Company Registration in Latvia - Business Starting & Setup

Latvia offers foreign entrepreneurs favorable conditions for conducting business in the EU, combining a stable legal system, reasonable taxation, and access to the common European market. As an EU member state, the country provides a straightforward company registration process, the ability to obtain a European VAT number, and seamless trade opportunities. The fixed corporate income tax rate of 20% applies only to distributed profits (dividends), allowing businesses to manage their finances flexibly.

Latvia's residency-by-investment programs, high standard of living, and security make it particularly attractive. Entrepreneurs benefit not only from a business-friendly environment but also from the opportunity to legally reside in a country with European standards of education and healthcare. These factors position Latvia as a strategic choice for international businesses looking to access EU markets.

Latvia's legal framework for commercial activities is based on several key legislative acts. The cornerstone is the Commercial Law (adopted in 1990 with subsequent amendments), which comprehensively regulates all aspects of business entities, including their formation, reorganization, and liquidation.

Anti-money laundering (AML) requirements are governed by the AML Law, mandating disclosure of ultimate beneficial owners (UBOs) and due diligence procedures. The Enterprise Register Law establishes rules for registering legal entities and maintaining up-to-date corporate records.

Latvia's tax regime balances EU compliance with business-friendly policies. The Corporate Income Tax Law imposes a 20% tax solely on distributed profits (dividends or other profit distributions), enabling tax-efficient reinvestment.

VAT applies at:

- 21% (standard rate)

- 12% or 5% (reduced rates for specific goods/services)

- 0% for exports

Businesses with annual turnover exceeding €40,000 must register for VAT.

Personal income tax uses progressive rates:

- 20% (income up to €62,800/year)

- 23% (income above this threshold)

Non-residents are taxed only on Latvian-sourced income.

Latvia has double taxation treaties with 60+ countries (including the US, China, and EU states), reducing tax burdens for cross-border operations.

Other taxes:

- Property tax (up to 3% of cadastral value)

- Excise duties (fuel, alcohol, tobacco)

- EU customs tariffs

Small businesses may qualify for simplified regimes (e.g., 9% turnover tax for micro-enterprises).

Latvian legislation allows establishing of the following business entities:

• Limited liability company (Sabiedrība ar ierobežoto atbildību (SIA));
• Joint stock company (Akciju sabiedrība (AS));
• Sole proprietor (Individuālais komersants (IK));
• Farms and fisheries (Zemnieku, zvejnieku saimniecības (ZS));
• Personal society (Personalsabiedrība (PS));
• Cooperative (Kooperatīvi)

The most popular form in Latvia is SIA, since it is the most convenient form for any type of business.

The limited liability company (SIA) represents the most prevalent corporate form, particularly favored by foreign investors due to its nominal minimum share capital requirement of just €1 and limited liability protection for shareholders. An SIA may be established by a single shareholder, with no residency requirements imposed on directors, rendering this structure exceptionally suitable for international business operations.

For larger commercial enterprises, the joint-stock company (AS) constitutes the appropriate vehicle, mandating substantial share capital of €25,000 minimum and featuring a complex governance structure requiring supervisory board oversight. While AS entities benefit from public listing capabilities, they simultaneously become subject to enhanced financial reporting obligations and mandatory audit requirements.

Sole proprietorships (IK) provide simplified business registration without share capital requirements, though proprietors assume unlimited personal liability for business obligations. Agricultural and fishing enterprises (ZS) qualify for specialized tax incentives and state support programs, contingent upon verification of primary economic activity.

General partnerships (PS) constitute unincorporated associations of natural persons engaged in joint commercial activities, with all partners bearing joint and several liability. Cooperative societies, requiring minimum five members, operate on democratic voting principles primarily to serve members' needs while accessing government subsidy programs.

The selection of optimal legal structure depends fundamentally on projected operational scale, number of founders, desired liability protection levels, and business sector specifics. Latvian legislation affords entrepreneurs considerable flexibility in choosing organizational formats aligned with commercial objectives and development strategies. The SIA remains the predominant choice for most businesses given its universal applicability.

