How to start a business in Latvia - company formation, trading with Russia & Ukraine

Positioned at the crossroads of northern and eastern Europe, the Baltic state of Latvia is making the most of its status as a member of the EU. Foreign investment is strong and Latvian authorities have taken steps to streamline the regulations governing company formation. The range of possible business entities has been reduced, bringing the commercial landscape more into line with established EU standards.

What are the main types of company in Latvia?

There are four main kinds of business entity for foreign investors:

  • Limited liability company (SIA)
  • Joint stock company (A/S)
  • Branch office
  • Representative office

REQUIREMENTS FOR SIA

  • Minimum share capital to be deposited is €3090 and at least half must be paid up front.
  • Minimum directors: one required and must be a private person, not a company.
  • No restrictions on foreign shareholders or directors (shareholders can be corporate or private entities)
  • A registered office address is needed (PO Box are not allowed)

What are the main features of an A/S joint stock company?

  • A popular format for larger companies that wish to raise public capital
  • Minimum share capital is €35,572 which must be fully paid up before registration
  • Two-tier system comprising management and supervisory boards
  • Accounts to be audited and filed with authorities

What are the main features of a branch office?

  • Foreign-owned branch is taxed at same rate as a Latvian company
  • Reporting and audit requirements are the same as for Latvian companies
  • Profits can be repatriated without withholding tax
  • Dividends transferred abroad are subject to 10% withholding tax

What are the main features of a representative office?

  • 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 in the country

How easy is it to recruit staff in Latvia?

Latvia’s economic success owes much to the motivation of its young, go-getting workforce. Latvians have enthusiastically embraced free-market reforms. Labour costs, although on the rise, remain generally low. There are a number of recruitment agencies in the capital, Riga, which are part of our company formation team.

For more information on this and any other issues regarding company formation in Latvia including trading with Russia and Ukraine, contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.