How to open a business in Latvia in 2022: key issues
Latvia is one of the best countries for starting a business if you plan to work in the EU. Its main advantages are fast registration and a low tax regime. The tax rates are especially low within so-called European Special Economic Zones (ESPON). Other reasons to open a business in Latvia 2022 include ease of doing business (23rd place) and a high 36th place in the index of economic freedom by the Heritage Foundation. As for the latter indicator, Latvia outpaces Monaco, which is known as a popular offshore destination.
Opening a business in Latvia: things you need to know
Business registration in Latvia is fast, and a foreign owner does not even need to come to the country. It is enough to delegate the task to our employees, and we will do all the necessary things for you. Moreover, the laws of Latvia do not limit the participation of foreigners in the capital of companies, and even 100% alien ownership is allowed.
A foreigner can have different business registration forms including the following ones:
- As an individual who can engage in entrepreneurial activities. Exceptions are brokers, commercial agents, excise dealers, and vehicle dealers. In these cases, you must register as a legal entity, as a sole trader, or create an LLC.
- Limited Liability Company - it does not bear full responsibility for its debts and obligations. Owners can be one or more persons. Share capital starts from €2,800, and half of it must be paid before registration in the Commercial Register.
- An open joint-stock company is fully liable for its debts and obligations. Minimum capital is starting from €35,210, and a quarter must be paid in cash at the time of registration.
- Branch or representative office of a foreign company - the first form has the right to do business independently, while the second one does not have such a right.
Responsibility for the obligations lies with the parent company.
How to submit documents
Before registration, the company must pay the share capital, so opening a temporary checking account at the bank is obligatory. An exception is the form of registration, where the share capital is less than €2,800. Then an application must be submitted to the Registry of Enterprises for the capital to be entered in the Commercial Register. The application must be certified by electronic signature.
An application for opening a company in Latvia can be written in any form. It must contain the information specified in the regulations and information on the owners, shareholders, and directors. The availability of an electronic business address is required for companies from January 1st, 2023, so do not forget to specify it.
Despite the apparent simplicity, it is easy to make mistakes when filling out the form, so it is highly recommended to register under the supervision of our experts.
Does the company need any licenses
Whether or not you need a license depends on the type of business. You will need a license if your business relates to medicine, food, gambling, public performance of music, etc.
Registration of residence permit in Latvia
If you plan to live and work in Latvia, you can get a residence permit after some time. It can be arranged through a board member position in a local company. Requirements:
- the business must be registered one year ago or earlier;
- your monthly salary must be higher than €2,286;
- the total sum of all taxes to be paid by the company must be at least €21,350 per year.
How to quickly open a business in Latvia
For fast business registration in Latvia in 2022, contact IT-OFFSHORE experts.