Registration of Business in Latvia

How to open a business in the Latvia?

A lot of entrepreneurs seek to open a business in Latvia. The focus of the state on attracting foreign capital, membership in the European Union and a favourable tax climate have created a business atmosphere with a Baltic flavour.

Business in Latvia

Latvia has firmly established itself in the forefront in ease of registering and conducting business in its territory. Studies carried out by Doing Jones and The Wall Street Journal note a significant gap between the economy of this country and the former republics of the Soviet Union.

Entrepreneurs intending to do business in Latvia point out the following positive factors influencing decision making:

1. Convenient transit geographical location,
2. The high level of well-being,
3. Developed infrastructure,
4. Government programs for support and development of business,
5. Low level of corruption,
6. Simple procedure for company registration,
7. Preferential taxation and lending,
8. Possibility to enter the markets of Europe,
9. Ability to purchase a residence permit.

Free economic zones present an additional incentive to attract foreign capital. More than 50% of registered companies are founded by immigrants from America, Europe and the CIS.

Opening a business in Latvia

Depending on the set goals, directions of activities and choice of tax regime, the following optimal forms are possible for opening a business in Latvia:

1. Individual merchant.
   This form is not recognized a legal entity; established by an individual. Liability applies to all property of the owner.
2. LLC (OOO) is a limited liability company.
   At least one person can act as a founder. This form is recognized as a legal entity. There is no requirement for residency of the founder. Indeed, there is a requirement of the authorized capital minimum value formed by financial assets and property. Liability of participants extends solely to the limits of contributions to capital.
3. OAO is open joint-stock company.
   This form is recognized as a legal entity. Liability applies to all company assets. Share capital is formed solely by financial means.

Business Registration in Latvia

The choice of the most effective organizational and legal form of the company is accompanied by a subsequent stage, i.e. registration of a business in Latvia, which is divided into:

1. Checking the uniqueness of the name. It is compiled in Latvian and contains an abbreviation reflecting the direction of activity,
2. Preparation and notarization of constituent documents,
3. Filing an application in the commercial register, as well as constituent documents, specimen signatures of the board, business plan
4. Depositing funds to a bank account,
5. Registration in the tax authority, resulting in the receipt of an individual VAT number,
6. Registration in the social insurance authorities in case of employees.
7. Publication of the announcement on the establishment of the company in the official periodical edition.

All documentation is submitted in Latvian and requires special accuracy and authenticity. The slightest divergence with the actual data leads to a denial of registration. In such cases, you should contact a qualified specialist.

Business registration in Latvia is carried out up to 7 days from the date of submission of documents to the commercial register.

Some types of business require special licenses and permits: trucking, gambling, construction, trade in alcohol and tobacco products, etc.

Signing of a number of international by Latvia excludes double taxation.

The tax system is characterized by the collection of direct and indirect rates.

Buying a business in Latvia in the form of supplies of medical equipment, educational materials, passenger transportation provides for a preferential tax regime; running medical or social business generally excludes taxes.

Micro-enterprises play a special role in the economy of Latvia. For such companies, a special tax regime is envisaged. The main criteria for the company to apply this approach:

1. Annual turnover not higher than 100 000 Euro,
2. The maximum number of employees is 5,
3. All participants shall be individuals,
4. Wages shall not exceed certain amount.

In some cases it is more profitable to buy a business in Latvia. There is a certain business environment which sells ready-made enterprises. In certain cases it can be an advantage, since government and financial institutions have more confidence in a company with a positive history.

Contact our company and you will receive detailed instructions minimizing the possible financial losses.