Latvia Company Formation

• Limited Liability Company (SIA): The most common type of company, requiring at least one shareholder and one director. Liability is limited to the amount of capital invested.
• Public Limited Company (AS): Suitable for larger businesses that wish to raise capital through public offerings. Requires at least two shareholders and directors.
• Branch Office: A foreign company’s extension in Latvia, operating under the name of the parent company.
• Representative Office: A non-revenue generating office for activities such as market research and business promotion.

For a Limited Liability Company (SIA), the minimum capital requirement is 2,800 EUR. For a Public Limited Company (AS), the minimum capital requirement is 35,000 EUR.

Yes, foreigners can fully own and control a Latvian company. There are no specific restrictions on foreign ownership for most sectors.

• Choose a Company Name: Ensure the name is unique and complies with Latvian regulations.
• Draft Articles of Association: Prepare the Articles of Association, detailing the company’s structure and operations.
• Register with the Register of Enterprises: Submit required documents, including the Articles of Association, proof of address, and identification of shareholders and directors.
• Obtain a Company Code and VAT Registration: After registration, obtain a company code and register for VAT if the annual turnover exceeds 40,000 EUR.
• Open a Bank Account: Open a corporate bank account with required documents.
• Obtain Licenses and Permits: Apply for any necessary sector-specific licenses or permits.
• Register for Social Security: Register with the State Social Insurance Agency (VSAA) if you plan to hire employees.

• Corporate Income Tax: The standard rate is 20% on distributed profits. Reinvested profits are not subject to tax, effectively allowing a 0% tax rate on retained earnings.
• Value Added Tax (VAT): The standard rate is 21%. Reduced rates or exemptions may apply to certain goods and services.
• Personal Income Tax: Rates are progressive, ranging from 20% to 31% based on income levels.
• Social Security Contributions: Employers must contribute to social security for their employees.

• Annual Financial Statements: Companies must prepare and submit annual financial statements to the Register of Enterprises. Audits are required for larger companies.
• Tax Filings: Corporate income tax returns must be filed annually. VAT returns are typically filed monthly or quarterly.
• Annual Report: An annual report detailing company activities and financial performance must be submitted.

Yes, a Latvian company must have a registered office address in Latvia for official correspondence.

A Latvian Limited Liability Company requires at least one director and one shareholder. Directors can be non-residents, but at least one director must be a resident of Latvia or an EU/EEA country

Foreign investment is generally unrestricted. However, certain sectors may have specific regulations or require special licenses.

The registration process typically takes 1-2 weeks if all documents are in order. The timeline can vary depending on the complexity of the business and the completeness of the application.

Yes, you can open a corporate bank account in Latvia. You will need to provide the company’s registration documents, identification of the directors, and possibly a board resolution.

Depending on your business activities, you may need sector-specific licenses or permits. For example, businesses in finance, pharmaceuticals, or food and beverage sectors often require additional approvals.

The Investment and Development Agency of Latvia (LIAA) provides support to foreign investors, including information on incentives, funding programs, and guidance through the setup process.

Latvia offers a 0% corporate income tax rate on reinvested profits. There may also be regional incentives or grants available for specific projects.

When hiring employees, you must comply with Latvian labor laws, including providing written employment contracts, adhering to minimum wage requirements, and making social security contributions.