Latvia Company Formation
Introduction to registering a company in Latvia.Positioned at the crossroads of northern and eastern Europe, the Baltic state of Latvia is rapidly making the most of its acquired status as a member of the EU since 2004. Foreign investment is rising and government authorities have taken steps to streamline the regulations governing Latvia company formation for non-residents. The range of possible business entities has been reduced from thirteen to five, bringing the commercial landscape more into line with established EU standards. Latvia is a small country with a population of just 2.2 million and has a GDP of $14,140.
Types Of Companies in Latvia
Choosing the right company type is crucial for your business success. At IBHUB, we help you select the structure that suits your goals and complies with latvia regulations.
1.Limited Liability Company (SIA)
- Separate legal entity with limited liability for shareholders.
- Can be established by 1 or more individuals or legal entities.
- Can be owned 100% by foreigners.
- Minimum share capital: Standard SIA: €2,800 Low-Capital SIA (Small Capital Company): From €1, but with certain restrictions.
- Must have a registered office in Latvia.
2.Stock Corporation (AG)
- Suitable for medium to large enterprises and publicly traded companies.
- Can be established by one or more individuals or legal entities.
- Requires a Board of Directors and a Supervisory Council.
- Shares are freely transferable and may be publicly offered or listed.
- Company name must include “AG” to indicate its legal form.
3. Branch office
- Not a separate legal entity – it's part of the foreign parent company.
- Operates under the same name as the parent, possibly translated into Latvian.
- Must be registered in the Latvian Commercial Register.
- Requires a registered address in Latvia.
- Must appoint an authorized representative (manager) in Latvia.
Advantages
1.Limited Liability Company (SIA)
- Strong corporate image and credibility
- Well-suited for medium to large businesses
- Easier to gain trust from banks, partners, and clients
- Flexible ownership structure (single or multiple shareholders)
- Can be converted to a joint-stock company (AG) if needed in the future
2.Joint Stock Company (A/S)
- Limited liability – shareholders are not personally liable beyond their capital contribution.
- Ability to raise capital through public or private share offerings.
- Credibility and trust – ideal for attracting investors, partners, and large clients.
- Option to list on stock exchanges, increasing visibility and access to funding.
- Suitable for holding companies, banks, insurance firms, and large enterprises.
3.Branch office
- No minimum capital required.
- Simplified structure compared to incorporating a separate entity.
- Full control remains with the parent company.
- Ideal for testing the Latvian/EU market before full expansion.
- Can carry out commercial activities, sign contracts, and hire employees.
What are the main features of a branch office?
Setting up a branch office in Latvia offers several advantages for foreign companies looking to expand their operations in the EU. Below are the main features of a Latvian branch office:
Same Tax Rate: A foreign-owned branch is taxed at the same corporate income tax rate as a Latvian company.
Compliance Requirements: Branch offices are subject to the same reporting and audit obligations as local Latvian companies.
Profit Repatriation: Profits can be repatriated to the parent company without any withholding tax.
Dividend Tax: However, dividends transferred abroad may be subject to a 10% withholding tax.
At IB Hub, we guide you through every step of setting up and managing your Latvian branch office—from registration to compliance and tax planning.
How easy is it to recruit staff in Latvia?
Latvia offers a dynamic and motivated workforce, making it relatively easy for foreign companies to recruit local talent. Since gaining independence, Latvia has made significant strides in economic development, supported by a skilled, ambitious, and forward-thinking younger generation.
Key advantages include:
Motivated Workforce: Latvian professionals are known for their adaptability, strong work ethic, and openness to innovation.
Competitive Labour Costs: While gradually increasing, labour costs in Latvia remain lower than in many Western European countries, offering cost-effective hiring options.
Business-Friendly Environment: With simplified employment regulations and access to a growing talent pool, Latvia provides a supportive landscape for international recruitment.
IB Hub can assist you with local hiring strategies, compliance, and payroll solutions to help you build a strong team in Latvia.
Why Choose Latvia for Business – IB Hub
Latvia offers an open, liberal, and investor-friendly environment, making it an attractive destination for international businesses and entrepreneurs. Key highlights include:
Liberal Business Environment: The Latvian government is firmly committed to a free-market economy, encouraging entrepreneurship and foreign investment.
International Integration: Latvia is a member of the World Trade Organization (WTO) and has ratified most major international business treaties, ensuring transparency and global cooperation.
Few Restrictions for Foreign Investors: Foreign nationals can freely purchase Latvian companies and real estate with minimal restrictions, making market entry straightforward.
Favorable Tax Framework:
Resident companies are taxed on their worldwide income.
Non-resident entities are taxed only on income earned within Latvia.
At IB Hub, we provide expert assistance to help you take full advantage of Latvia’s strategic location, stable economy, and business-friendly policies.
Need More Information About Registering a Company in Latvia?
At IB Hub, we simplify the process of company formation in Latvia, offering expert guidance every step of the way. Whether you’re setting up a new business or expanding internationally, our team ensures a smooth and compliant registration process.
Contact us today to learn more about how we can help you establish your company in Latvia quickly and efficiently.