Latvia has consistently ranked among the top 20 of the 190 ranked world economies in the Doing Business Ranking maintained by the World Bank since 2015, reaching a high of 14 in 2016. LUMOS provides everyone considering starting a business in Latvia a brief overview of the Latvian regulations regarding the types of companies, the procedure of their formation and the applicable tax regime.
The Commercial Law provides options for registration of two types of companies – limited liability company (SIA) or joint stock company (AS). The minimal amount of share capital of a limited liability company is set at EUR 2800 and its governing body is a management board consisting of one or more members. Each member of the management board may represent the company and act on its behalf individually or jointly with other members of the management board, as provided for in the company’s articles of association. The share capital of a company at the time of its incorporation may be less than that required by law (including a possibility to found a company with share capital of 1 euro), however, the members of such a company are subject to obligations regarding the increase of the share capital over time and obligations to pay the minimum share capital.
For the purpose of establishing a limited liability company, the person must draw up the articles of association, the memorandum of association, the register of shareholders, a statement of the registered office and the consent of the owner of the property to the registration of the legal address. The signatures of the founder and board member on the shareholders’ register as well as the application forms must be certified by a notary public or on the spot in the Companies Register. The requirements for notarial certification of signatures are also deemed to be fulfilled, if the documents are signed with a secure electronic signature. Documents may also be signed by an authorized person on the basis of a notarized power of attorney. The decision to register a company is taken within three working days.
Since January 1, 2013, Latvia has a favorable tax regime for the formation of holding companies, exempting companies from tax payments on dividend and the sale of shares, as well as interest payments and payments for the use of intellectual property. Starting from January 1, 2018, companies are not subject to income tax if the profit is reinvested in the company’s development – it is payable in case the shareholders decide on the distribution of profits and payment of dividends.
LUMOS offers Latvian and foreign clients a full range of services related to company registration and business management in Latvia, preparation and filing of all necessary documents (in person or remotely), registration of legal address, opening of a bank account in Latvia, accounting and tax services, as well as continuous legal support for successful business operations in Latvia, including the services of AML and data protection specialist.