How to Start a Business in Latvia from the UK

Planning on setting up a business in Latvia from the UK? It’s a great place to do business, with great infrastructure, a skilled workforce and plenty of startup support available.

But how easy is it to start a new company there? Read on to find out everything you need to know about Latvia company formation, from legal structures to required documentation.

We’ll also show you a smart way to manage your company’s finances in Latvia and worldwide, using Wise Business - the ideal solution for international businesses.

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Doing business in Latvia

Latvia has many attractions for foreign entrepreneurs and investors. This includes a business-friendly environment, with support for startups and relatively low tax rates.

The country is strategically located to provide access to both European and Scandinavian markets. It has a well-educated, multilingual workforce, along with strong infrastructure such as super fast Wi-Fi.

Looking for business opportunities in Latvia? It could be worth knowing about the fastest-growing sectors in the country, as well as those that contribute most to the Latvian economy. Let’s take a look:

• Processed foods¹
• Processed wood products¹
• Textiles¹
• Processed metals¹
• Knowledge-intensive bioeconomy²
• Biomedicine, medical technologies and pharmacy²
• Smart energy and mobility²
• ICT and Smart city²
• Photonics, smart materials, technologies and engineering²

As for the business culture in Latvia, it is relatively formal and hierarchical, where meetings are kept direct and on-topic (personal matters are rarely discussed in workplace settings).

Most people speak Latvian and/or Russian, but English is spoken by some people - especially in the big cities. It may still be worth brushing up on your Latvian though if you plan to run your business there.

Latvia company formation

To open a business in Latvia, it’s necessary to register with the Latvia business directory. This is called the Commercial Register of Enterprises. You also need to register with the State Revenue Service, and for VAT if applicable.

But before you can do any of that, you’ll need to decide on a legal structure for your new company. The different structures you can choose from in Latvia include the following:

• Limited Liability Company
• Joint Stock Company
• Branch
• Sole Proprietorship
• Partnership

We’ll run through each in a little more detail below.

Limited Liability Company³

The most common business type in Latvia, an LLC (known as an SIA in Latvia) has at least 1 director (of any nationality) and 1 shareholder. The minimum share capital required is €2,800 EUR, and at least half of this must be deposited upon registration.

Joint Stock Company³

A Joint Stock Company or AS in Latvia can be set up publicly or privately. If public, the company will be listed on the stock exchange. The company can be established with 1 director (of any nationality) and 1 shareholder. If publicly listed though, at least 3 appointed directors are required. The minimum share capital required is €35,000 EUR.

Branch³

A branch office is a Latvian hub for a foreign parent company based in another country. This company is liable for the debts and obligations of the business.

Sole Proprietorship⁴

Set up and run by just one person, a Sole Proprietorship is one of the simplest business models in Latvia. It must be registered in the Commercial Register if the annual turnover is above €284,600 EUR or the company has more than 5 employees.

Partnership⁵

A Partnership can be one of two types - general or limited. Both require at least two partners sharing common business goals, who share the profits and duties for the company.

A general partnership requires all members to be fully liable for the business. In a limited partnership, there is a general partner who is fully liable for the company’s obligations, and a limited partner who is only liable to the extent of their investment.

Starting business in Latvia - Step-by-step

To open a business in Latvia, you need to follow these steps:⁵

1. Choose a legal structure for your business
2. Prepare your documents, including drawing up the deeds of incorporation
3. Visit a registered notary to have your documents notarised
4. Open a bank account in Latvia, and deposit the minimum share capital (if required for your entity type)
5. Register with the Commercial Register of Enterprises and at the State Revenue Service
6. If you’ll have employees, you’ll also need to register for state social insurance contributions at the State Revenue Service
7. If applicable, register for VAT.

It could also be worth consulting with tax and/or accountancy specialists to ensure your new business will comply with Latvian rules and regulations.

