Company Registration in Latvia: Types of Companies, Registration Process, Required Documents

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Starting a company in Latvia attracts entrepreneurs from the EU and other countries. The process is clear. Rules are simple. Registration goes through the Register of Enterprises. Everything moves fast when documents are prepared correctly.

Below is a detailed guide covering company types, registration steps, and required documents.

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Types of Companies in Latvia

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Limited Liability Company (SIA)

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The most common structure. Suitable for small and medium businesses. Shareholders are liable only for their contributions.

Benefits:
• Low share capital for small SIA starting from 1 euro.
• Fast registration.
• One founder allowed.
• Flexible structure.

Limitations:
• Small SIA has restrictions: only individuals as founders, up to five members, no dividends during the early period.

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Joint Stock Company (AS)

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Designed for bigger projects.

Key points:
• Share capital from 25,000 euros.
• A Management Board and Supervisory Board are mandatory.
• Suitable for raising investor funds.

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Sole Trader (IK)

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A natural person registered as a commercial operator.

Pros:
• Simple start.
• Quick registration.

Cons:
• Full personal liability.

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Self-Employed Status

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Used by freelancers and service providers. Registered with the State Revenue Service.

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Important Aspects of the Registration Process

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Online Registration

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Documents are submitted via the Latvija.lv portal. Signing goes through eParaksts.

Advantages:
• Fast processing.
• Lower state fees.
• Suitable for remote registration from another country.

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In-Person Registration

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Documents are delivered to the Register of Enterprises or sent by mail.
Useful if no electronic signature is available.

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Legal Address

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Each company must have a valid address in Latvia. The address is used for official communication.
A written consent from the property owner is required.

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Share Capital

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Standard SIA requires at least 2800 euros.
Small SIA starts at 1 euro but must build annual reserves.

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Required Documents

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Application for Registration

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Form KR4 for SIA. It includes:
• Company name.
• Legal address.
• Founder details.
• Board member details.

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Articles of Association

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Defines the company’s internal rules.

Includes:
• Share capital.
• Rights of shareholders.
• Decision-making procedures.
• Profit distribution.

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Founding Agreement or Founding Decision

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Used when the company has several founders.
A single founder prepares a founding decision.

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Consent of the Property Owner

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Confirms the right to use the address.

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Proof of State Fee Payment

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State fees depend on submission method. Online is cheaper.

‍Registration Process

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Step 1. Choose a Name

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The name must be unique. It is checked on the Register of Enterprises website.

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Step 2. Choose the Company Type

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SIA fits most needs.
AS is chosen for larger projects and investor involvement.
IK fits basic commercial activity.

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Step 3. Prepare Documents

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All documents must be in Latvian. Incorrect wording leads to refusals.

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Step 4. Submit Documents

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Submission options:
• Latvija.lv
• In person
• By mail

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Step 5. Receive the Decision

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Online submissions are processed within 1–3 working days.

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Taxes After Registration

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Corporate Income Tax

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Zero percent on retained profit.
Distributed profit is taxed at 20 percent.

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Employment Taxes

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The employer withholds personal income tax and social contributions.

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VAT Registration

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Mandatory if turnover exceeds 40,000 euros per year.
Voluntary registration is possible.

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Opening a Bank Account

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Bank Requirements

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Banks review:
• Business activity.
• Client profile.
• Background of board members.
• Source of funds.

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Fintech Alternatives

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Many companies use:
• Wise Business
• Revolut Business
• Paysera

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Additional Registration Details

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Board Member Registration

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A company must appoint at least one board member.
The person does not need to be a Latvian resident.
The Register checks restrictions for holding the position.

Board members are responsible for:
• Reporting.
• Tax compliance.
• Documentation.
• Contract signing.

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Residence of Founders

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Founders may reside anywhere. Both individuals and legal entities can establish a company.

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Multiple Shareholders

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If several founders participate, they must agree on:
• Share distribution.
• Voting rights.
• Profit allocation.
• Exit procedures.

Clear structure prevents conflicts.

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Company Name Requirements

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Rules

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The name must be:
• Unique.
• Understandable.
• Not misleading.

Names of public institutions are prohibited.

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Availability Check

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Search is performed in the online registry.
Similar names cause delays or refusal.

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Legal Address Requirements

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Real Address

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Official letters and notices arrive at this address.
It is used for communication with state authorities and banks.

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Owner’s Consent

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The owner provides written permission.
The document includes:
• Owner’s details.
• Property information.
• Confirmation of usage rights.

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Share Capital and Formation

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Small SIA

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Share capital starts from 1 euro.
Only natural persons may be founders.
No dividends until reserves are formed.

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Standard SIA

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Capital from 2800 euros.
Permits monetary and non-monetary contributions.
Non-monetary contributions require an expert opinion.

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Capital Contribution

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The contribution is made before or after registration.
A document confirming the payment must be submitted.

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Extended Document Requirements

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Articles of Association

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Cover:
• Business activities.
• Rights and obligations.
• Board powers.
• Meeting procedures.
• Profit distribution rules.

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Founding Decision

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Prepared when there is only one founder.
States the intention to create the company and appoints the board.

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Attachments

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May include:
• Passport copies.
• Signatures.
• Power of attorney for a representative.

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Registration for Non-Residents

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Electronic Identification

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A non-resident uses:
• eParaksts,
• EU eID,
• or a representative in Latvia.

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Representative Services

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The representative submits documents on behalf of the founders.
Founders sign the documents electronically or in advance.

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VAT Registration Requirements

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When VAT Number Is Needed

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Mandatory when annual turnover reaches 40,000 euros.
Voluntary registration helps when working with EU clients.

