Latvia, a Baltic hidden treasure, is full of innovative zeal and has been a digital trailblazer for decades. Did you realize that Latvia is responsible for delivering us jeans?
Over the last decade, the country has prospered thanks to a well-educated workforce, low business costs, and well-established infrastructure that allows for large-scale tech innovation and development. With free wifi available throughout Riga, it’s no surprise that the remote-working generation is increasingly choosing Latvia as their starting point. Furthermore, among Latvians, co-working has nearly become a cultural movement — co-working and free wifi everywhere? It’s a startup’s dream come true.
Riga, the capital, is unquestionably a hotbed of startup activity, hosting events like Tech Chill, but other places such as Jurmala and Daugavpils are also getting in on the act. Latvia’s startup ecosystem today numbers over 400 companies, and the country was named one of the most startup-friendly countries in the world in 2021.
Entering the Latvia Market
Foreign companies interested in expanding into Latvia will find one of the strongest industrial sectors in the Baltics, as well as a competent and educated workforce, world-renowned competitive tax benefits, and a variety of growth incentives and cooperation options with the state.
Setting up shop in a foreign location, on the other hand, presents its own set of problems. Foreign companies must adhere to labor, tax, payroll, and corporate laws while also ensuring that their personnel is productive and efficient.
Starting a Business in Latvia
Because of its geographic location, Latvia has international access to a variety of markets in the EU, the Baltics, Russia, and Asia. With a strong infrastructure, a dominant engineering and metalworking industry that accounts for almost 80% of total exports, and high-quality woodworking products, this makes an appealing environment for any business owner looking to expand.
To create a business in Latvia, you must go through a simple company registration process that is designed to be completed quickly. These stages can be completed either online or in-person; however, online registration will necessitate the use of an e-signature known as an eParaksts.
The following are the actions that must be taken to create a business in Latvia:
- Obtaining a physical business address in the area.
- Obtaining any further permits or papers required for the running of the firm.
- Opening a Latvian bank account to deposit the necessary share capital.
- Creating the necessary registration paperwork and having it translated into Latvian or English.
- At a notary’s office, notarizing and legalizing the registration documents.
- Go to the Enterprise Register and register your business, as well as apply for a company tax number.
- Visit the State Revenue Service to obtain a VAT number (only applicable if certain criteria are met).
- Become a member of the State Social Insurance Agency (VSAA).
- Get a tax identification number, a registration certificate, and a unique registration number.
Expanding Business into Latvia
Foreign enterprises interested in expanding into Latvia will be welcomed into a vibrant economy with a large talent pool and low administrative and labor costs, which are available to all companies that enter their market. Because of its location in the Baltics, the country has access to both West and East trade, as well as a formidable infrastructure and a progressive, western-oriented corporate environment.
Latvia has a wealth of natural resources and skilled labor, as seen by its thriving industrial sectors like woodworking, metalworking, and technical manufacture. However, Latvia excels in the areas of transportation and logistics, information technology, energy generation, food production, and creative industries, all of which are eligible for governmental assistance.
While these industries can help offer opportunities for international expansion, they can also be expanded locally in places like Riga, Daugavpils, Liepja, Jelgava, and Jrmala.