Company registration in Latvia

Any person (or company), regardless of their jurisdiction, can register a company in Latvia.
To register a company, it is necessary to come up with a unique (within the framework of the Latvian register) company name and have / rent a legal address in Latvia to receive correspondence.
The minimal authorized capital for a Latvian company is 2800 euros, the registration period takes from 1 to 3 working days.
The main feature (advantage) of Latvian companies is 0% corporate tax rate on reinvested profit.
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The process of registration of the company (firm) in Latvia

  1. Registration process: can be carried out remotely, and takes 1 to 3 days
  2. Certification of documents: apostilization for the countries participating in the Hague Convention, consular legalization for the rest (through the Ministry of Foreign Affairs)
  3. Register: an open register where information about the founders, equity capital, Members of the Board and annual financial statements are available
  4. Reporting: Accountant is Required, mandatory reporting in the Electronic Declaration System (EDS), in Latvian
  5. Audit: at the end of the year, if 2 of 3 criteria are met, it is necessary to undergo an audit: the balance sheet total exceeds 400 thousand euros, net turnover exceeds 800 thousand euros, the number of employees is more than 25
  6. Certificate of tax residency: is issued without additional tests and conditions
  7. VAT and EORI numbers are awarded after passing a compliance check in the SRS. Can be carried out by proxy

How to open a company in Latvia?

In general, when registering a company in Latvia, it is necessary to understand that the full registration process includes work with three instances – the Register of Enterprises, the State Revenue Service (SRS), and the bank.
In order to open a company in Latvia and to obtain a certificate of tax residency, it is enough to apply to the Register of Enterprises.
You can get VAT and EORI number, register the type of economic activity, and receive the access to the Electronic Declaration System in the SRS.
You can open a temporary Bank account to pay for the equity capital and a permanent current account in one of the many Latvian banks.

The company registered in Latvia in the sense of international business is onshore company, and has all the relevant advantages:

  1. Agreement for avoidance of double taxation (the list of 60 countries, 10 countries of the CIS);
  2. Mandatory tax and financial reporting;
  3. Availability of statutory information and annual reports;
  4. Unblemished reputation, prestige of business, international trust and detachment from the concept of offshore zone

Tax rates for legal entities

  1. Income tax rate (income tax) 0% – no tax on reinvested profits
  2. VAT rate is 21%
  3. The tax rate on real estate is 1,5%

Tax rates for natural persons

  1. Personal income tax rate is 23%
  2. Dividends are 25 %
  3. Capital gain is 15%

The rate of payroll taxes

  1. Social tax is 34.09%
  2. Income tax is 23%
Some facts about Latvia
  1. Beneficial geographical location
  2. Full member of the EU (2004), Schengen (2007), WTO (1999)
  3. Riga is the largest city in the Baltic States
  4. 3 major ports (Riga, Ventspils and Liepaja) with FEZ status
  5. The official language is Latvian
  6. The national currency is the Euro

Latvia is widely known, first, as a well-developed regional banking center, second, as a trade corridor connecting the East with the West, and since 2013, considering the innovations in the tax legislation, favourable for international business, as a holding and financial center. Therefore, the most effective company in Latvia can be used:

  1. For trade between European countries and the CIS countries;
  2. As a holding and financial center (there are no restrictions on the share of participation, term of ownership and type of activity).

The company in Latvia has the status of a prestigious onshore company and plays a significant role in the international tax planning due to a big list of double taxation agreements (60 countries, including 12 CIS countries).

Facts about company registration in Latvia

  1. The minimum registered capital is 2800 euros. Nevertheless, it is possible to open a company for 1 Euro.
  2. The founders are natural persons or legal entities, without restrictions on the jurisdiction of the owners.

The advantages of the Latvian company include:

  1. Low cost of registration and administration of the company;
  2. The lack of restrictions on the jurisdiction of the owners;
  3. Stability of the banking system and 3 languages of operating the business (LV, ENG, RU);
  4. The possibility of obtaining a residence permit when investing in the capital of the enterprise.

In Latvia, according to the Law “On Taxes and Duties”, there are 15 types of taxes. The payers are persons who carry out the business activities independently.
Working in the internal territory of Latvia, a taxpayer may not be registered as a VAT payer if the total value of the taxable goods delivered and services provided in the previous 12-month period did not exceed 50 000 euros. After exceeding this threshold, the person is obliged to register.

In Latvia, according to the Law “On Taxes and Duties”, there are 15 types of taxes. The payers are persons who carry out the business activities independently.
Working in the internal territory of Latvia, a taxpayer may not be registered as a VAT payer if the total value of the taxable goods delivered and services provided in the previous 12-month period did not exceed 50 000 euros. After exceeding this threshold, the person is obliged to register.

The person is also obliged to register in the case of regular import of goods in excess of 10,000 euros. VAT registration in Latvia is carried out in the SRS within 10 working days. Possible periods of taxation: a month1 or a quarter2 . VAT Declaration must be submitted electronically (in the Electronic Declaration System) within 20 days after the end of the taxation period.

The price may vary according to the wishes and needs of the customer. Do not hesitate to ask a question.

For owners of Latvian companies we offer comprehensive business accounting services. Read more here.
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