Conditions and Costs of Establishing a Company in Latvia
As Latvia continues to attract investors, entrepreneurs and business owners who are keen to take advantage of its favourable business environment, there has been a surge in the number of companies being established in the country. The process of setting up a company in Latvia can vary depending on the type of business you intend to run, as well as various other factors. However, in this article, we will provide you with some general guidelines on what you can expect in terms of conditions and costs of establishing a company in Latvia.
Conditions for Establishing a Company
In order to establish a company in Latvia, there are certain conditions that must be met. Firstly, you must choose the legal form of your company. The most common types of legal forms of companies in Latvia are:
1. Limited Liability Company (SIA) – This type of company is the most popular in Latvia, as it is relatively easy to establish and manage. It requires at least one shareholder and one director, with a minimum share capital of €1.
2. Joint Stock Company (AS) – This type of company is suitable for larger businesses with multiple shareholders, and requires a minimum share capital of €25,000.
3. Sole Proprietorship – This type of business is owned and run by a single person, and does not require any share capital.
Once you have chosen the legal form of your company, you must also choose a business name and register it with the Register of Enterprises. This process can take up to 10 business days to complete, and you will be required to pay a fee of approximately €30. You must also provide a registered address for your company, which can be the same as your personal address.
In addition, you must obtain a business license if your company is engaged in certain types of activities, such as construction or transportation. You will also need to register for VAT, social security, and health insurance.
Costs of Establishing a Company
The cost of establishing a company in Latvia can vary depending on various factors such as the type of company, location, legal fees and registration fees. However, here is a rough estimate of some of the costs involved in establishing a limited liability company (SIA):
1. Share capital – minimum of €1
2. Registration fees – approximately €30
3. Legal fees (including notary and lawyer fees) – Approximately €300-€500
4. Tax registration and VAT registration fees – approximately €30-€50
5. Annual accounting and audit fees – approximately €400-€600
FAQs
1. Can I establish a company in Latvia if I am not a resident of the country?
Yes, you can establish a company in Latvia even if you are not a resident of the country. However, you will need to appoint a local director who is a resident of Latvia.
2. How long does it take to establish a company in Latvia?
The process of establishing a company in Latvia can take up to two weeks to complete, although this can vary depending on various factors such as the type of company and location.
3. What documents do I need to establish a company in Latvia?
To establish a company in Latvia, you will need to provide a copy of your passport, proof of address, and a business plan. You may also be required to provide other documents depending on the type of company you wish to establish.
4. What are the tax implications of establishing a company in Latvia?
The corporate tax rate in Latvia is 20%, and there are also other taxes such as value-added tax (VAT), personal income tax, and social security contributions.
Conclusion
Establishing a company in Latvia can be a relatively straightforward process, as long as you meet the necessary conditions and understand the costs involved. While the process can be time-consuming, with the right guidance and support, you can establish a company that is fully compliant with local regulations and able to take advantage of Latvia’s favourable business environment.