Certain commercial activities in Latvia require specific licensing or permits, regulated through sector-specific legislation. The principal regulated sectors encompass: financial services (banking/payment systems), insurance/pension provision, gambling operations, pharmaceutical/medical services, transportation/logistics, alcohol/tobacco retail, telecommunications, and educational services.

The licensing procedure typically involves:

1) Submission of applications to competent regulatory authorities

2) Provision of corporate documentation, personnel qualifications, and business plans

3) Payment of statutory fees

4) Comprehensive compliance verification

Processing timelines range from 1-6 months depending on license complexity, with financial service providers particularly subject to capital adequacy requirements. Special regulatory attention applies to cryptocurrency and blockchain-related activities, incorporating stringent AML/CFT protocols.

License holders must maintain ongoing regulatory compliance through periodic reporting, with violations potentially resulting in administrative penalties or license revocation.

According to Latvian legislation, the following restrictions apply to company names:

• Company name should not be identical with the existing names;
• It should not be confusing;
• Company name can contain letters, figures and punctuation marks;
• Company name should end with the abbreviation SIA;
• It is not required to have a name in Latvian, but it is compulsory to use Latin letters.
• Offensive words are prohibited;
• Sensitive words include names of state authorities and the words “state” and “autonomy”.
• Usage of such words as "Limited", "Ltd.", "Group", "International", "Financial" is very popular.

To incorporate a SIA company in Latvia the following steps are required:

1. Adopt a resolution to establish a company;
2. Pay share capital;
3. Certify signatures by the notary;
4. Register the company at the Register of Enterprises;
5. Register at State Revenue Service;
6. Connect with the system of electronic declaration.

To register SIA in Latvia it is required to submit an application and a set of documents to the Register of Enterprises. Application can be submitted by the founder or the other person with a proxy.

The number of documents should be mentioned in the application. If documents have more than one page they should be bound.

Before submitting the application a government fee for registration and publication in the official gazette should be paid.

List of required documents:

• Articles of Association;
• Memorandum of Association (3 copies);
• Resolution on establishment of the company;
• Notice on the registered office;
• Application for director’s appointment;
• Bank receipt confirming the payment of share capital (before registration it is required to open a temporary bank account);
• Documents confirming the amount of each asset contribution (in case of contribution in kind);
• Written consent of each director to be the member of the Board of directors (if SIA has the Board);
• Certified samples of directors’ signatures (founders’ signature is not required);
• Receipt confirming payment of government fee;
• Receipt confirming payment for publication in the official gazette.

All documents should be in the Latvian language. Affidavit of compliance of Latvian documents with English documents is available.

After registration Register issues the following documents:

• Certificate of Incorporation;
• Resolution on registration of enterprise in the Commercial registry;
• Memorandum of Association (certified in the Register of Enterprises)

Articles of Association should contain the following information:

• founders’ information (for natural person – name, last name, address; for corporate body – name, registration number, legal address, representative’s name, last name, occupation and address);
• company name;
• amount of share capital, number of shares and par value of shares;
• amount of share capital signed by each founder and amount of share capital supposed to be paid up before submitting the application for registration, time of payment;
• amount of shares of each founder;
• amount and par values of those shares which are paid in kind upon incorporation;
• amount of permissible incorporation costs and conditions of their compensation;
• special obligations, rights or advantages which are attributed to the person who intent to take part in the establishment;
• first names, last names, addresses of directors;
• first name, last name, address of inspector (if any);
• other provisions which are considered significant by the founders and which are not against the law;
• place and date of signing the AA.

Articles of associations should be signed by all the founders. It is not required to certify founders’ signatures.

If the company is founded by one founder, resolution on establishment of the company should be signed instead of articles of association. Resolution contains the above information. It is not required to certify founder’s signature.

