Doing Business in Latvia (2025): Key Government Sites, Policies, Steps and Practical Tips

This guide summarizes the central Latvian authorities and online resources foreign companies need when establishing operations in Latvia in 2025. It covers company registration, taxation, labor law, and visa/residence procedures, includes concise policy highlights and step-by-step operational guidance, and offers practical precautions to avoid common pitfalls. For tailored HR and relocation support, firms sometimes engage service providers—one example is SailGlobal.

Essential government and departmental websites

The table below lists the most frequently used official sites for foreign investors and employers. Bookmark these pages and consult them regularly for up-to-date forms, electronic services, and legal announcements.

Highlights of relevant policies and interpretations (2025)

• Company form and registration: The most common legal vehicle for foreign investors is a limited liability company (SIA). Registration is done at the Register of Enterprises; documentation and registration procedures are available online. Simplified procedures exist for smaller entities, but the exact requirements (capital, director rules, company statutes) should be verified on UR.
• Corporate tax and VAT: Latvia continues to operate a system that taxes distributed profits; VAT remains a central indirect tax with electronic filing and reporting handled through VID. Thresholds and administrative rules can change—use VID for current rates, registration thresholds, and filing calendars.
• Payroll and social contributions: Employers must register employees with the State Social Insurance Agency (VSAA) and report payroll to VID. Social insurance and payroll tax obligations vary by employment type and residency status; ensure correct classification of employees vs. contractors.
• Employment and hiring of foreign nationals: EU/EEA citizens have the right to work without permits. Non-EU nationals typically require a work permit/residence permit coordinated via PMLP; employers often start the process by documenting the vacancy and submitting an application on behalf of the employee.
• Labor law enforcement: The State Labour Inspectorate enforces working time rules, minimum employment conditions, safety regulations and collective bargaining compliance. Employers should maintain written contracts and records in Latvian or provide translations where needed.
• Cross-border tax and compliance: Latvia adheres to OECD and EU standards on transfer pricing, anti-avoidance measures and information exchange. Companies with international operations must consider double tax treaties and documentation obligations.

Practical step-by-step: Opening a company and starting operations

Step A — Prepare and register your company

1. Decide legal form (commonly SIA) and prepare a business plan and articles of association; determine share capital needs. Consult UR for template statutes and required documents.
2. Reserve a company name and provide a local registered address. Many service firms and accounting providers offer virtual addresses if you don’t yet have premises.
3. Appoint a board/director(s). Check nationality/residency rules for directors; non-residents can serve but local contact information is required.
4. File incorporation documents with the Register of Enterprises (UR). Use their e-services when possible to speed processing.
5. Open a corporate bank account (banks will require KYC documents and may ask for presence of signatories).

Step B — Tax and accounting setup

1. Register for taxes with the State Revenue Service (VID): obtain a tax ID, register as an employer and, if applicable, for VAT. Determine whether voluntary VAT registration is advantageous.
2. Set up payroll and accounting software or outsource to a licensed accountant. Latvia permits electronic filing of returns; quality accounting reduces compliance risk.
3. Understand filing deadlines for CIT, VAT and payroll reports. Register for VID’s electronic declaration system to submit returns online.

Step C — Hiring and employment compliance

1. Draft employment contracts that comply with Latvian labor law (work hours, probation periods, termination rules, annual leave, sick leave, remuneration). Keep contracts in writing.
2. Register employees with VSAA and with VID for payroll tax withholdings. Ensure timely payment of wages and social contributions.
3. If hiring non-EU nationals: check vacancy advertising requirements, apply for work permit/residence permit via PMLP, and manage arrival and registration post-entry.

Step D — Operational readiness and local obligations

1. Obtain any sector-specific licenses or permits (manufacturing, food, financial services, transport). LIAA and relevant ministries publish licensing requirements.
2. Implement workplace health and safety measures per State Labour Inspectorate guidance.
3. Maintain corporate records and minutes at the registered office; be prepared for inspections or document requests from authorities.

Typical cases and interpretations — illustrative examples

Case 1: EU entrepreneur establishing an SIA

An entrepreneur from Germany forms an SIA to provide IT services. Steps taken: name reservation and online registration at UR, tax registration at VID, voluntary VAT registration because annual turnover is expected to exceed the threshold, payroll setup for one local employee, and contracting a local accountant. The company used a local virtual office address initially and transitioned to leased space once revenue stabilized. Lesson: electronic services speed registration, but a capable local accountant reduces errors in VAT and payroll reporting.

Case 2: Non-EU specialist hired by a Latvian company

A Latvian logistics firm recruits a Ukrainian logistics manager. The employer documents the recruitment process, applies for a work-based residence permit via PMLP, registers the employee with VSAA and VID upon arrival, and complies with probation and contract rules under Labor Law. Processing times varied depending on the completeness of submitted documents. Lesson: start visa/residence procedures early and maintain transparent communication with PMLP.

Key Notes (Precautions and best practices)

• Verify current rules on official sites: Rates, thresholds and forms change—rely on UR, VID, PMLP and VDI for authoritative guidance.
• Language and translations: Official filings are often expected in Latvian. Use certified translations where needed and confirm whether an English submission will be accepted.
• Local bank requirements: Banks apply strict KYC checks—prepare corporate documentation, board minutes, proof of business activity and identity documents for beneficial owners.
• Classify workers correctly: Misclassifying employees as contractors can lead to retroactive tax and social security liabilities.
• Maintain accurate payroll records and meet deadlines: Late filings can lead to penalties and enforcement by VID and VSAA.
• GDPR and data protection: Personal data handling must comply with the EU GDPR; payroll and employee records require secure storage and lawful processing bases.
• Plan timelines conservatively: Incorporation, licensing and permit issuance can take weeks to months depending on sector and nationality of personnel.
• Use local expertise: Consider engaging certified accountants, legal counsel and relocation/HR partners (for example, SailGlobal) to reduce administrative friction.

Where to get help

Start with the official portals listed above for forms, e-services and guidance notes. For complex tax structuring, labor disputes, or sector-specific licensing, hire local specialists—law firms, certified auditors and licensed HR consultancies. Many foreign companies combine a local accountant with an international relocation firm to handle immigration, payroll setup and employee onboarding.

Final notes

Latvia remains an attractive base for Baltic and EU operations due to its digital services and relatively straightforward online procedures. Nonetheless, careful preparation, adherence to local filing routines and early engagement with authorities minimize delays and penalties. Use the official links provided as primary references, and engage local professional support for complex matters.