Advantages of a Latvia company

A Latvia company is an excellent tool to conduct your international business in a tax-efficient manner. This article describes the advantages of using a company in Latvia and the recommended business activities. Furthermore, the article outlines the registration procedure and other useful information. We trust that the article will help you to determine whether a Latvia company may bring value to your business and assist you in the Latvian company formation.

Preparation and submission of registration documents

Register of companies in Latvia is maintained by Latvian Enterprise Register. Like all other state institutions in Latvia, Latvian Enterprise Register accepts documents only in Latvian. Therefore, most likely you will need to use professional services of a law office or a company that specialises on company registration and accounting services. There are many law offices and specialised company registration companies in Russia that offer services on company registration in Latvia, but, as you understand, they are only middlemen in this process. Therefore, if you are not opening a company in Latvia as a part of a complicated corporate setup, it will be cheaper to contact directly a Latvian company. Most companies like ours can communicate in Russian and English.

Choice of way of signing registration documents

Signatures on part of registration documents should be approved by a sworn notaty. You can sign documents by personally coming in Latvia, or do it in front of a notary in Russia. In the latter case, we (or another company that you will entrust to assist you in opening a company in Latvia) will receive from you the approved documents by mail and will translate to Latvian the approval text of the Russian notary.

Choice of the company’s legal form

As in other countries, there are different legal forms of business registration. In most cases, the most approprate legal form for you will be a limited liability company, in Latvia – SIA. Further, this article will refer to SIA, i.e., limited liability companies.

Choice of share capital amount and way of its payment

As a part of company registration document package a share capital payment notification needs to be submitted. Minimal share capital for a limited liability company in Latvia is EUR 2,800. Share capital can be either paid in fully before submission of the registration documents, or 50% can be paid before the documents submission, and the remaining 50 percent can be paid during one year after the company registration.

As a private person you can open a limited liability company with diminished share capital. Its amount can be as low as EUR 1. In this case there is no need to open a temporary bank account and pay in to it the share capital.

In some cases you may need to register a company with full share capital. For instance, this is necessary if you want to use the company for obtaining a residence permit in Latvia.

If you decided to open a company with full share capital, it is necessary to open a temporary bank account in a Latvian bank and pay into it the share capital amount. You can open the temporary account personally, or this can be done by our specialist based on Power of Attorney. It is necessary to get from the a letter confirming payment of share capital. Such letter banks issue immediately after the receipt of money.

Choice of legal address

Like in most countries, in Latvia every company needs to have a registered address that is included in application for company registration, i.e., legal address. In Latvia, property owner’s legal consent is required for using the property as a legal address. Most of the companies that provide company registration services in Latvia, us included, provide legal address rent.

When choosing a legal address, it is important to make sure that you can promptly receive official mail addressed to your company that will be mailed to that address. It is important for obtaining VAT number. Also, in future, if you miss an important mail from state institutions, banks or creditors, your company may face problems.

Choice of the name for your company

Sometimes it is hard to choose a good name for a company. We will not stop at this topic in this article. From legal point of view it is important to know, that the name of a Latvian company should meet the following requirements:

the name should comprise of letters of Latvian or latin alphabet;
the name should not repeat or be similar to names of already registered companies;
the name should not contain specific words, e.g., Latvian Republic, bank, etc.
Choice of registering as VAT payer

Most likely, it will registration as VAT payer will be for your benefit or even obligatory. Application for the company registration as VAT payer can be submitted together with company registration documents.

Submission of registration documents

After all the documents are prepared and duly signed, the company that will help you with company registration in Latvia will submit the documents to the Latvian Enterprise Register.

Usually, the Enterprise Register takes decision on company registration during 3 working days. In practice this means that if you submit the documents on Monday, the company will be registered on Friday.

There is also an urgent company registration procedure during 1 working day. In this case, a higher state duty needs to be paid. Uder the urgnet registration procedure, if the documents are submitted on Monday, the company will be registered on Wednesday.

Opening bank account

If you chose to register a company with normal share capital, before submission of the registration documents you will need to open a temporary bank account and pay in share capital. After the company is registered, you will need to go to the bank in order to transform the temporary bank account into ordinary current account and receive codes for remote access to internet-bank.

How we can help you

If you are considering forming a business or you need expert help with company registration in Latvia, MagickFormations™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.

Please use our Formation Wizard if you would like to set up your registered company in Latvia or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at connect@magickgroup.com