SIA Memorandum of Association

Memorandum of Association should contain the following information:

• company name;
• term of existence or object of the company (if the company is established for a specific term or for a specific object);
• amount of share capital, shares and par value of shares;
• number of directors and their right to represent the company jointly or separately ;
• specific conditions of disposing shares (if any);
• other provisions which are considered significant by the founders and which are not against the law;
• place and date of signing the Memorandum.

Bank receipt confirming the payment of share capital

The minimum authorized capital of a limited liability company in Latvia is EUR 2 800, but it is possible to register a company with a reduced capital (up to EUR 2 799).

Before submitting an application for company registration, the full amount of the authorized capital must be deposited in a bank account.

It is allowed to pay both in money and property investment.

After registration with Register of Enterprises it is required to register at State Revenue Service.

Registration at tax authority is not a part of company incorporation procedure and is completed separately.

Depending on type of entity and type of activity there are two kinds of registration for VAT:

• Voluntary registration – if the amount of taxed transactions does not exceed EUR 35 000 per year;
• Compulsory registration – if the amount of taxed transactions exceed EUR 35 000 per year.

To register for VAT you should file an application, in case of successful registration you will be sent a Resolution on registration.

Electronic declaration system is a way to file information with State Revenue Service, returns and tax returns via Internet. Connecting with the system is obligatory.

After company registration is complete, one should connect with electronic declaration system, since tax returns are not accepted in paper. To connect with the system you should conclude the contract with the State Revenue Service. After the signing of the contract company is registered as a user within 5 days.

It takes 10-30 business days to register a SIA in Latvia. This term covers the whole procedure including preparation of basic documents, opening bank account, registration at Commercial Registry and delivery of documents.

Term of registration procedure at the Commercial registry is as follows:

• Processing of the application takes 3 business days (standard fees) and 1 business day (standard fee tripled)

Head public notary of the Register of Enterprises has a right to issue an order about processing the application within the term set by law under condition of returning government fee, if the Register is not able to process the application within one business day.

If it is required to register for VAT processing time will take 15 business days.

All the records of Commercial Registry are publicly accessibly through publication in the official gazette Latvijas Vēstnesis.

Publicly accessible information includes:

• About incorporation documents with a date of registration and dossier number at the Commercial Registry

This information is published within 3 days since the entry of information into Commercial Registry at founders’ cost.

Information on registered company can be obtained at Register of Enterprises and Databases providing access to state registers.

To obtain information from Register of Enterprises you should pay a state duty in any bank first.

Request for information is submitted to the Register along with the payment receipt:

• in person;
• by post;
• by fax (upon obtaining information the original receipt should be submitted).

Register of Enterprises provides standard information on companies only:

• Detailed up-to-date information, can be obtained immediately (printout from the database of Register of Enterprises, within 1 business day);
• Detailed up-to-date information and the before information, can be obtained immediately (printout from the database of Register of Enterprises, within 1 business day);
• Reading the registration dossier of the registered company (only in the department of Register of Enterprises where it is kept), within 3 business days.

According to the amendments to the Commercial law 2011 about beneficiaries, shareholders of the Latvian companies are obliged to report the beneficiaries’ information to the Register.

This information is not public, since only law-enforcement authorities and controlling authorities have access to it.

There are also some exceptions to the above requirement, e.g. in case the shareholder cannot get the information on beneficiary due to the objective reasons.

It is possible to request the following information on companies in the public databases online:

• company search at the Commercial Register;
• company name, legal form, date of registration;
• registration number;
• legal address and telephone of the company;
• share capital and type of activity;
• list of officers;
• list of founders;
• list of persons who have a right to sign documents on behalf of the compant;
• sample of signature by the officer (scanned copy);
• scanned documents search;
• search at the Register of insolvency;
• detailed information from Certificate of Incorporation;
• search of foreign representative offices;
• list of branches;
• previous addresses, names;
• register of changes.

Information from Register of annual returns:

• balance sheet for previous years (for one year);
• financial statement (for one year);
• company’s annual return;
• annual return appendix.

All information is available on the Internet, each service fee does not exceed 5 EUR.

