Company formation in Latvia — a European structure for international business
Latvia suits entrepreneurs working with EU clients and partners and developing IT projects, international trade or logistics. You receive a Latvian SIA that can settle in euros and retain profits in the business without corporate tax until distribution.
The KRYNO team supports the process from structure selection and document preparation to account opening, VAT registration and ongoing reporting.
Latvia suits entrepreneurs working with EU clients and partners and developing IT projects, international trade or logistics. You receive a Latvian SIA that can settle in euros and retain profits in the business without corporate tax until distribution.
The KRYNO team supports the process from structure selection and document preparation to account opening, VAT registration and ongoing reporting.
- 3–7 days
- 0% tax
- free 30-minute consultation
- 3–7 days
- 0% tax
- free 30-minute consultation
Facts about forming a companies in Latvia
Legal entity type
Minimum share capital
€2,800 for a standard SIA; €1 to €2,799 for a reduced-capital SIA, subject to prescribed restrictions
Formation timeframe
Approximately 3–7 business days, including preparation and filing; the Enterprise Register’s official review period is 1–3 business days.
Corporate income tax
0% on reinvested profit; 20% of the grossed-up tax base upon actual or deemed profit distribution, effectively 25% of the net dividend amount.
VAT
The standard rate is 21%; registration is mandatory after €50,000 in turnover, although certain transactions require VAT earlier.
Personal presence in the country
Generally not required if documents are signed with a qualified electronic signature recognised in Latvia or duly certified.
Languages used for documentation
Latvian; documents in other languages are submitted with a translation if required by the register or another institution.
EU / Schengen Area member
Yes / Yes
Why entrepreneurs choose Latvia for company formation
A standard SIA requires €2,800 in share capital. The law also allows a reduced-capital company with €1 to €2,799. This format has restrictions on the number and status of founders, the management board and owners' participation in other reduced-capital companies. It is not suitable for every business but can reduce initial costs for a small project with a simple structure.
A Latvian company pays no corporate tax on profits retained and used for business growth. Tax arises when dividends are paid or expenses are treated as profit distributions. Funds can therefore be used for marketing, hiring, product development or equipment without prior corporate tax.
An SIA is a fully fledged company of an EU Member State. It may contract with European counterparties, obtain a VAT number, settle in euros and use EU cross-border trade rules. This matters to businesses requiring a legal presence in the European market, not merely a foreign company.
An SIA is similar in legal nature to a Ukrainian LLC. Members' liability is limited to their capital contributions, and the company may have one founder and one board member. Both may be non-residents, but ultimate beneficial owners must be disclosed and a registered office in Latvia provided during incorporation.
Latvia lies between Lithuania and Estonia and has seaports and road and rail links with other EU countries. Latvian companies are therefore often considered for international trade, logistics, import, export and distribution. For businesses targeting the Baltic or Northern European markets, this may be more practical than a jurisdiction far from the core market.
Company formation in Latvia — who this solution is for
IT companies and SaaS projects
A Latvian SIA suits teams developing software, selling SaaS products or providing IT services to EU clients. Profit may be retained and used for product development, hiring and marketing without corporate tax until distribution.
Agencies and B2B contractors
Marketing, design and consulting agencies can use a Latvian company to contract with European clients and settle in euros. Where required, the company registers for VAT and follows EU service taxation rules.
E-commerce businesses
A Latvian company may sell through Shopify, Amazon, Etsy and its own online store. Before launch, determine where goods will be stored, where customers are located and whether VAT registration or the OSS scheme is required.
International trading companies
Latvia can serve as a base for importing, exporting and selling goods in Europe. A company can obtain VAT and EORI numbers, operate under EU customs rules and contract with European suppliers.
Logistics and transport projects
The jurisdiction suits freight, warehousing or distribution businesses in the Baltics. Certain transport activities require licences, permits and an actual presence, so regulatory requirements should be checked before incorporation.
Entrepreneurs planning to reinvest profits
Latvia’s tax model suits companies that do not plan to distribute all earned profits immediately. If funds remain in the business, corporate tax is not paid until distribution or use for non-business expenses.
When company formation in Latvia may be not the best solution
If you distribute all profits regularly
The 0% advantage applies only to profits retained in the company. A Latvian company pays corporate tax when dividends are distributed. If the owner plans to withdraw almost all profit monthly or quarterly, the actual tax burden should be compared with Cyprus, Georgia or other jurisdictions.
