and facilitate the opening of a corporate account with a reputable bank of your choice.

In most cases, directors and shareholders won’t need to travel to Latvia. However, if travel is necessary, we can arrange for a representative to accompany you to the bank meeting. Alternatively, our team can negotiate a conference call or request a waiver.

Once your corporate account is successfully opened, Fionza Consultants will send the internet banking token and access codes to your preferred address.

Choosing Fionza Consultants ensures a seamless and efficient process for registering your company in Latvia, with a focus on your specific business needs.

Why register company in Latvia?

Understanding the Business Landscape in Latvia Before Registering Your Company
Before you decide to register your company in Latvia, it’s crucial to gain insights into the business environment of the jurisdiction. This ensures that your newly established legal entity can operate safely and legally while aligning with your long-term business objectives.

Political Landscape in Latvia

Latvia’s democratic system is characterized by a balance of power between the parliament, state president, ministers, and the judiciary. Elections are held every 4 years and are generally perceived as fair and transparent.

However, it’s important to note that corruption remains a challenge in Latvia, with limited prosecution of public officeholders. Trust in politicians and the judicial system is relatively low. According to Transparency International’s 2020 Corruption Perception Index, Latvia ranks 42nd out of 180 countries, indicating an acceptable level of corruption.

The government formed in 2019 has taken steps to combat corruption through administrative reforms, aiming to enhance access to public services across the country.

Economic Environment

Latvia’s government has traditionally maintained a pro-business stance, given its status as a small and open economy heavily reliant on exports and imports. Being a member of the European Union (EU), Latvia provides easy access to the European market for companies established within its borders.

Latvia ranks 19th out of 190 countries in terms of ease of doing business, according to the 2020 Ease of Doing Business Index. Setting up a business in Latvia is streamlined and can be accomplished remotely.

The Latvian economy is dynamic and ranks among the fastest-growing within the EU. It boasts stability, low inflation rates, and a relatively small budget deficit. The economy is primarily privatized and highly competitive, with Small and Medium Enterprises (SMEs) playing a significant role.

Social Considerations

Latvia is known for its safety, with relatively low overall crime rates over the past decade. However, certain regions, such as Riga, may pose a higher risk of thefts and scams, especially during the tourist-heavy summer season.

While Latvian is the official language, a large portion of the population is bilingual, proficient in both English and Russian. Latvia ranks 28th out of 100 jurisdictions in terms of English proficiency, making it highly accessible for English-speaking individuals and businesses.

Technological Advancements

Latvia’s Information and Communications Technology (ICT) sector is rapidly expanding, and this trend is expected to continue. High-tech exports accounted for 17.24% of Latvia’s exports in 2019, according to the World Bank.

Government policies aimed at fostering new startups have contributed to the growth of companies in the ICT sector, encompassing computer services, hardware, software, and telecommunication services. E-government initiatives have created additional business opportunities, providing online government services.

Environmental Commitment

Latvia has allocated approximately 1.5% of total government expenditure toward research and enhancing environmental quality, particularly in areas like waste treatment facilities, disposal methods, and water resource protection.

The 2019 OECD Environmental Performance Review recognizes Latvia’s efforts in reducing greenhouse gas emissions, improving energy efficiency, and enhancing household access to water and waste facilities. However, there is room for improvement, particularly in sustainable infrastructure and waste management.

Latvia has outlined a Sustainable Development Strategy until 2030, focusing on effective and sustainable utilization of cultural, economic, natural, social, and human capital.

Understanding these aspects of Latvia’s business landscape is essential as you embark on the journey of registering and operating your company in this dynamic European country.

Looking to register company in Latvia?

Consulting Experts for Latvia Company Registration

Before proceeding with the registration of your company in Latvia, it’s crucial to seek guidance from seasoned professionals. At Fionza Consultants, our team of experts stands ready to provide you with precise and professional advice. Many international clients opt for a complimentary consultation with Fionza Consultants to make informed decisions.

FAQ

What is the best business in Latvia?

Some of the biggest industries in Latvia include the chemical and IT industry.