The minimum number of directors in SIA is one. Corporate directors are not permissible. It is not required to appoint local residents as directors.

SIA is not required to appoint a secretary.

The minimum number of shareholders in Latvian companies is one. Corporate shareholders are permissible. Shareholders can be residents or non-residents.

Shareholders’ information is disclosed to public and local agent.

There are no requirements regarding frequency of general meetings.

In 2017 the Law on Introduction of Beneficiary Register was adopted.

All legal entities registered in Latvia must submit beneficiary data. The Register contains the following information:

• The names of all beneficiaries;
• identification number (if not - date of birth, number of the identity document, date of issue, country and issuing authority);
• nationality;
• country of residence.

Type of control over a legal entity (including full name, identification number for the participant or individual shareholder through whom the control is exercised, or the name, registration number and legal address of the participant or shareholder legal entity).

From the beginning of 2020 the Registry of Companies became public: the information is provided free of charge and without the need for additional authorization on the site. Some information can only be obtained for an additional fee and with a motivated request.

The minimum authorized capital for SIA is EUR 2 800, for AS - EUR 35 000.

In SIA, the capital can be from EUR 1 to EUR 2 799 if the conditions are met:

• No more than 5 founders, who are natural persons (residents or non-residents);
• All founders are directors;
• All members have only one company with reduced capital (less than EUR 2 800).

Before submitting the application at least 50% of the capital should be paid in, the rest should be paid in within a year since the date of registration.

Share capital can be paid in cash or in kind. Founders have a right to make self-assessment of the asset contribution if the value of such a contribution does not exceed EUR 5 700 and makes less than a half of the authorized capital.

In SIA with reduced capital (from EUR 1 to EUR 2 799) the whole capital should be pain in before registration.

It is permissible to pay either in money or in property, but note that until the registration statement is filed, the paid-up capital stock of a joint stock company is payable in money only.

Bearer shares are not allowed.

According to Latvian legislation SIA is required to have a local registered office. This means that each company should have a legal address in Latvia.

There is no statutory requirement to have a seal.

The redomiciliation of companies either to or from Latvia is not permitted.

Corporate account opening constitutes a mandatory procedural step following business registration in Latvia. Latvian financial institutions operate under EU regulatory standards, offering multi-currency account solutions (EUR/USD) with comprehensive online banking services and international payment capabilities.

Required documentation includes:

- Certified corporate formation documents

- Comprehensive beneficiary ownership and director disclosures

- Detailed business activity description

- Proof of funds origin documentation

Financial institutions rigorously enforce AML/KYC protocols, resulting in standard processing timelines of 1-3 weeks. Since 2018 regulatory reforms, Latvian banks have implemented enhanced due diligence requirements for non-resident entities, particularly those with complex ownership structures. International banks maintaining Latvian operations often provide more flexible servicing terms for foreign enterprises while preserving EU jurisdictional advantages.

Post-account opening obligations mandate:

- Periodic corporate data updates

- Regular financial reporting submissions

- Transaction legitimacy verification

Non-compliance may trigger account suspension or termination.

Registered Latvian entities must maintain continuous legal compliance through:

1) Financial Reporting: Mandatory accounting records and annual submissions to the Enterprise Register, with audit requirements for AS entities and qualifying SIA companies based on financial metrics.

2) Tax Compliance: Timely fulfillment of fiscal obligations including:

- 20% corporate income tax on distributed profits

- Standard 21% VAT rate (with reduced 12%/5% rates for qualifying transactions)

- Social security contributions for employed personnel

Micro-enterprises may elect simplified taxation regimes with fixed payments.

3) Registry Maintenance: Regular updates to the Enterprise Register regarding beneficial owners, directors, and shareholders.

4) AML Compliance: Implementation of ongoing monitoring systems for fund origin verification and transaction screening.

Corporate restructuring (director changes, capital increases, or legal form conversions) requires strict adherence to the Commercial Law procedures. Professional corporate services including accounting, tax advisory, and legal support are strongly recommended to ensure sustained regulatory compliance and operational continuity.