The registration procedure consists of 5 stages:

1. Choosing a name, collecting, and compiling the necessary documents.

The name of the company cannot duplicate the name already existing in the Register. It is forbidden to use obscene words or ambiguous concepts, as well as the name of state structures and local governments, the words “state” and “self-government”. In this case, the name must necessarily indicate the legal form of the company (SIA). All documents must be in Latvian.

2. Payment of the authorized capital of the company and official payments

It is very easy and quick to pay for the authorized capital of a company in Latvia at any bank. The bank will create a temporary bank account for this, the founder (s) can immediately deposit the authorized capital into it, after which the bank will issue a certificate of the amount contributed.

3. Certification and submission of documents in the Register of Enterprises of Latvia

The following package of documents must be submitted to the Register of Enterprises:

• Application for registration in the prescribed form (includes information about the members of the Board of Directors and the share capital of the company)
• Company charter
• Constituent agreement (decision to establish in the case of one founder)
• Shareholder register
• Confirmation of the contribution of the authorized capital (in the case of property investment – documents confirming the value of such an investment)
• Consent from each member to be elected to the Supervisory Board (if the presence of the Supervisory Board is provided for in the company’s charter)
• Consent to be elected to the Management Board from each member of the Management Board
• Sample signatures of members of the Board
• Notice to the Board of the registered office of the company
• Document confirming the payment of the state fee
• Consent of the owner of the real estate to register the registered address of the company being created (there may be a lease agreement)
• Document confirming payment of the fee for the publication of information in the official print media of Latvia

If any of the founders sign an application for registration through an authorized person – a power of attorney and an attorney’s passport. Application for registration of a company in the Register of Enterprises, Consent for appointment to the Management Board from each member and samples of signatures of members of the Management Board, as well as the Register of Shareholders must be certified by a notary, an official of the Commercial Register or signed with a secure electronic signature using an eID card (only for citizens of Latvia or with a residence permit). After registration, the client receives the following documents:

• Confirmation of registration
• The decision to register a company in the Register of Enterprises
• Certified charter

4. Registration of employees with the State Revenue Service for the payment of compulsory state social insurance contributions

It is mandatory to register with the territorial body of the State Revenue Service for: employers, self-employed persons, domestic workers working for foreign employers, and foreign employees working for foreign employers. The employer registers the employee with the State Revenue Service no later than one day before the person starts work, if the application was submitted in paper format, or no later than an hour before the person starts work if the application is submitted via electronic declaration system. In addition, a person can be registered at any customer service center of the State Revenue Service. In addition, in the process of registering an employee, it is necessary to indicate his profession (position in the company, specialty) by the classification of professions. There is an electronic declaration system to the State Revenue Service, but it is available only for citizens of the Republic of Latvia or persons who have a residence permit in Latvia.

5. Registration with the Tax Authority as a VAT payer

Obligatory registration as a VAT payer is required if the amount of taxable transactions exceeds 50,000 euros, but if the annual turnover does not exceed this amount, registration is voluntary. After successful registration, the company will receive a Registration Decision.

Requirements for authorized capital and shares

• The minimum share capital is EUR 2 800;
• Upon registration, all shares must be signed and at least 50% of the shares must be paid for, and the remaining half within a year from the date of registration;
• If the company is established by no more than five individuals who are also members of the board, and the capital does not exceed EUR 2800, the company is considered an SIA with reduced capital;
• In an SIA with reduced capital, the shareholders will be personally liable for the company’s obligations up to EUR 2,800.
• Each year the company must invest 25% of its profit in the share capital until it reaches the amount of 2800 Euro;
• Capital can be deposited both in cash and in the form of property (except for SIA with reduced capital)
• It is prohibited to issue bearer shares;
• Shares cannot be publicly traded. A shareholder wishing to sell his shares must offer to buy them first to other shareholders of this company.

Management requirements

Executive body – the Management Board, which may include one or more directors;

The maximum number of directors has not been set (for SIAs with reduced capital – maximum 5 directors);

There is no requirement for director’s residency;

Only a natural person can be a director;

A member of the Supervisory Board or the Board of Auditors of the same company cannot be a director;

If the articles of association provide for a Supervisory Board, the Management Board must submit to the Supervisory Board a quarterly report on the company’s activities.

Beneficiary

The beneficiary is the actual owner of the company, who can manage it directly or through a nominee service (through a nominee director or shareholder);

Information about the beneficiary is submitted to the Register of Enterprises, but only law enforcement and regulatory authorities have access to it.

Requirements for shareholders

The shareholders of the company can be both individuals and legal entities (except for SIA with reduced capital);

The shareholders of the company can be both residents and non-residents of Latvia;

The minimum number of shareholders is 1;

Information about shareholders and the share of ownership of each of them is submitted to an open register and is publicly available. Information about shareholders is also indicated in the Register of Shareholders.

Reporting, audit

Provides monthly reporting on VAT, social, and excise taxes;

The company must submit its annual report to the Register of Enterprises and the Tax Office by April 31 of each year;

The tax return is also filed with the tax office, after which the tax on the company’s profit must be paid within 15 days;

The annual report is subject to certification by a licensed auditor if the company meets two of the 3 criteria:

Balance amount – more than 36,600 Euro;

Annual turnover – more than 711 500 Euro

The average number of employees per year – more than 25