Latvia

Latvia is a parliamentary Republic, a Member State of the European Union since 2005, politically stable country with a multi-party democracy. Latvia restored its independence on 21st August 1991, before the date the republic was occupied by Soviet Union for fifty years. Population – 2 003 000. Latvia’s legal system is based on Civil Law.

Limited companies (LTD) incorporated under the Commercial Law can conduct business in any part of the world including Latvia.

 RateNotes
Corporate income tax0-20 %see below
Received dividends0 %*
Paid dividendscoefficient of 5%
Capital gains taxcorporate income tax
Interest receivedcorporate income tax
Interest paid0 %to corporate person
Royalty incomes corporate income tax
Royalties paid0 %to corporate person

*except for companies that do not pay corporate tax where companies are incorporated.

Corporate income tax 0%- if incomes invested in the company development, 20%(25%) – if decided dividend payment.

Employee requirements, taxes

LTD should pay one salary if doing business and the company’s turnover in a month is more than 2500 EUR(5 min salaries).

Minimum salary per month (gross)500 EUR430 EUR - 2020
Social insurance taxes, total:34.09 %35.09% - 2020
employer23.59 %24,09 % - 2020
employee10.50 %11 % - 2020
Personal income tax:
annual income less than 20 004 20 %
annual income 20 005- 62 80023 %
more than 62 80031 %
Untaxed minimum (max)300 EURsalary – 500 EUR
501-1800 - specialized
more than 1800- not applicable

Double tax treaties with 50 countries.

Advantages 

  • Member State of the EU
  • Corporate tax rate 0% if incomes invested in the company development
  • The company’s management does not have to be located in Latvia in order to receive the status of a resident
  • An LTD can be used as a holding company or for international trade

Disadvantages

  • Corporate tax of 20% (25%) if decided of dividend payment
  • Required to file monthly socialand income tax statements for employees and also corporate tax
  • Active companies are required to have at least one employee with minimum salary of 430 EUR
  • Company Register requires to file information about person with significant control (25%)
  • Annually required to file Financial Statement with the tax authorities
  • The consultation costs may be applied with 10 % tax
  • Withhold tax from payments in favour of low-tax or tax-free countries*

*from 17.11.2020 there are 12 low-tax or tax-free countries and territories in Latvia: Antgila, U.S. Guam, U.S. Samoa, U.S. Virgin Islands, Barbados, Fiji Republic, Palau Republic, Panama, Samoa Independent State, Seychelles, Trinidad and Tabago Republic, Republic of Vanuatu.

Please note that nominee structure is not possible

NameMust start or end with the words “Sabiedrība ar ierobežotu atbildību” or “SIA”
Share capitalThe minimum standard authorized capital is EUR 2800, required to be paid before a company is incorporated
ShareholdersA minimum of one Shareholder, corporate Shareholders are allowed. Required to sign application of a new company formation by Notary
DirectorAt least one Director must be present, physical person only, any nationality. Required to file a notarized signature of the Director with the Register
BeneficiaryInformation required to be filled with Register and info opened for third person
SecretaryIt is not mandatory to appoint a Secretary
Registered addressRequired
Annual reportingAnnual Financial Statements must be provided to the Tax Authorities

 

Company formation packages Request package prices

Timeframe

Incorporation of a new company 5 business days

Annual support (beginning with the second year) Request price

Annual financial statement – required

Accountancy services – required monthly


Required information from the client

Incorporation process is possible as soon as the Due Diligence procedure is completed. Please fill in and send us the Order form; immediately afterwards, we are going to send you the information on the document required within the boundaries of the Due Diligence procedure.

In case the Shareholder is a legal entity, it will also have to provide a document confirming the company’s status and the person authorized to sign documents on behalf of the company

1. Consult to determine the order. To choose a jurisdiction for a company we offer a consulting services:

  • via telephone +(371) 67280645
  • via e-mail: consult@bbp-net.com
  • via online question form found in the header Ask an expert
  • Navigation through our web site will help you to determine: benefits, prices and requirements in respective jurisdictio

2. Issue of invoice and settlement of order. Within one business day of filling in the online application form, you will receive an invoice via e-mail. You can pay the invoice using money transfer to the BBP bank account provided in the invoice or via Internet, using PayPal. We suggest using PayPal only in case the amount is less than 200 EUR.

ATTENTION! The invoice number should be written in the details of payment!

A payment acknowledgement will be sent to you as soon as we will receive the payment.

3. After we receive the required Due Diligence documents from you, we shall commence the incorporation or the preparation of the documents required in order to carry out the acquirement of a ready-made company.

4. Document delivery to the client. Documents are sent via international courier mail.

5. Further supporting services. We guarantee to inform, assist and provide you with all the necessary services for further support of the company.

Get acquainted with jurisdiction legislation free of charge!

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*Please note that we shall only provide one document for free. If you would like to receive more information please contact us!