Understanding Company Registration in Latvia

Latvia offers a welcoming environment for foreign investors, providing equal treatment for both legal entities and individuals. The country permits various business structures, including Limited Liability Companies (SIA), Joint Stock Companies (AS), partnerships, sole proprietorships, and the establishment of branches or representative offices.

Limited Liability Company (SIA)

The SIA is a popular choice for small to medium-sized enterprises. Its share capital equals the total nominal value of shares, which are not publicly traded. An SIA can be formed by one or more individuals or legal entities. A single shareholder can also serve as the sole board member and employee. While shareholders don't need to reside permanently in Latvia, the company's registered address must be within the country.

Key requirements for establishing an SIA include:

Minimum share capital of €2,800
Founders can be natural persons or legal entities
Capital contributions can be made in cash or property

Essential documentation includes the KR4 application form, articles of association, and proof of capital payment. All documents must be submitted in Latvian. The registration process typically takes 1-3 business days, with state fees starting at €75.

Joint Stock Company (AS)

An AS is suitable for larger enterprises considering public offerings. The minimum share capital requirement is €25,000, with share values not falling below €0.10. Higher capital requirements apply to banks, insurance companies, and currency exchange businesses. An AS is governed by three bodies: the shareholders' meeting, the supervisory board, and the management board.

Registration follows similar timelines and fees as SIA formations, with electronic submission options available.

Partnership Structures

Latvian law recognizes two partnership types: general partnerships and limited partnerships. General partners bear unlimited liability for partnership debts, while limited partners' liability is restricted to their capital contributions. No minimum capital requirement exists for partnerships.

Registration fees range from €150 for standard processing (3 days) to €450 for expedited service (1 day).

Sole Proprietorships

Natural persons must register as sole proprietors if they meet specific criteria, including annual turnover exceeding €284,600 or employing more than five people with turnover above €28,500. Registration costs €30 and typically completes within 1-3 business days.

Branches and Representative Offices

Foreign companies can establish branches in Latvia, which operate as organizationally independent units without separate legal personality. The parent company assumes full responsibility for branch activities. Representative offices have more limited functions, focusing on market research and promotional activities.

Branch registration takes approximately four days with a €28.46 fee, while representative office registration requires about 15 days at the same cost.

Essential Registration Documentation

Successful registration requires preparation of several key documents:

Completed KR4 application form
Articles of association
Identity verification for founders and directors
Proof of registered address
Capital payment evidence
Various consent forms and declarations

Registration Process Overview

The company formation process involves several sequential steps:

Select appropriate business structure
Reserve a unique company name
Secure a legal registered address
Prepare constitutional documents
Submit application to the Enterprise Register
Obtain registration certificate
Open corporate bank account
Complete tax registration

Latvian Corporate Legal Framework

Latvia's commercial legislation provides a robust framework for business operations. The Companies Law governs corporate governance matters, while tax obligations are outlined in the Law on Taxes and Duties. Companies must maintain proper accounting records and comply with annual reporting requirements.

The standard corporate income tax rate is 20%, with value-added tax applying at 21% for most transactions. Companies must register for VAT if annual taxable turnover exceeds €40,000.

Alternative Employment Solutions

For businesses seeking to access Latvian talent without establishing a local entity, SailGlobal offers comprehensive Employer of Record services. This solution enables compliant hiring of Latvian professionals while avoiding the complexities of company registration and ongoing compliance obligations.

Complete Guide to Company Registration in Latvia for Foreign Investors