Company Incorporation in Latvia
Latvia, capital RIGA, is a European country located on the eastern shore of the Baltic Sea. It is one of the three Baltic countries. The country is bordered by Lithuania to the south and Estonia in the north. Latvia has been part of the European Union since 1 May 2004.
Recommended activities in Latvia are:
- Intra-European Import/Export
- Road based transportation of goods
- Employment of persons
- Building / construction
The banking system in Latvia is reliable and offers optimal functioning.
What to remember …
Latvia is suitable for many activities. This destination will often meet a European business imperative or be useful as part of import/export transactions within the EU.
The corporation tax in Latvia is 15%.
21% VAT applies only to services performed or goods sold on site.
Book-keeping mus be done monthly by a commissioned accounting firm.
To avoid having to charge VAT on the services rendered and goods or products sold, you must be able to prove that these operations were not made in Latvia.
The formation of a company requires a number of essential elements listed below, they are systematically included in all incorporations to ensure proper operation.
Types of companies
The usual company form is the SIA, which is a company with limited capital liability.
The company must have a registered office in Latvia which is listed in correspondance and on letterheads and where mail can be received. In addition, an optional service of a virtual office with a custom phone number and switchboard is available.
Capital in Latvia is 1,250 LVL, Lat (or 1,700 €) of which 25% must be released at the company’s incorporation.
A multi-currency bank account will be opened for business with Internet access and a Visa or MasterCard ATM card.
The director must be European, however, a Nominee Director service providing additional discretion can be provided on a case-by-case, with the understanding that in Latvia the responsibility of the officer may be called in case of poor bookkeeping.
The Nominee-Shareholder service does not exist, this would require creating a Holding abroad to hold the shares.
To have a company within 24 hrs, the easiest way is to choose a Ready-made company from a list of names of existing companies created in advance to minimize delays. To create a custom company, it will take 25 days, plus mail delay.
Companies in Latvia are not often used as holding companies.
The company must be renewed each year after having paid its taxes and a revenuestamp, the domiciliation of the head office and the appointment of the Nominee Director should also be renewed.
Conditions for setting up a company
The final condition is that the activity is legal both in Latvia and in the country where this activity will be performed. The creation of an Offshore company should not and can not be used to legitimize an illegal activity.
Financial activities, banking, betting, online gambling, insurance, and other management activities require a license.