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Documents for VAT Registration

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The State Revenue Service reviews:
• Planned activities.
• Estimated turnover.
• Future contracts when available.

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Bank Account Details

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Bank Screening

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Banks assess:
• Risk level.
• Beneficial owners.
• Expected transaction volumes.
• Business justification.

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Fintech Platforms

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Useful when a traditional bank requires extra checks.

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Accounting After Registration

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Obligations

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Companies must:
• File annual reports.
• Submit tax returns.
• Record employees.
• Maintain income and expense records.

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Monthly Requirements

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VAT payers file monthly returns.
Late submissions result in penalties.

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Founder and Board Responsibilities

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Responsibilities of Founders

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Founders are responsible for:
• forming share capital,
• approving the Articles,
• appointing the board,
• defining ownership rights.

Their liability ends with the contribution they make, except in cases of intentional misuse.

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Responsibilities of Board Members

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Board members carry operational responsibility. They:
• represent the company,
• sign contracts,
• ensure compliance with laws,
• manage accounting and reporting,
• communicate with authorities.

A board member faces penalties if rules are ignored or documents are not submitted on time.

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Remote Registration

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Electronic Signature Options

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A remote setup works when founders use:
• Latvian eParaksts,
• an EU eID,
• or a representative in Latvia with power of attorney.

Electronic signing shortens processing time and reduces state fees.

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Working Through a Representative

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The representative prepares forms, submits files to the Register, and receives the final documents.
Founders sign the required papers digitally or by notarized signature abroad.

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Industry-Specific Notes

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Companies Providing Services

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Service companies often start with small SIA. This setup allows low initial investment and fast launch.

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Companies Working With EU Clients

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Voluntary VAT registration is common when:
• clients are in other EU states,
• goods or services are billed cross-border.

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Companies Handling Regulated Activities

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Some fields require additional licenses:
• finance,
• transport,
• construction,
• healthcare.

The licensing process goes through the relevant authority after company registration.

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Financial Operations After Registration

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Setting Up Invoicing

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Latvia uses structured invoice rules. Businesses prepare:
• invoice numbers,
• dates,
• service descriptions,
• VAT lines if registered.

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Submitting Reports to the State Revenue Service

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Companies submit:
• monthly employee reports,
• VAT declarations (if registered),
• annual statements.

Reports are submitted through the EDS online platform.

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Using Accounting Software

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Most companies use:
• Tildes Jumis,
• Horizon,
• Zalktis,
• cloud platforms with EDS integration.

These tools help avoid mistakes and prepare declarations on time.

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Annual Obligations

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Annual Report

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Every SIA submits an annual report to the State Revenue Service.
It includes:
• balance sheet,
• profit and loss statement,
• notes on the company’s activity.

The deadline depends on company size.

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Corporate Governance Updates

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Changes involving:
• address,
• board members,
• share capital,
• shareholders

must be filed with the Register of Enterprises.

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Audit Requirements

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An audit becomes necessary when certain thresholds are reached:
• turnover,
• number of employees,
• total assets.

Small SIA normally does not need audits.

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Practical Tips for New Companies

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Choose a Clear Business Model

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A short written outline helps with:
• bank onboarding,
• VAT registration,
• risk assessment.

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Avoid Common Mistakes

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Frequent issues include:
• incorrect legal address,
• missing signatures,
• outdated document templates,
• unclear capital structure.

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Use Electronic Channels

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Online submission reduces:
• processing time,
• state fees,
• paperwork.

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Keep Documents Consistent

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Names, addresses, and roles must match across all documents.
Any mismatch causes delays.

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Bank Account Challenges and Solutions

What Banks Look For

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Banks check:
• founders’ background,
• business purpose,
• planned transactions,
• source of funds.

Clear answers reduce risk of rejection.

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When a Bank Hesitates

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A company can start with:
• Wise Business,
• Revolut Business,
• Paysera.

These services are suitable for invoices, payments, and daily operations.

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Switching to a Local Bank Later

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After operations grow and transactions stabilize, companies apply again to Latvian banks with stronger evidence of activity.

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Employment and Payroll

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Hiring Employees

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A company registers employees in the State Revenue Service system before work begins.
The employer reports:
• positions,
• salaries,
• contributions.

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Payroll Taxes

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Taxes include:
• social contributions,
• personal income tax.

These are paid monthly.

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Employment Contracts

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Contracts must include:
• job duties,
• working hours,
• salary terms,
• probation rules.

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Expanding Operations

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Opening Branches

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Companies may open branches in:
• Riga,
• other Latvian cities,
• other EU countries.

Branches must be registered in each location where they operate.

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Working Internationally

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Latvia is a member of the EU.
Companies receive full access to:
• EU markets,
• cross-border services,
• simplified trade rules.

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Adding New Business Activities

If activities change, the company updates information in the Register.

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Exit and Restructuring

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Changing Shareholders

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Shares can be transferred by signing a share transfer agreement.
Changes are then submitted to the Register.

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Increasing or Reducing Share Capital

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Companies adjust capital to match business growth and financial needs.

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Merging or Liquidating

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If a business stops operations, the company starts liquidation.
A liquidator is appointed, and debts are settled before closure.

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Frequently Asked Questions

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1. How long does registration take
Online registration takes one to three working days.

2. Do founders need to be in Latvia
No. Remote setup works with an electronic signature.

3. Is a legal address required
Yes. It is mandatory for all company types.

4. When does VAT registration become mandatory
When annual turnover reaches 40,000 euros.

5. Is accounting required from the first day
Yes. All companies must keep financial records from the start.