Why Register a Company in Latvia?
Key Benefits for International Entrepreneurs
Company formation in Latvia can be a good decision for someone who’d like to start a business in Europe. It has some benefits that make it attractive for International Entrepreneurs:
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ease of access from any European country;
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simple company registration in Latvia;
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attractive tax system;
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start-ups and technologies;
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a skilled, multilingual labour force and high investment in the tangible assets.
Economic Environment and EU Legal Integration
Latvia is actively developing policies to fuel start-up growth, with a particular focus on FinTech. Following a change in stock options policy, Latvia has been ranked as the most start-up-friendly country by Index Ventures.
Latvia as a member of EU has made the EU law an integral part of the Latvian legal system, and it has the primacy over the national laws. The compliance with EU directives and regulations has required Latvia to standardize its procedures and policies across various sectors. This standardization has reduced bureaucracy and improved service delivery in public sectors.
Available Company Types in Latvia
Limited Liability Company (SIA)
The most popular form of company incorporation in Latvia is the Limited Liability Company (SIA). It can be founded by individuals or legal entities, including non-residents. The minimum share capital is 2,800 EUR, payable in full before applying to the Register of Enterprises.
There’s also a low-capital version of the SIA designed for small businesses. This option allows 1 to 5 individual (non-corporate) shareholders, including non-residents, and requires just €1 in share capital.
In both cases, founders and shareholders are not personally liable for the company’s obligations. Every SIA must have a registered office in Latvia.
Joint-Stock Company (AS)
A Joint-Stock Company (AS) is an open commercial company with shares that can be publicly traded and can have multiple owners, including individuals and legal entities, even non-residents. The AS requires a minimum share capital of €35,000, fully paid before registration.
Like the SIA, shareholders are not personally liable for the company’s obligations. A legal address in Latvia is also required.
Partnerships
A partnership is a legal entity formed by two or more individuals through a partnership agreement to conduct commercial activities. In Latvia, partnerships can be either General or Limited partnerships. In a General partnership, members are fully responsible for the entity's debts, while in a Limited partnership, their liability is limited to their capital contributions. There are no minimum share capital requirements.
Step-by-Step Latvia Company Registration Guide
Collecting Founder and Director Details
Company establishment in Latvia begins with gathering information about the Founder and Director, which typically includes: name, surname, personal identity number, nationality, and country of residence.
Drafting Legal Documents
Draft the Memorandum of Association (outlining business goals) and the Articles of Association (defining internal rules such as shareholder rights, director roles, meetings, and decision-making processes).
Offshore and Fintech Alternative Accounts
As we have already mentioned, it can be difficult to open a business bank account in Hong Kong due to high document requirements or the need for a personal visit. In such cases, companies can use offshore or fintech accounts as an alternative. Such accounts are opened with non-bank institutions, often without the requirement of physical presence, and can support cryptocurrency transactions. This choice is often suitable for startups, international companies and freelancers. So, this is how you get an offshore bank account in Hong Kong.
Depositing Share Capital
The required share capital must be deposited in full, either in cash or through financial means. It must be done before proceeding to registration.
Submitting to the Latvian Commercial Register
After all information will be collected and the share capital will be paid, starting the process of submitting an application to the Commercial Register. This process can be done electronically.
Tax Registration and VAT Number
You can apply for tax registration and obtain a VAT number during the company registration process. The standard VAT rate is 21%, but a reduced VAT rate is also set for specific groups of goods and services, and it can be 12%, 5% or 0%.
Opening a Corporate Bank Account
Opening a traditional bank account in Latvia can be difficult for companies with non-resident owners unless there’s a physical office, employees, or local activity. However, alternative financial service providers can typically open accounts within a few days.
How ICON Partners Can Help
Full-Service Package from Company Registration to Accounting
Icon.Partners provides full assistance throughout the company setup process in Latvia. Our legal team prepares all incorporation documents and represents your interests before the relevant authorities.
Remote Setup with Legal Address in Latvia
Icon.Partners helps with the remote setup with Legal Address for your company in Latvia, which can save your time.
Bank Account and VAT Number Assistance
Icon.Partners provides prompt submission of documents and support until the account is opened. This significantly saves your time and reduces the bureaucratic burden.
Transparent Pricing with No Hidden Fees
The company provides a clear price list without unexpected surcharges or unclear commissions. All costs are agreed in advance, so you can plan your budget.
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5.0
"Their adept use of technology for communication and project management streamlined the entire process."
Thanks to Icon.Partners' efforts, the client was able to integrate with major platforms, such as Google, Facebook, and Stripe, and optimize their platform. The team was highly supportive and responsive from a workflow standpoint, and internal stakeholders were particularly impressed with the service provider's flexibility, professionalism, and technical prowess.
Oleksandr Platonov
CEO, VorfahrQR UG
Germany📍
Apr 10, 2024
Reviews