If you need a company without regular administration
An SIA must keep accounts and file annual financial statements even if it pays no dividends or has minimal activity. A VAT number, employees or related-party transactions increase reporting obligations.
If the entire business actually operates in another country
Incorporating an SIA does not by itself move the business's tax presence to Latvia. If its team, office, management, warehouse and clients are in another state, a permanent establishment may arise there or the company may be treated as its tax resident. Incorporating closer to the place of actual operations may then be more appropriate.
If confidentiality is critical to you
Latvia follows European transparency and ultimate beneficial owner disclosure rules. Some information about the company, its officers and corporate documents is available through the public register. The jurisdiction is therefore unsuitable for structures intended to conceal the owner or actual control.
How the formation process works companies in Latvia
Consultation and needs analysis
KRYNO determines what the company will do, where clients, the team and counterparties will be located, how funds will be received and whether dividends are planned. We check whether Latvia suits the business model and which tax obligations may arise in Ukraine and elsewhere.
Selecting the company structure
We define the founders and management board, share capital and management procedure. Most international projects use a standard SIA with €2,800 in capital. A reduced-capital company from €1 may be formed only if special requirements are met, so we separately check whether the client's structure qualifies.
Checking the name and registered office
We check whether the chosen name is available and complies with Latvian law. We also help arrange a registered office in Latvia. It is used for official correspondence and must be able to receive notices from public authorities.
Preparing corporate documents
The KRYNO team prepares the incorporation resolution or agreement, Articles of Association, register of members, application to the Enterprise Register and ultimate beneficial owner details. Documents are prepared in Latvian. If a founder signs outside Latvia, we determine the proper signing and certification method.
Contributing share capital
A standard SIA requires €2,800 in share capital. The method of evidencing the contribution depends on the company structure and registration procedure. Separate rules on founders, management and future capital increases apply to a reduced-capital SIA.
Company formation
We file the document package with the Latvian Enterprise Register and support its review. The registrar checks the name, constitutional documents, signatures, registered office and beneficial owner information. If there are no objections, the SIA is entered in the Commercial Register and assigned a registration number.
Documents can be filed through the Enterprise Register's online portal. A valid electronic signature is required for electronic filing.
Opening a bank or payment account
We prepare the company for review by describing the business model, funding sources, client geography and projected turnover. We apply to a bank or payment institution that serves the relevant activity. The institution makes the final decision after its own checks, so the account-opening timeframe is separate from SIA registration.
VAT, accounting and post-registration support
We check whether mandatory or voluntary VAT registration, an EORI number or the OSS scheme is required. We help arrange accounting, tax reporting and communication with Latvian authorities. For Ukrainian residents, we separately assess potential CFC notification and reporting obligations.
Cost of company formation in Latvia
The cost depends on the number of founders, SIA type, signing method, registered office, need for VAT registration and complexity of bank checks. Accounting services, licences and support with CFC reporting in Ukraine are priced separately.
During the consultation, you will receive a personalised formation plan and an exact cost estimate for your situation.
- Quick response
- No obligation
- Confidential
- Quick response
- No obligation
- Confidential
Documents required for formation companies in Latvia
International passport
Required to verify the identity of the founder, board member and ultimate beneficial owner.
Proof of residential address
A bank statement, utility bill or another proof of residential address issued within the last 3 months.
Information about the company's activities
A brief description of company activities, countries of operation, key counterparties, income sources and expected turnover.
Ownership structure details
Information on direct and indirect owners, their interests and the persons who will actually control the company must be provided.
Corporate founder documents
If the founder is a legal entity, its registration documents and ownership structure information will be required.
Company name options
We recommend preparing 2–3 options in case the first name is already registered or does not meet the register’s requirements.
Common mistakes when company formation in Latvia
- Mistake
Choose a reduced-capital SIA solely to save money
A reduced-capital company has statutory restrictions that may complicate business scaling and ownership changes.
- KRYNO solution
Choose a company structure for the business model
KRYNO will analyse your growth plans and help decide whether a reduced-capital SIA is suitable or a standard SIA should be formed from the outset.
- Mistake
Assume the 0% rate means no taxes at all
Corporate tax arises when dividends are paid and on certain transactions treated as profit distributions.
- KRYNO solution
Calculate the actual tax burden
We analyse the income model, cost structure and profit distribution plans to assess the actual tax burden.
- Mistake
Submit bank documents without preparation
An inadequate document package or unconvincing business model may lead to additional checks or refusal.
- KRYNO solution
Prepare the company for bank checks
KRYNO prepares the document package and business model description and helps select a bank or payment institution matching the company’s activities.
