Latvia Company Formation

Opening a company in Latvia

Why start a company in Latvia? What are the advantages in the country of Latvia?
Latvia, a country that is part of the European Union, is a convenient solution for many entrepreneurs.

The local currency is the Euro (EUR), and living is very cheap in the country.

Being part of the former Soviet Union, Latvia is a very attractive base as an entry into the Northern European market, with cheap maintenance costs and a local market that understands the English language very well.

The Baltic country is located in Northeastern Europe, and it is a very important strategic location for import/export operations to Northern Europe and Scandinavian countries.

Latvia is a perfect place for investments and business expansion. The Latvian government is keen to boost the economy.

Investors see Latvia as one of the attractive investment destinations in Europe. The tourists are fascinated by the Latvian hospitality and friendliness, the cultural heritage of Latvia and the natural wealth of the country.

The Latvian economy is undergoing significant growth with solid foundations in the country's democratic mechanisms thanks to which the economic system is considered one of the best economies among all post-socialist (former Soviet Union) countries. All factors together with the country's international safety due to Latvia's membership in NATO and the European Union, make Latvia a reliable and important business partner for foreign investors.

The process of opening a company in Latvia
Opening a company in Latvia begins with the signing of a notarial power of attorney to open a company by a local agent. The document was then sent with a courier urgently to Latvia to be processed by a local Latvian notary. After several processes in Latvia, the company in Latvia already exists legally and can start business activity.

In Latvia there is no need for a local director or a local shareholder. In Latvia you also do not need any European citizenship to open a company. You can open a Latvian company even if you are a foreign citizen. This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.

Opening a bank account in Latvia - current account for the company
Since this is a European country, more or less starting in 2018, those who want to open a bank account are required to come to the country.

However, there is an alternative, and that is opening an internet bank account. Indeed, similar to our "Zero One" bank, there are internet banks in Europe that would be happy to accept your company in Latvia as a customer.

Equity Capital
In order to open the company, a minimum deposit of equity of 2,800 euros is required.

In Latvia, it is required to make an actual deposit of the aforementioned amount of equity. Therefore, as part of the process, a bank account is opened for the purpose of depositing the equity.

After opening the bank account and depositing the equity capital, the company is opened and a company charter is issued from the commercial register (this is the Latvian certificate of incorporation).

After opening the company, you can use the bank account that was opened for the purpose of depositing the equity capital. In other words, the equity account becomes an active current account for all intents and purposes.

VAT registration
After the opening of the company, at the same time as the opening of the current bank account for the company, the registration of the new company in VAT will also be carried out. The company will receive a VAT number and can start trading.

EORI number
If you need to, we can obtain an EORI number for you so that you can import or export with the company within Europe.
EORI is an abbreviation of Economic Operators Registration and Identification number.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.
However, all costs in Latvia are low due to the relatively cheap cost of living.

Tax in Latvia
The company tax in Latvia is at a low rate of only 25%.
For sales to the local Latvian market, the VAT is 19.2%.

Questions and answers
Question: Is it necessary to physically fly to Latvia to open a company in Latvia?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Latvia. There is no need to fly to Latvia to open the company, nor the company's bank account. The entire process of opening the company and in most cases the company's bank account as well, are carried out remotely without setting foot on Latvian soil.

Question: Who provides the local address for the company in New Latvia?
Answer: We will provide the local address.

Question: How can I find a good accountant who can take care of the company in our new Latvia?
Answer: We will connect you with a local accountant.

Question: If I want to come to Latvia to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you don't just walk around the city in order to find a branch that will accept you and open a bank account for your new company in Latvia.

Question: What type of company in Latvia should I open?
Answer: In Latvia there are two types of companies:
The first type is a limited liability company ("SIA"). This is the LLC.
LLCs are considered more flexible in terms of organizational structure and easier to operate on a daily basis. They are suitable for investments of different scopes.

The second type is "joint stock company", that's how I imagine it can be translated into Hebrew. In English this type is called Joint Stock Company (JSC).
JSC companies are generally designed for large-scale investments. As a result, they are less flexible from a legal point of view and much more formal in terms of organizational structure and day-to-day operations. On the other hand, they are great for raising capital, as their shares can be issued on the Latvian Stock Exchange, and they can issue various types of securities.

Foreign investors often choose SIA companies, i.e. companies of the first type, unless their business requires that the company be of the JSC type (for example, if it is planned to establish a new bank or insurance company).

Question: Do you need a European passport to open a company in Latvia?
Answer: There is no need for a European passport. We can open a company in Latvia for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in Latvia?
Answer: The process of opening the company, including signing the power of attorney and sending it, should take about 4 weeks. After that, the process of opening a bank account takes between 3-4 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in Latvia for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in Latvia for a person with American citizenship or a person living in the USA.

Apparently it seems trivial that a person with ties to the USA could open a company in Latvia, but we assure you that this is not the case. Today, all banks in Latvia without exception refuse to open an account for a new Latvian company if its owner has any ties to the USA. Therefore, we are probably the only ones, and certainly one of the few in Latvia, who know how to open a company in Latvia for a person with American citizenship or who lives in the USA.

Question: Is it possible to define that any foreign company will be the subsidiary of a company in Latvia?
Answer: Yes, absolutely, we know how to do such a process with the foreign Registrar of Companies without any problems and in a completely smooth manner.

Question: How much does it cost to open a company in Latvia?
Answer: Click here and get in touch and get a current quote without obligation!