Latvia: economy and business opporunities

Parent Category: ROOT Published: Friday, 20 August 2021 Print
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Business opportunities in Latvia economy 

After Latvia acceded to the European Union, the country successfully emerged from the financial crisis of 2008-2009, which led to a significant decline in the Latvian economy.

But over the past time, the situation has completely changed, now it has become even better - Latvia is successfully developing an open market economy, which in turn has a good impact on the quality of life in this country. In this regard, the country is very attractive for those who would like to live and organize their business in Latvia.

Latvian legislation in every possible way stimulates the development of business in their country, not paying special attention to whether the owner of the company is a resident.

In 2019, the international Doing business rating ranked Latvia 19 out of 190 countries in terms of ease of doing business. The weight of this indicator is quite serious because Latvia is ahead of countries such as France and Switzerland in this list.

 

Few advantages of doing business in Latvia

  • Possibility to enter the EU market, on the same terms as everyone else in Europe
  • Ease of business registration and minimum requirements for the presence of authorized capital
  • Lack of pressure on business from the state
  • Moderate tax burden
  • The developed infrastructure

 

Residence permit and citizenship in Latvia

Everyone who wants to immigrate to Latvia can get a residence permit through investing or buying/starting a business in the country (we will bypass the option of buying real estate for now)

Since 2010, for foreigners staying on a long-term basis, the possibility of obtaining a residence permit for 5 years at once is active !! Subject to financial investment in the development of the country's economy. The relatives (family) of the investor can also obtain a residence permit.

 

5 ways to obtain a residence permit in Latvia:

  1. Register a new company with a capital of 50 thousand euros
  2. Invest from 50 thousand euros in the capital of a Latvian company. But provided that such a company employs less than 50 employees, and the annual turnover does not exceed 10 million euros. Also, you have to be ready to pay the state fee, not much, not a little - 10,000 euros.
  3. Invest from 100,000 euros in the capital of a Latvian company, if at the time of the deposit, more than 50 employees work in it, and the annual turnover exceeds 10 million euros. Here, too, you have to be ready to pay a state fee, not much, not a little - 10,000 euros. 
  4. A more difficult option is to invest at least 280,000 euros in the country's credit institutions.
  5. Buy for 250,000 euros of interest-free government bonds with the subsequent payment of a state fee of 38,000 euros.

 

Company registration in Latvia

Latvia is open to foreigners and their businesses. The country's legislation does not limit the business (business) participation of non-residents (foreigners) in the capital of Latvian companies. Non-residents of Latvia can either create their own business with 100% ownership, with the sole proprietorship or become a participant in a ready-made business in the form of equity distribution.

 

person using laptop on white wooden table

 

Organizational and legal forms of doing business in Latvia

If you have already decided that business in Latvia is yours, then be sure to read the legal forms approved at the state level:

 

Individual merchant (individual)

All legal and financial responsibility lies solely with the merchant (individual). He is 100% responsible for all his property.

 

Limited Liability Company (LLC) is a legal entity

The founder of an LLC can be one person or several.

Important! The law does not stipulate that the founder must necessarily be a resident of Latvia.

  • the authorized capital must be at least 2,800 euros. The capital contribution can be divided into 2 parts, the first 50% is paid before applying for registration, the second half is within a few months after the start of the company. 
  • the capital of an LLC can be contributed in the form of financial resources, or in the form of other property, which covers the entire amount.
  • the liability is fully borne by the LLC, while the founders of the LLC are not responsible for the company's obligations.

 

Open Joint Stock Company (OJSC)

It can have one or more founders who can be both residents and non-residents of Latvia. OJSC bears full liability in the amount of all property.

The minimum capital is at least 35210 euros, 25% of the total must be deposited into the account before the start of registration. In comparison with LLC, the amount of the authorized capital is paid exclusively in cash.

 

Fourth form - Branch or representative office of a foreign company.

 

Business registration procedure in Latvia

Registering a business in Latvia is easier than ever, and one of the advantages is fast!

Before initializing the registration procedure, you must:

  • choose the type of activity of the company
  • determine the organizational and legal form of the company
  • choose a name, pass the check for uniqueness through the State Center of Registers of the country
  • prepare an enterprise charter

 

Registration stages:

  • collect all the necessary documents. Important! All documentation must be in Latvian, notarized by a Latvian notary
  • register share capital and certify samples of signatures of board members
  • open a bank account in a bank of Latvia and deposit the authorized capital into it, if such is provided, receive a statement of payment
  • register the company with the Commercial Register and the State Revenue Service
  • obtain a VAT payer certificate from the State Revenue Service
  • to decide whether the company will have hired employees and if so, it is necessary to register them all in the compulsory state social insurance system
  • if the company will employ foreign citizens, then it is necessary to register them through the immigration service

A pile of passports with visa stamps.

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Sunny beach on a tropical island.