Overview of Company Formation in Latvia
Economic concern common in Europe increases the company status value and generates perfect background for successful business. Company affiliates may be open within the Latvian territory and outside. Due to legislation of the country conditions are created for the company senior staff to mean that 50% of the total number of employees who are members of the Board should be residents of the jurisdiction.
Benefits of registering the company
Main advantages of company formation in Latvia
Low cost service of registration (the cost is at least twice as less against that applied in other European countries);
Remote registration of the company where personal appearance is not required (servicing based on power of attorney);
Prestige of belonging to Europe;
Double taxation agreements signed with 45 countries;
Latvia has doubtful good will (the country is not on black lists of the Ministry of Finance, OECD, FATF);
Loyalty to the national legislation to private business;
Simple tax system (no specific taxes, on the territory of the country VAT is 21%, zero taxation is applied when doing business with companies in Europe, the rate of tax for profit earned is not over 15%).
The paid authorized stock capital in the amount of 2800 Euro is required to get the permit to register a company in Latvia. The capital may be paid in full or in part. Deposits may be made as the tangible contribution or as the intellectual deposit. The minimum structure of the company requires at least one director who can be a legal entity or an individual who is a resident of any country.
Possible options of the company registration form: SIA (limited liability company), SE (European-type company), AS (Joint-Stock Company), EEIG (a concern or holding).
PFSER Company offers services of companies yet running in Latvia. A day is required to register them. If a new company needs to be registered, far longer procedure is required that covers the following:
Submission of the identity document;
Company registration or issuance of a power of attorney;
Transfer of copies of registration documents;
Registration of personal data and communication with banking institutions;
Dispatch of all prepared documents to Private Financial Services;
Filing of documents with the bank by the company personnel;
Provision of prepared registration documents to the client as well as the Digipass;
Communication of instructions to the client by the bank for account access.
In Latvia, companies are not fully exempted from their financial commitments. Reporting and binding payments are made once a year, no later than April 30. Payroll reporting is done once a month. At that, the accounting is independent from the company board. If the owner of the company is a sole founder, full-time accountant shall be required or a third party experts shall take these functions.
The following tax charges are assumed when registering a company in Latvia: the VAT rate is 21%, income tax for foreign citizens is from 5% to 15%, royalty – 10%. Tax on capital increase and gain on profit is 15%, and at that, the amount of income tax may be reduced due to the taxable base reduction.
The value added tax shall be at all times paid by companies with the taxable amounts of transactions of at least 10 000 LVL. Income declarations shall be submitted no later than the 15th day of the month following the reporting month.
In 2014, in Latvia, the legislative authority revised the need to pay the tax on intellectual property item. When paying taxes, the taxpayer shall be entitled to use the right of prepayment.
Banks accredited in Latvia
Blue Orange Bank, JSC;
Baltic International Bank, JSC;
GE Money Bank, JSC;
NB banka, JSC Swedbank, JSC;
Bank M2M Europe AS;
Norvik Bank, JSC;
Latvijas Hipoteku un zemes banka, JSC;
SEB banka, JSC;
SMP Bank, JSC;
Regionala investiciju banka, JSC;
Rietumu Banka, JSC;
Trasta Komercbanka, JSC;
UniCredit Bank, JSC;
Latvijas pasta banka, JSC;
Citаdele bаnka, JSC;
Rigеnsis Bаnk, JSC.
If a company needs to be incorporated in Latvia, you are welcome to apply the Private Financial Services and its staff is willing to deliver services as follow:
Remote company formation in Latvia that does not require your personal presence at territory of the country;
Swift procedure for company opening that is possible in Latvia within a day;
Affordable cost of company registration;
Possibility to renew the registration from the second year at the date of payment;
Independence by territorial restrictions that lies in cooperation with all countries and potential document expediting via the Postal Service.