Latvia is known historically as a manufacturing hub for chemicals, pharmaceutical products and cosmetics, with the chemical industry being one of the largest industries in Latvia. With a highly educated population and ongoing research and development in the chemical, pharmaceutical and biotechnological sector, the chemical industry in Latvia is poised to achieve high levels of innovation and productivity. As such, it may be profitable to set up a company in the chemical and pharmaceutical industry.

Another important industry in Latvia is the IT industry. Equipped with a pool of skilled IT professionals, well-developed communications and transport infrastructure and knowledge of the EU and Russian market, Latvia is an ideal place to set up an IT company. Local government policies also promote business usage of electronic services and IT solutions to improve output productivity. This means that there are a lot of business opportunities for companies providing IT services in Latvia.

The environment and renewable energy industry is also an industry with great potential. Latvia’s past experience with renewable energy makes it an ideal location for green energy projects. Since Latvia is aiming to improve energy efficiency and expand its network of sustainable infrastructure, companies in this industry will have sufficient business opportunities to capitalise on.

How much does it cost to start a business in Latvia?

The minimum capital requirement to set up a limited liability company is EUR 2,800. At least half of the capital must be stored and deposited before company incorporation.

As for Fionza Consultants’ engagement fees, this will depend on the exact services required from Fionza Consultants. Our fees are inclusive of government fees and all fees will be clearly stated in our engagement letter prior to the start of the engagement. Fionza Consultants believes in transparency with our valued clients and there are no hidden fees.

Do I need a company secretary to incorporate a company in Latvia?

No, a company secretary is not necessary to incorporate in Latvia. However, Fionza Consultants can provide you with a local secretary to assist in the annual tax filing and accounting requirements.

Do I need a resident director to incorporate a company in Latvia?

No, you do not need a resident director to do so. To incorporate in Latvia, you will need 1 director, 1 shareholder and a legal address in Latvia. There is no residence or nationality requirements for the director, and the director and shareholder can be the same person.

Do companies in Latvia need to file an annual report?

Yes, the legal regulation on Annual Financial Statements and Consolidated Financial Statements mandates that all companies in Latvia must file an annual report. Shareholders must hold the annual meeting to approve the annual report. The annual report is to be filed with the State Revenue Service (SRS). There is no legal requirement for the annual report to be audited unless it meets a certain threshold.

Is an audit required for companies in Latvia?

No, a statutory audit is only required if at two of the three following conditions are met for two consecutive years:

- The total assets in the balance sheet is greater than EUR 800,000.

- The net revenue of the company is greater than EUR 1,600,000.

- The company has an average of 50 employees in the financial year.

Parent companies and publicly listed companies are also subjected to auditing requirements.

What are the documents needed for Latvia company incorporation?

To incorporate a business in Latvia, business owners must prepare the following documents:

- KR4 Application form

- Memorandum and Articles of Association

- Bank statement

- Appraisal report

- Shareholders’ register

- Consent of Board members

- Consent of council members, if applicable

- Consent of property owner of the legal address of the company if the property is not owned by the company or a Board member

These documents must be submitted to the Register of Enterprises of the Republic of Latvia during company registration.

What is micro-enterprise tax?

Previously, new businesses can apply for micro-enterprise status if they meet certain requirements. A micro business can choose to pay a lower corporate income tax, also known as the micro-enterprise tax.

As of January 2021, newly incorporated companies can no longer acquire micro-enterprise status. Hence, it is no longer possible to apply for micro-enterprise tax. Existing limited liability companies with micro-enterprise status will have their status withdrawn within 1 year.

What are the benefits of setting up a business in Latvia?

Latvia has a well-developed transport and communication infrastructure that facilitates the efficient transport of goods and services within the country. Currently, there are four Special Economic Zones (SEZs) in Latvia that offer various tax incentives such as corporate tax rebates and exemption from VAT tax for specific goods and services.

As an EU member, companies in Latvia can gain easy access to the large European market. With more than one-third of its population speaking Russian, Latvia also has close trading relationship with Russia.

Furthermore, it is relatively easy to do business in Latvia. Latvia is ranked the 19^th easiest jurisdiction to do business according to the 2020 Ease of Doing Business Index.

Register company in Latvia