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Latvia

Positioned at the crossroads of northern and eastern Europe, the Baltic state of Latvia is rapidly making the most of its recently-acquired status as a member of the EU.

Foreign investment is rising strongly and Latvian authorities have taken steps to streamline the regulations governing company formation.

The range of possible business entities has been reduced from thirteen to five, bringing the commercial landscape more into line with established EU standards.







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There are three main kinds of business entity for foreign investors, and they are as follows:

Limited Liability Company (SIA), the most common business vehicle in Latvia, with minimum share capital is €3,090, at least half to be paid up. Minimum number of directors is one and there are no restrictions on foreign shareholders.

Joint Stock Company (A/S), the popular format for larger companies that wish to raise public capital with minimum share capital is €35,572 which must be fully paid up before registration. There is a two-tier system comprising management and supervisory boards, and accounts must be audited and filed with authorities.

Branch Office is a foreign-owned branch taxed at same rate as Latvian company. The reporting and audit requirements are same as for Latvian companies. The profits can be repatriated without withholding tax and dividends transferred abroad are subject to 10% withholding tax

Latvia’s banking system is well advanced, certainly by Baltic standards and offers all the facilities that are likely to be required by international investors. Few of the local banks are well established internationally.