Registering a company in Latvia is an excellent choice for pragmatic people. Registration of a company in Latvia will give you not only business but also obtaining a residence permit in Latvia. And this is a visa-free regime for visiting the countries of the Schengen Union, financial levers and funds of the Eurozone, and the ability to invite relatives to live in Latvia.
According to the Commercial Law in Latvia, businessmen are entitled to conduct business. A merchant is a natural person or a commercial company registered in the commercial register as an individual merchant. Commercial companies are personal (personal) or limited partnerships (companies) and capital companies. Capital companies (previously called “statutory companies”) are limited liability companies (LLC) and joint-stock companies (JSC).
It is not difficult to open a company (company) in Latvia in the form of a limited liability company (abbreviated in Latvian “SIA”). Quite often, to open a business in Europe, one starts with the registration of a company and the opening of an enterprise in Latvia, since compared to other EU countries, the costs of opening and maintaining a company in Latvia will be lower. Below is general information on how to register a company as an SIA in Latvia.
You can register a company in Latvia remotely (i.e. by signing documents in your country and issuing power of attorney to a representative who will be authorized to take actions to open a company in Latvia) or founders/board members can visit Latvia to speed up this process. The founders/board members can significantly save time and money by using qualified electronic signatures accepted by the Latvian Commercial Register.
The are two types of SIA in Latvia:
The minimum share capital of an SIA with full capital is 2,800 euros, at least 50% of which must be paid before registration in cash to a temporary bank; the rest is paid within a year from the date of registration.
The share capital of a small-capital SIA is between 1 and 2,799 euros and must be paid in full before registration. For small capital SIAs, there is no need to open a temporary bank account.
N.B .: SIA members with small capital must create a minimum reserve every year by deducting at least 25% of the net profit for the year, which can be used for the following purposes: increasing the authorized capital, covering the losses indicated in the annual report, covering the losses of the previous financial year.
An SIA with full capital can be established by one or more natural or legal persons. SIA with small capital can only be established by individuals (no more than five). After the establishment of SIA, its founders become its participants (shareholders). For non-residents, there are no restrictions on the establishment and ownership of shares in a Latvian company.
The founders appoint at least one member of the board. A board member can be a founder (member) of an SIA or another person (in a small-capital SIA, only a founder/member of this company can be members of the board). A board member can be a resident or non-resident of Latvia. Board members represent and manage SIA.
The governing bodies of the company are the meeting of members, the board, and the council (if appointed). The meeting of participants makes decisions on the main issues of the company’s activities. The Board carries out the day-to-day management of the company.
The SIA name must not coincide with the name of any person who has already been registered or has applied for registration in the Commercial Register of Latvia and also must not violate the trademark rights valid in the territory of Latvia.
The share capital can be paid for in money or property contribution.
The commercial law contains the minimum list of provisions required to be specified in the company’s articles of association. These are the firm (name) of the company, the size of the share capital and the number of shares, the nominal value of one share, the right of the board members to represent the company together or separately. The statutes of most Latvian companies consist of only such minimal information and take up no more than one page. The merchant has the right to indicate in the charter any other provisions at his discretion, which should not contradict the peremptory norms of the Commercial Law.
SIA must have a registered address in Latvia, which will be used for official communication. To register, you must confirm the owner of the premises.
The true beneficiary (beneficiary) (TRS). IVPs are individuals who directly or indirectly own or control more than 25% of the shares in SIA. The TRS and details of how they control the SIA must be disclosed and recorded.
SIA is considered to be registered in the taxpayer status simultaneously with the registration of the company in the Commercial Register of Latvia. An application for a value-added taxpayer number (VAT number) can be submitted simultaneously with the filing of an application for registration of an SIA.