Notes about Latvian company registration
Companies in Latvian have been a popular choice for international investors for many years. Please see below some notes about Latvian company registration process, accounting and bank requirements.
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Company registration can be performed remotely. The Directors (Member of the Board) and Shareholders must sign in front of the Notary corporate forms.
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Note that all Latvian companies must file tax reports through Electronic Declaration System (EDS). The Director must personally come to Latvia in order to get registered for the Electronic Declaration System.
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All Latvian companies must maintain Beneficial Owners Register at the Register of Enterprises. The Register is publicly accessible by any 3rd party.
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Annual Financial Statements are filed once a year for the fiscal period normally ending by December 31st. The Annual Report must be filed not later than April 30th.
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Audit of the Annual Report is compulsory only when certain criteria are met. A Company must assign a certified auditor if one that meets 2 of the following 3 criteria:
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turnover greater than €800,000
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tangible assets greater than €400,00
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more than 25 employees.
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VAT declarations are filed either monthly, or quarterly or bi-annually by the 15th day of the month.
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The Company must register for VAT as soon as its turnover reaches EUR 40000. Companies with non-resident directors are often requested to visit the Tax Office personally for VAT registration.
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The company must employ at least one employee for a full time job. This requirement comes from the Latvian legislation, whereas all companies which reach turnover of EUR 10000 must pay salary taxes for at least one minimum salary. However, An Employee requirement is also imposed by the Latvian banks.
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Another requirement of the Latvian bank is rented office in Latvia. Thus all companies registered in Latvia must have (own or rent) physical place of business in Latvia.
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As of 2018 Latvia introduce new Corporate Income Tax regime: Company profit is not be taxed until it is distributed to dividends. The tax rate is calculated at 20/80 or 20% to brutto profit. For example: you decided to pay €10 000 as dividends. 10 000 / 0.8 *20% = 2500. Effective tax is: €2500.