Company Formation in Latvia

Latvian business environment provides foreign investors with the opportunity to incorporate a company quite hassle-freely, provided that certain steps are followed. Besides the straightforward company registration procedure, a big advantage lies in the short period of time required to set up a Latvian company. 

STEPS FOR COMPANY FORMATION IN LATVIA

1) Initially, the client should provide a series of details related to the proposed names of the entity, the shareholding structure and to the activities that the future company will conduct. The foreign investor should know that in Latvia there is no special option to reserve a company name beforehand; upon submitting the company registration documents, the name is automatically reserved. Also, the activities to be conducted by the future Latvian entity need not to be specified for the purpose of incorporating the company; these will however be required upon registering the company for VAT purposes with the State Revenue Service.

Thereafter, the client will also be required to provide certain identification documents which, depending on the nature of the shareholders (i.e. natural persons or legal entities), can be listed as follows: passport copies of the directors and shareholders, utility bills for proof of address, Articles of Association and certificate of incorporation of the founding legal entity, etc.

2) The following steps for the incorporation of a company in Latvia will be the drafting of the relevant documents, such as the Power of Attorney, by means of which the client empowers a legal representative to remotely set up the company in Latvia on his/her behalf, opening the company’s bank account where the share capital amounting to 2,000 LVL and signing the required documents in front of a Latvian Public Notary.

3) The final step is to submit all the company’s documents translated into Latvian by a sworn translator with the Trade Register. Once all the company formation related documents have properly notarized as per the Latvian laws, they will be filed for registration with the Trade Register for approval. The company is considered duly operational, once these steps are complete and the registration documents are issued.

The whole process takes approximately one week to complete.

REQUIREMENTS FOR COMPANY FORMATION IN LATVIA

- any person of any nationality or residence can be director or shareholder in a Latvian company;

- the shareholders of a company established in Latvia can be both natural persons or legal entities;

- a company in Latvia must hold a local registered office (service provided by BridgeWest)

- the minimum capital for establishing a Limited Liability Company in Latvia amounts to LVL 2,000, i.e. approximately EUR 2,850.

SERVICES PROVIDED FOR COMPANY INCORPORATION IN LATVIA

- drafting the Articles of Association (necessary for the company incorporation in Latvia); The Articles of Association can be signed through Power of Attorney, therefore the physical presence of the shareholders and directors is not required.

-  drafting all other documents required for the incorporation; These documents are: Specimen Signatures, Affidavits, Special Forms provided by the Latvian Trade Register.

- arranging Public Notary procedures (if the foreign shareholders visit the country) and/or certified translations (if the shareholders will provide the required documents via mail).

- setting up a bank account for your Latvian company. This refers both to an initial share capital account as well as a current bank account after the company is formed.

-  recommending a Latvian accountant; Accountancy services are recommended for any new business registration in Latvia.

Bridgewest can assist you with:

- Establishing a S.I.A. (Sabiedriba ar ierobežotu atbildibu - Limited Liability Company) This type of Latvian  company can have one shareholder and one director and must maintain a local address (office) and a minimum share capital of 2,000 LVL (ca. 2,845 EUR).

- Incorporating a A.S. ( Akciju sabiedriba - Joint Stock Company ) This type of Latvian company can have at least one shareholder and maintain a local address and a minumum share capital of 25,000 LVL (ca. 35,570 EUR).

-  Setting up a Latvian Branch, Subsidiary or Representative Office-Any foreign company is able to set up branch entities in Latvia. These can be set up as separate entities from the parent company (having the foreign company as shareholder) or extensions of the parent-company.

LATVIA KEY FACTS

- The general corporate income tax rate for companies in Latvia is 15%. If you set up a micro company, you will benefit from a lower corporate tax rate of 9%.

- The standard VAT rate in Latvia is 22%, with a reduced rate of 12% for accommodation and newspapers, while other services may be exempt from VAT.

- If the dividends are paid to a company that is located in an EEA member state, there is no dividend tax. For dividends paid to nonresident companies, the tax rate is 10%, unless there is a treaty that stipulates differently.

BridgeWest is also able to offer ready-made Latvian companies and VAT registration.

Please contact us for more information and prices.