- Mistake
Ignore VAT before trading begins
The duty to register for VAT may arise before the turnover threshold is reached, including when working with EU counterparties.
- KRYNO solution
Check VAT obligations before the first transaction
We analyse counterparty countries, sales format and place of supply of goods or services and determine whether VAT registration or OSS is required.
- Mistake
Incorporate without an accounting plan
Even an inactive company must keep accounts and file reports. Delaying accounting arrangements often causes errors and missed deadlines.
- KRYNO solution
Arrange accounting immediately after incorporation
We help set up document flows, identify required reports and arrange accounting support before active operations begin.
- FAQ
Frequently asked questions about formation companies in Latvia
The cost depends on the SIA type, number of founders, signing method, registered office and additional services. Account opening, VAT registration, accounting and CFC reporting may be charged separately. After the initial consultation, KRYNO prepares an estimate for the specific structure.
The overall process usually takes 3–7 business days after the required information and documents are received. It may take longer if the register requests clarification of beneficial owners, signatures or the registered office. Bank account opening is separate and often takes longer.
In many cases, the company can be formed remotely. Documents must be signed with a qualified electronic signature recognised by Latvian authorities or duly certified. The method depends on citizenship, country of signing and composition of participants.
An SIA may be voluntarily liquidated after settling with creditors, filing reports and fulfilling its tax obligations. The process includes a members' resolution, appointment of a liquidator, notice to creditors and removal from the register. Simply stopping reports is insufficient.
Tax obligations depend on how the owner receives funds: as dividends, salary, board remuneration or contractual payments. Personal tax residence must also be considered. For a Ukrainian resident, Latvian rules should be analysed together with Ukrainian rules.
Profit retained in the company is not subject to corporate tax until distribution. Dividends are taxed at 20% of the grossed-up tax base. The standard VAT rate is 21%, and salary payments may create income tax and social contribution obligations.
No. The owner or board member may remain a tax resident of Ukraine or another country. Company formation does not automatically grant personal tax residence, a residence permit or the right to work permanently in Latvia.
If a Ukrainian resident owns an interest in or actually controls a Latvian company, CFC notification and reporting obligations may arise. Filing depends on the size of the interest, method of control and specific circumstances.
Yes, a standard SIA may have one founder and one board member, including a Latvian non-resident. One person may hold both roles. Ultimate beneficial owner information must be properly disclosed and document-signing requirements met.
A standard SIA has €2,800 in share capital. A reduced-capital company can be created from €1, but restrictions apply to the number and status of founders and management board. Plans to attract partners and investors should be considered before choosing the form.
A full office is not always required, but the company must have a registered office in Latvia that can receive official correspondence. Bank checks, VAT registration or regulated activities may require further evidence of actual presence.
A company may apply for voluntary VAT registration before reaching the threshold. The tax authority may check the business model, planned transactions and ability to conduct genuine activities. A VAT number is therefore not assigned automatically with SIA registration.
No. Each bank independently assesses the company and owners' risks. It may check the source of funds, economic ties to Latvia, payment countries, website, contracts and founder experience. A payment institution in Latvia or another EEA country may sometimes be an alternative.
An ordinary SIA is not generally required to appoint a Latvian-resident board member. However, no genuine management or activity in the country may affect bank checks, VAT registration and the place of effective management. This should be assessed for the specific business model.
Services you may need after company formation in Latvia
Opening an account abroad
Selection of a bank or payment institution, preparation of review documents and application support.
VAT number in the EU
Analysis of tax obligations, application preparation and VAT registration support for trade and services in the EU.
Reporting and auditing of foreign companies
Organisation of accounting, preparation of annual statements and audit support where required.
EORI number for business
Obtaining an EORI number for importing, exporting and customs clearance of goods in EU countries.
Considering other jurisdictions for your business?
Company formation in Estonia
Suitable for digital and IT businesses that value remote company management through e-Residency.
Company formation in Romania
Suitable for manufacturers, logistics companies and enterprises planning to operate in the EU market.
Company formation in Georgia
An optimal jurisdiction for international business and service exports, with simple administration and competitive tax conditions.
Considering company formation in Latvia? Start with a consultation
- Free consultation on company formation in Latvia
- Response within 1 hour during business hours
- Support from company formation to account opening and obtaining a VAT number
- Free consultation on company formation in Latvia
- Response within 1 hour during business hours
- Support from company formation to account opening and obtaining a VAT number