The documents you’ll need for Latvia company formation include the following:⁵

• Registration application from the Trade Register, signed by a Latvian public notary
• Your business charter
• Articles of Association
• Proof that the required share capital has been deposited (if applicable)
• Proof of the company’s registered address
• Proof of payment of the registration fee and state duties (if applicable)
• Details and ID documents for the directors and shareholders of the new company

Company registration in Latvia - FAQs

New to Latvia or starting your very first business? You’re bound to have questions. We’ll tackle some of the most commonly asked questions below, covering everything from fees and costs to business tax.

Is Latvia a business friendly country?

Latvia has many qualities that make it an attractive choice for foreign investors, international companies and startups. This includes access to EU and Scandinavian markets, good infrastructure and a well-educated workforce. Plus, tax policies that are advantageous to businesses.

Is it easy to start a business in Latvia?

It is reasonably straightforward to start a business in Latvia, and the incorporation process is similar to many other countries. If all your documents are in order, it could be pretty quick too - you could have your new business registered in as little time as a week.⁵

How much does it cost to open a company in Latvia?

The registration fee in Latvia is between €450 to €900 EUR, depending on the type of business.⁶

You may also have other fees to pay, such as public notary fees, annual service charges and costs associated with having a registered address in Latvia.

Check below the current conversion rate between GBP and EUR.

Wise Business account is a handy tool for UK business expanding abroad. Once you set up your business in Latvia you can easily convert British Pounds to Euros to hold money on the currency, receive EUR with your account details or set payments like a local. All conversion is done based on the mid-market exchange rate with low and transparent fees.

Get started with Wise Business 🚀

How can a foreigner start a business in Latvia?

If you’re planning to live in Latvia to run your business, you’re likely to need a valid visa and/or a work permit.

But you can also open your Latvian company from abroad, either by registering the company yourself or using a third party consultancy to set up the business on your behalf. All you need is a registered office address in Latvia.

What are the top 3 industries in Latvia?

The most important industries in Latvia are transportation, information technology, and financial services. However, wood and forestry products, food processing, metalworking and light industries are also main contributors to the Latvian economy.⁷

What is the corporate income tax rate in Latvia?

Corporation tax in Latvia is set at 20%. However, there is a reduced rate of 9% for microenterprises, which refers to smaller companies with fewer than 5 employees whose annual turnover is under €100,000 EUR.³

Manage your international company's finances with Wise Business

A Latvian bank account will certainly be useful for your new business. But it’s also worth considering alternatives which could save you time and money when managing your finances internationally.

Open a Wise Business account and you can manage your company’s finances in 40+ currencies all in one place, including EUR, GBP and USD. You’ll be able to pay suppliers and staff in their own currency, as well as receiving payments in multiple currencies.

You can even automate payments using the powerful Wise API to save even more time. See how it works here in our case study.

Wise payments are fast and fully secure (even for large amounts). Best of all, you’ll only pay low, transparent fees and always get the mid-market exchange rate.

This is the rate that banks use to buy and sell currency, and is widely considered the fairest rate you can get. When banks carry out currency conversions on behalf of customers, they usually add a mark-up or margin to the exchange rate. This makes it more expensive for your business, as less of your money reaches your recipient.

It’s quick and easy to open a Wise Business account, with a fully digital application, verification and on-boarding process. Check out the requirements here.

Get started with Wise Business 🚀

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After reading this, you should have a better idea of how Latvia company formation works. We’ve covered the process, documents required, legal entity types and much more. You should be nearly ready to launch your new company - good luck!

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Sources used for this article:

1. Global Edge - Latvia: Economy
2. Invest in Latvia - Key Sectors
3. Healy Consultants - Business entities in Latvia in 2024
4. Multiplier - Sole Proprietorship in Latvia
5. Company Formation Latvia - Company Registration in Latvia
6. OnDemand International - Company Registration In Latvia
7. US Government International Trade Administration - Latvia Market Opportunities

Sources checked on 08-05-2024.