Latvia is a great jurisdiction for technology companies incorporation, with various IT business hubs, business incubators and other beneficial aspects which will ensure successful business and IT product development.

Namely, if you re-invest your companies profits, you will never pay corporate tax in Latvia.

Latvia is a great jurisdiction with welcoming business environment, highly skilled workforce, developed business environment and infrastructure.

Nevertheless, as Latvia is member of the European Union, it is a great opportunity to enter the EU market with your business.

For individuals:

• Notarized and apostilled passport copy of all shareholders;
• Notarized and apostilled passport copy of all directors;
• Copy of a recent utility bill not older than three (3) months.

If shareholder is a legal person:

• Notarized and apostilled company extract (visible directors, shareholders, company status, amount of shares and ultimate beneficial owners).

Document preparation instructions:

• Please note that in Republic of Latvia, when forming a company it will be necessary to notarize and legalize/apostille company formation documents.

• Our support team will prepare all relevant documentation and send to you the company formation documents via email. Afterwards, you will need to sign the company formation documents at notary public and either legalize or apostille the documents at your country’s Ministry of Foreign Affairs or embassy, depending on your location.

• After documents will be notarized and legalized/apostilled, you will need to mail the document originals to our mailing address for translations.

•  Tax system 

Even though standard corporate income tax in Latvia is 25%, Latvian corporate income tax follows the cash flow principle. This means if Latvian company keeps the profits (or reinvests them in the company) – 0% tax is payable. The corporate income tax rate is applied on distributed gross dividends, deemed dividends or notional profit. Resident companies in Latvia are generally taxed on their worldwide income. Non-resident companies however are taxed only on their Latvian source income. Both resident and non-resident companies are taxed when a taxable event occurs (pay-out of dividends etc.).

• Business environment

Latvia offers great business possibilities for companies and private entrepreneurs worldwide. Latvia allows to do various businesses, including investments, real estate, woodworking, manufacturing and production, agriculture, pharmacy and others. Currently, Latvia is home for thousands of IT companies from the United States, India, UAE and other countries because of its highly skilled work force, high scale technological unit production and overall internet speed.

• Low business operating costs

Compared to other EU countries, Latvia has low registration and company operation fees. Furthermore, it is relatively easy to set up local office or branch of the company in Latvia, finding highly skilled multilingual employees and cheap office space right in the centre of Riga.

• Reputable jurisdiction

• Corporate income tax: standard rate is 25%. Corporate earnings are not taxed until they are dispersed as dividends or are presumed to be distributed. If taxable event does not occur, company in Latvia pays 0% corporate income tax.
• VAT: standard value added tax rate in Latvia is 21%, with reduced VAT to some products.
• Withholding tax: Generally, there is almost no WHT, with the exception of tax havens. All payments to corporations based in tax havens are subject to a 20% withholding tax. Exemptions apply to goods and assets purchased at market pricing.

For detailed overview of tax system in Latvia and key tax rates we welcome you to read our Ultimate Guide to Tax in Latvia.

Please note that for company incorporation in Latvia our accounting department can take care of all company bookkeeping and audits, as well as consult about financial and tax questions in Latvia.

• No turnover limitations.
• Fast registration.
• No limitations on board members.
• No limitations on shareholders.
• Temporary bank account for share capital deposit is required.
• Bears the abbreviation “SIA”, which translates to LLC.
• Enables possibilities for European Union residence permit.