Company Formation in Latvia

Company Registration in Latvia

Latvia is your platform for international business and capital

Today, most of financial consultants for tax optimization in Europe offer Cyprus, UK, Dutch or Swiss companies. Some of these jurisdictions have an «offshore» image or have too high administration and management expenses, thus disabling its clients to develop the business.

We are introducing new solution for your customers doing business in Europe and
worldwide – Latvian LLC Company (SIA) with Latvian Bank account.

Why Latvia?

Latvian Company is a key element for successful business in Europe and worldwide

Latvia is a well-known European jurisdiction, financial centre of Eastern Europe, offers convenient taxation for trading and holding companies.

Since January 2013 Latvian companies became even more attractive for foreign clients, thus making them a top choice for tax optimization in Europe.

Company Registration in Latvia

Positioned at the crossroads of northern and eastern Europe, the Baltic state of Latvia is rapidly making the most of its recently-acquired status as a member of the EU. Foreign investment is rising strongly and Latvian authorities have taken steps to streamline the regulations governing company formation. The most popular business entity is the limited liability company (SIA). Corporate tax rate is fixed at 15%, one of the lowest in the EU.

A company in Latvia is well positioned to be an effective European intermediary for trade between Western and Eastern, “Russian- speaking” countries. Latvia is a multi-lingual society where all three Latvian, Russian and English languages are commonly spoken and professionals are adept at working with both Western and Eastern business cultures. Latvian banks are extremely efficient and well-developed (compared with often bureaucratic Russian banks), and can maintain accounts in all currencies including “soft” ones, such as Russian Roubles.

Benefits of Latvian Companies

European jurisdiction with excelente reputation
Low taxes
Low administration costs
Short incorporation time (2-3 business days with your own name)
European VAT number
Stable legislation
Easy and comprehensive accounting
Personal visit is not obligatory
Developed banking and financial sector
Close geographical location

Requirements For Company Formation in Latvia

Minimum share capital of Latvian company to be deposited: €3090, at least half to be paid up.
Minimum one director is required for company registered in Latvia. No restrictions on foreign shareholders or directors in Latvian company.
Registered company office address (no P.O. Box allowed)

Taxation in Latvia

Double taxation treaty with more than 50 countries all over the world, including EU countries, Switzerland, Norway, Russia, Israel, China, USA, Canada and many others.

As a part of EU, Latvian companies have European VAT number enabling to trade both with EU and non-EU companies VAT free.

Incorporation takes 2-3 business days and there is no need for a client to personally visit Latvia neither for company formation, nor for bank account opening.

We cooperate with largest Latvian banks.

Current general figures:

Corporate income tax – 15% *
Dividend tax – 0%
Tax on interests – 0% **
Tax on royalties – 0% **
Capital Gains Tax – 0%
Value Added Tax (VAT) – 0% ***

*     сan be reduced by expenses or agent agreement
**   from 2014
*** for export, 21% for most of the goods/services in Latvia

Most Used Entities in Latvia

Trading Companies

Latvian company is an ideal instrument for European and International trading. It has all the characteristics of any European company, but with additional benefits – low taxes, ease of set up, cost to register and own.

Latvia has one of the lowest corporate income tax in Europe – 15%, together with holding regime benefits (dividend tax at 0% rate) it becomes an ideal instrument for trading activities within and outside of EU.

In case of operations within EU requiring European VAT registration, the company may easily register for VAT in Latvia. Transactions on the territory of Latvia are subject to VAT at a rate of 21%, while for transactions between different EU countries VAT at 0% rate is applied.

The only restriction in trading activity is that payments to companies from tax-free countries included in so-called “black list” of the Cabinet of Ministers are subject to withholding tax 15%. This limitation can easily overcome, placing into tax schemes companies that are not included in the list.
European funds are accessible for setting up and development of production and services business.

Latvian Holding Companies

Latvian company can be used as an International Holding company. Starting from 2013 Latvia introduce favorable regime for international holding, financial companies and companies holding intellectual property.

Current general figures:

Dividend tax 0%
Corporate tax 15%
Latvian legal address
Latvian bank account
Latvian domain name
Latvian phone number

Starting from 2013 favorable tax regime for international holding, financial companies and companies holding intellectual property becomes effective in Latvia:

Starting from 2013 sale of shares and dividends received are exempted from income tax for Latvian companies.

Starting from 2013 dividends paid to foreign companies are exempted from withholding tax.

Starting from 2014 interests and royalties paid to foreign companies are exempted from withholding tax. Even now in certain cases these payments are exempted.

No stamp duties on share capital payment and shares transfer.

No controlled foreign corporations rules for legal entities.

The effect of EU Parents-Subsidiary Directive and Interest and Royalties Directive, as well as extensive network of double tax agreements allow to reduce or avoid taxes withheld from dividends, interest, royalties and other income paid to Latvia.
Double tax agreements at the moment are effective with 51 countries, including almost all European countries, all post-Soviet countries, USA, Canada, China, Israel, Turkey, Singapore.

Holding regime has no restrictions on participating interest, holding period, type of activity of subsidiaries. The only limitation – it doesn’t apply to income received from and paid to tax-free countries included in so-called “black list” of Cabinet of Ministers.

Dividends paid from Latvia to individuals are subject to withholding tax 10%, reduced rate can be provided by double tax agreement. Possibility to set off may exist depending on the legislation of individual’s residence country or relevant tax convention (for example, citizens of post-Soviet countries can take this advantage).