Company formation in Latvia

Company registration services

 

Information required for company registration in Latvia

The following information is required for company registration in Latvia:

• company name;
• data on shareholders;
• share capital amount and split between the shareholders;
• data on Members of the Board and their rights to represent the company (separately or together);
• legal address (we can provide it along with mail processing services, if required);
• brief description of the company`s business.

Actions required from the company founders and Members of the Board for company registration in Latvia

We designed our service so that we do most actions required for the company registration in Latvia. Your involvement will be required only for actions where your presence is absolutely necessary.

The actions that you will need to execute can be listed as follows:

• provide information required for the company registration;
• sign registration documents at a notary;
• pay in share capital;
• open bank account after the company is registered.

The shareholders and Members of the Board of the Company will be required to approve their signatures on the company registration documents at a Latvian Sworn Notary. Latvian residents can approve their signatures also in the Latvian Enterprise Register. It is possible instead of approving the documents at a Latvian Sworn Notary to approve the registration documents by a secure electronic signature. Residents of most countries can approve the registration documents at a sworn notary in their country.

In case you choose to have the company's legal address registered in a specific office or other specific location, you will need to submit the building's owner's written consent to register your company there.

Information required for company registration as VAT payer and general overview of the process

Latvian companies not registered for VAT

By default, a newly founded company will not be registered as VAT payer. Registration as VAT payer is not mandatory, unless a company fulfills certain criteria. If the company is not registered as VAT payer, it neither adds VAT its sales price, nor has the right to claim back from the state VAT on is expenses. Company not registered for VAT does not have to file VAT declarations. In several cases, it is sometimes advantageous not to be registered as VAT payer, e.g., if most of the company's clients are private persons.

Procedure of company registration as VAT payer

Application for company registration as VAT payer can be filed in the Latvian Enterprise Register together with company incorporation documents. It is also possible to apply for registration as VAT payer later at any time, by filing an application to Latvian State Revenue Service (SRS). On average, the company's registration as VAT payer takes approximately 1 week. The SRS may ask for additional information and/or interview with the company's management incase it has doubts that the company will be able to ensure its business and payment of VAT.

Information required for registration as VAT payer

The following informationThe following list is not all inclusive and is provided for general understanding only. We have omitted from the list information that we obtain in the process of company incorporation. Please contact us for more detailed information and consultaitons. is required in order to apply for new company registration as VAT payer:

• business sectors where the company plans to operate;
• planned turnover;
• name, registration number and country of incorporation of key customers;
• name, registration number and country of incorporation of key suppliers;
• planned source of financing of the company operations;
• planned number of employees in the first 12 months of the company's operations;

Criteria for mandatory registration as VAT payer

It is mandatory to register for VAT, if company meets at least one of the following criteria:

• the company will have sales to or purchases from other European countries;
• the company's sales in the preceding 12 months exceeds EUR 50,000.

Reporting requirements for companies registered as VAT payer

Companies registered as VAT payer need to file a VAT declaration. Depending on nature and volume of company's operations the VAT declarations should be filed monthly, quarterly or semi-annually.

Information required for opening a bank account for newly incorporated company

Information requierd for opening company's bank account in a Latvian bank

There are certain local and international statutory regulations that banks have to adhere in opening accounts and servicing clients. The way the banks implement these regulations differ, therefore exact list of information and documents differs depending on a bank.

The following listThis list is not all inclusive and is provided for general understanding only. Please contact us for more detailed information and consultations. is provided to give general understanding of what information banks typically ask for opening an account for new company:

• planned approximate average monthly amount of cash to be paid in to the account;
• planned approximate average monthly amount of cash to be withdrawn from the account;
• planned approximate average monthly amount to be received on the account;
• planned approximate average monthly amount to be transferred from the account;
• planned maximal amount to be transferred from the account;
• accounting software used by the company;
• information on true beneficiaries of the company;
• is any of the benefitiaries a politically important person or closely related to such person;

In our experience in some cases bank may ask for additional information to prove the information provided by submitting agreements with potential clients and suppliers.

Procedure of opening a bank account

According to standard procedure, after the company is registered in the Latvian Enterprise Register, the company's Member of the Board should personally visit the bank with his passport in order to fill in bank questionnaire, leave a specimen of his signature, choose required services and obtain code calculator and passwords for remote connection to internet-bank. Depending on the company's specifics, the bank may ask to provide additional documents. For Clients with simple and clear business model the bank accont may become operational in one - two days. For Clients with unusual or complicated business or structure the bank account opening may take a few weeks.

During the last few years, as a result of strengthening of anti-money laundering legislation in Latvia and all over the world, Latvian banks implemented much more scrutinized client acceptance proceduers. Often big Latvian banks reject opening of an account to companies with foreign beneficiaries, especially from Russia and other CIS countries. Such companies have higher chances for opening an account in smaller banks. These banks typically have much higher fees as they need to file extensive documentation for the clients that are classified as high-risk according to the anti-money laundering legislation requirements.

A Latvian company may also open a bank account in a foreign bank. There are a few foreign banks that are focused on on-line banking and open account over the internet.

Maintenance requirements for Latvian companies

Annual maintenance costs

There are no specific state duties for company maintenance in Latvia. Key expenses on the company maintenance can be listed as follows:

• rent of legal address;
• accounting, i.e., filing obligatory reports;
• Corporate Income Tax in the amount of EUR 50 for the companies that do not have profit and do not pay other taxes;
• payroll taxes from the minimal salary totalling EUR 225 for companies that do not have employees in months where their sales exceed EUR 2,150 (5 minimal gross salaries).
• bank charges.

Statutory reporting requirements

Statutory reporting requirements for companies registered in Latvia depend on the company's operations. As a general rule, actively operating companies have to file more obligatory reports that inactive companies.

The following list states main reportsThis list is not all inclusive and is provided for general understanding only. There is a number of reports that have to be filed not regularly, or when the company conducts certain business activities. that need to be filed by a Latvian company:

• Annual Financial Statements and Corporate Income Tax declaration;
• Monthly Social Security Tax declaration (if the company has at least one employee);
• Monthly, Quarterly or Semi-Annual VAT declarations (if the company is registered as VAT payer);
• Statistics declaration (if the company is chosen for reporting by the Latvian Statistics Commitee).