Taras Miroshnychenko

Head of practice

E-mail

miroshnychenko@prikhodko.com.ua

Phone numbers

Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.

Opening and supporting a business in Latvia

Why choose Latvia for business?

Latvia is a full member of the Eurozone with its own currency (the euro), which eliminates currency risks for settlements within the EU. Highly favourable conditions have been created here for foreign investors:

Access to the EU market: The opportunity to trade goods and services in the European Union’s internal market with more than 500 million consumers.
Transparent registration: Public services are digitalised, and the company registration process takes only 3–5 working days.
No restrictions for non-residents: Latvian legislation permits 100% foreign ownership without requiring the director to reside in the country.

Legal consultation on business in Latvia

Choosing the legal form

The most common form for small and medium-sized businesses is a limited liability company (Sabiedrība ar ierobežotu atbildību — SIA). This is equivalent to a Ukrainian LLC and ensures that the founders are not personally liable for the company’s obligations with their own assets.

There are two main options for establishing an SIA:
Standard SIA: Requires share capital of €2,800. This is the optimal choice for medium-sized companies and holding structures.
Microenterprise (micro-SIA): Allows a business to be started with capital from as little as €1. This is an ideal option for startups and small businesses, although this form has certain restrictions regarding the number of employees and turnover.

Step-by-step SIA registration procedure in 2026

The business registration process in Latvia is clearly regulated and can be completed either in person or through digital services.

Step 1. Checking and reserving the company name
The company name must be unique and use Latin or Latvian letters. Its availability can be checked online in the public Register of Enterprises of Latvia (UR).
Step 2. Preparation of constitutional documents
The main document is the Articles of Association, which regulate the company’s activities. All documents submitted to the register must be in Latvian or accompanied by a notarised translation.
Step 3. Opening a temporary account and contributing capital
Before registration, a temporary account must be opened with a Latvian bank or fintech institution and the agreed amount of share capital (from €1 to €2,800) must be deposited into it. A bank certificate confirming payment is mandatory for registration.
Step 4. Submission of the application to the Register of Enterprises
The document package (application, articles of association, confirmation of capital payment, consent of board members, registered office) is submitted to the Commercial Register. This can be done online through the e-services portal if an electronic signature is available.
Step 5. Obtaining a registration number and tax registration
Once the application is approved, the company receives a registration number. Registration as a taxpayer with the State Revenue Service (VID) takes place automatically.

It will also be useful: Opening a bank account in Latvia

Main tax changes in 2026: New dividend regime

The most important change in 2026, which makes Latvia even more attractive to individual investors, is the introduction of an alternative dividend taxation regime.

If the company’s shareholders are exclusively individuals (not legal entities), they may choose one of two options:

Traditional regime: Tax rate of 20% (effective rate of 25% of the distributed profit amount).
New alternative regime (from 2026): The company pays 15% corporate income tax (calculated as 15/85 of the net amount), and a further 6% personal income tax (PIT) is withheld when dividends are paid.

Why is this beneficial? It allows non-residents to receive a tax credit in their home country for the amount of PIT paid in Latvia, which is often more advantageous than the standard regime.

It is also worth remembering the zero tax rate on undistributed profits. In Latvia, corporate income tax (CIT) is paid only when profits are distributed (through dividend payments or equivalent expenses). If profits are reinvested in business development, no tax is charged.

Business support: What you need to know after registration

Opening a company is only the first stage. Successful operation in Latvia requires ongoing legal and tax support, which includes:

Transfer pricing reporting: New rules came into force in 2026. If the volume of controlled transactions with related parties exceeds €250,000, a structured report must be submitted to the tax authority.
Thin capitalisation rules: The list of exceptions where interest on loans is not subject to restrictions has been expanded (including loans from crowdfunding platforms and EU investment companies).
Payroll administration: From 2026, the minimum wage in Latvia increased to €780 per month, and the tax-free minimum increased to €550.
VAT: The standard VAT rate is 21%. VAT registration is mandatory once annual turnover reaches €40,000.

Cost of legal services for business in Latvia

Why contact Prikhodko & Partners?

Business registration in Latvia, despite the transparency of the procedure, requires in-depth knowledge of local legislation, language and bureaucratic nuances. Errors at the stage of preparing the articles of association or registration can lead to significant delays.