Latvia is a country in northeastern Europe, located on the eastern shore of the Baltic Sea. It is bordered by Estonia to the north, Russia to the east, Belarus to the southeast, and Lithuania to the south. The capital and largest city is Riga. Latvia has a population of approximately 1.9 million and the official language is Latvian. The country gained independence from the Soviet Union in 1991 and is now a member of the European Union, the United Nations, and NATO. Latvia’s economy is based on agriculture, forestry, and fishing, as well as manufacturing and services sectors.
The economy of Latvia is considered to be a developed market economy and has been growing steadily in recent years. It is heavily dependent on foreign trade, with exports accounting for around 75% of the country’s GDP. The main exports include wood products, agricultural products, and processed foods. Latvia also has a well-developed transportation infrastructure, with major ports and airports that serve as gateways to the region.
The service sector is the largest contributor to Latvia’s GDP and employs the majority of the country’s workforce. The banking and finance sector is also significant, with several international banks having operations in the country. The manufacturing sector is also important, with particular strengths in the production of wood products, machinery, and electronic equipment.
Types of business structures in Latvia
In Latvia, there are several types of business structures that a company can take on. Some of the most common include:
| S# | Type of company | Local Name | Min. paid-up capital required |
| 1. | Sole Proprietorship | Individual Merchant | No minimum capital required |
| 2. | Partnership | Partnerība | No minimum capital required |
| 3. | Limited Liability Company – LLC | Sabiedrība ar ierobežotu atbildību (SIA) | €2,000 |
| 4. | Joint Stock Company – JSC | Akciju sabiedrība | €25,000 |
Cost involved in registering a company in Latvia
The cost of registering and establishing a company in Latvia can vary depending on the type of business structure and the services required. Below are some approximate costs for the different types of business structures:
Sole proprietorship
The cost of registering a sole proprietorship is relatively low, typically around €20-30 for online registration and €50-60 for notary fees.
Partnership
The cost of registering a partnership is relatively low, typically around €20-30 for online registration and €50-60 for notary fees.
Limited Liability Company (SIA)
The cost of registering an SIA depends on the services required, but typically it can range from €300 to €1000. The cost would include the state fee for registration, notary fees, and legal services.
Joint-Stock Company (AS)
The cost of registering an AS can range between €1000 to €3000. The cost typically includes the state fee for registration, notary fees, legal services and in some cases, the cost of an auditor.
Branch office
The cost of registering a branch office can typically range from €1000 to €3000. The cost includes the state fee for registration, notary fees, legal services, and the cost of an auditor.
Process of registering a company in Latvia
The process for registering a company in Latvia typically involves the following steps:
- Choose a unique company name and have it approved by the Latvian Enterprise Register.
- Prepare the articles of association
- Prepare secondary documents such as declaration of compliance and a statement of the company’s capital.
- Submit the necessary documents to the Latvian Enterprise Register and pay the registration fee.
- Obtain a unique company registration number and VAT number.
- Register for social security and pay taxes.
It’s important to note that this process may vary depending on the type of company you are forming and the specific requirements of the Latvian government. It’s recommended to seek professional advice from a lawyer or accountant to ensure compliance with all necessary regulations.
Benefits & Cost of doing business in Latvia
There are several benefits of doing business in Latvia, including:
Strategic location
Latvia is located at the crossroads of Northern Europe and Eastern Europe, making it an ideal location for businesses looking to expand into new markets.
Low corporate taxes
Latvia has a relatively low corporate tax rate of 15%, which makes it an attractive location for businesses looking to minimize their tax burden.
Skilled workforce
Latvia has a highly educated and skilled workforce, particularly in areas such as IT, engineering, and finance.
Business-friendly environment
Latvia has a business-friendly environment that encourages entrepreneurship and innovation. The country is a member of the European Union, which provides access to a large market of over 500 million consumers.
Strong export focus
Latvia has a strong export focus, and its economy is heavily dependent on exports. This makes it an attractive location for businesses looking to export their products and services.
Good infrastructure
Latvia has a well-developed infrastructure, including an advanced transportation network, modern telecommunications, and a reliable energy supply.
It’s important to note that while Latvia has a lot of benefits, it may not be the best fit for every business and it’s always recommended to seek professional advice and explore the market before making a decision.
Cost of doing business in Latvia
The cost of doing business in Latvia can vary depending on a number of factors, such as the type of business, location, and size of the company. However, some of the general costs associated with doing business in Latvia include:
Company registration fee
The cost for registering a company in Latvia can vary depending on the type of company and the amount of capital being invested. The fee for registering a limited liability company, for example, is around €200.
Office and facility costs
Renting office space and other facilities in Latvia can be relatively inexpensive compared to other European countries. The cost of office space in Riga, the capital, can range from €5 to €20 per square meter per month.
Labor costs
Latvian labor costs are relatively low compared to other European countries. The average monthly salary in Latvia is around €800.
Taxes
Latvia has a relatively low corporate tax rate of 15% and a standard value-added tax (VAT) rate of 21%.
Legal and accounting costs
Legal and accounting fees can vary depending on the complexity of the business and the services required.
Marketing and advertising costs
The costs of marketing and advertising in Latvia can vary depending on the channels being used and the industry sector.
The costs shared above are not fixed and are dependent on various factors such as location, type of business activity, size of the company, and most importantly time factor.
