Latvia is a well-known European jurisdiction, financial centre of Eastern Europe, offers convenient taxation for trading and holding companies. Corporate tax rate is fixed at 15%, one of the lowest in the EU.
Latvia is a country in the Baltic region of Northern Europe, is a multi-lingual society where all three Latvian, Russian and English languages are commonly spoken and professionals are adept at working with both Western and Eastern business cultures. A company in Latvia is well positioned to be an effective European intermediary for trade between Western and Eastern, “Russian- speaking” countries.
Latvia is a member of the World Trade Organisation (1999) and the European Union (2004). On 1 January 2014, the Euro became the country’s currency, superseding the Lats.
Since January 2013 Latvian companies became even more attractive for foreign clients, thus making them a top choice for tax optimization in Europe. Foreign investment is rising strongly and Latvian authorities have taken steps to streamline the regulations governing company formation.
Double taxation treaty with more than 50 countries all over the world, including EU countries, Switzerland, Norway, Russia, Israel, China, USA, Canada and many others.
As a part of EU, Latvian companies have European VAT number enabling to trade both with EU and non-EU companies VAT free.
The main types of company in Latvia
There are four main kinds of business entity for foreign investors, and they are as follows:
Limited Liability Company (SIA)
Joint Stock Company (A/S)
SIA Limited Liability Company
• The most common form of a business presence in Latvia
• Minimum share capital is approximately €3,000, at least half to be paid up
• Minimum number of directors is one
• No restrictions on foreign shareholders
• Accounts to be maintained in line with statutory requirements
A/S Joint Stock Company
• Popular format for larger companies that wish to raise public capital
• Minimum share capital is approximately €35,000 which must be fully paid up before registration
• Two-tier system comprising management and supervisory boards
• Accounts to be audited and filed with authorities
• Foreign-owned branch taxed at same rate as Latvian company
• Reporting and audit requirements are same as for Latvian companies
• Profits can be repatriated without withholding tax
• Dividends transferred abroad are subject to 10% withholding tax
• Certified translations of “Mother” company registration documents must be supplied
• Representative offices are not allowed to trade or do business
• They are only permitted to advertise and promote their company
• Regarded as an effective low-cost means of establishing a presence
Latvia’s banking system is well advanced, certainly by Baltic standards and offers all the facilities that are likely to be required by international investors. Few of the local banks are well established internationally, however, and we recommend that you take specialist advice on opening a bank account. We will be happy to help you with this.
Company Bureau can assist you in setting up a company in Latvia, as well as a whole range of professional services which include:
• VAT registration
• Registered/virtual office services
• Bank account introduction
• Accounting/payroll services
• Licencing requirements
For more information or to incorporate a Latvian company, please don’t hesitate to contact Company Bureau. We can assist you to incorporate a company in Latvia in the quickest possible timeframe.
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