--- canonical: "https://euincnow.com/company-formation-latvia" dateModified: "2026-10-11" --- # Company Formation in Latvia: Types, Taxes and Costs Forming a company in Latvia takes about one to three business days, with the private limited company (SIA) the standard vehicle, registered online through the Register of Enterprises. The SIA needs EUR 2,800 of capital (or as little as EUR 1 for a reduced-capital micro SIA), allows 100% foreign ownership with no resident-director requirement, and benefits from a distributed-profit tax that charges 0% on reinvested profit and 20% only on payout. Standard VAT is 21%. ## Latvia at a glance - Latvia is an EU member state with its own national company forms and registration rules. Compare company types, capital, tax, timing and signing requirements before you choose. The proposed 28th Regime (EU Inc) is a separate option that is not available yet. ### Company types in Latvia - SIA (Sabiedriba ar ierobezotu atbildibu) The most common private limited company. Standard minimum capital EUR 2,800; a reduced-capital micro SIA can be formed from EUR 1 if it has no more than 5 founders who are all natural persons and directors. 100% foreign ownership allowed. - AS (Akciju sabiedriba) Joint-stock (public) company for larger businesses or outside investors; shares can be listed. Minimum capital EUR 35,000. - IK (individual merchant) Sole trader with no capital requirement but unlimited personal liability, for small one-person businesses. * Company formation in Latvia: key facts (last reviewed July 2026) - Corporate tax Latvia generally defers corporate tax on retained business profit. The standard distributed-profit rate is 20% on a grossed-up base (20/80). Tax can also arise on deemed distributions and specified non-business expenses, not only dividends. From 1 January 2026, a company whose participants are all individuals may elect the alternative 15% corporate rate on dividends, calculated using the 0.85 coefficient, together with 6% personal income tax on the dividend. Check eligibility and the treatment of each payment with an accountant. - VAT rate Standard VAT is 21%, with reduced rates of 12% and 5%. The domestic VAT registration threshold is EUR 50,000 of taxable turnover per year. - Dividends & payroll taxes Under the standard corporate distribution regime, qualifying dividends may be exempt from Latvian personal income tax. Under the optional 2026 regime for companies owned only by individuals, dividends taxed at the alternative 15% corporate rate also carry 6% personal income tax. Salaries face progressive personal income tax and employer social contributions of roughly 23.6%. - Minimum share capital Standard SIA minimum capital is EUR 2,800, with at least half typically paid before registration. A reduced-capital micro SIA can be formed from EUR 1 (up to EUR 2,799) if it has no more than 5 natural-person founders who all serve as directors. An AS requires EUR 35,000. - Setup time Registration through the Register of Enterprises usually takes about 1 to 3 business days once documents are ready, or 1 working day for a higher fee. Arranging apostilled documents and a bank account can extend this for non-residents. - Remote setup Yes. Incorporation can be completed fully online with a Latvian qualified e-signature (eParaksts), or remotely via a notarised and apostilled power of attorney, so physical presence is not required. - Director / residency No residency requirement. An SIA needs at least one board member who is a natural person; directors and shareholders may be non-residents of any nationality, and 100% foreign ownership is allowed. A registered Latvian address is mandatory. - Banking options Traditional banks (Swedbank, SEB, Citadele, Luminor) have strict checks and may take weeks. The temporary share-capital deposit must sit at a Latvian bank or licensed payment institution; fintechs such as Wise and Revolut Business are used for day-to-day operations. * Latvia has applied a 0% tax on reinvested profit since 2018, so cash flow is not taxed until profit leaves the company. A eurozone and Schengen member with full EU single-market access. From 2026 individually owned companies can elect a 15% corporate tax plus 6% dividend regime. A startup visa is available to non-EU founders. ## How to register a company in Latvia - Step by step, this is how a Latvia formation actually runs: 1. **Choose standard or micro capital.** A standard SIA has EUR 2,800 capital; the reduced-capital variant starts from EUR 1 with profit-retention rules until capital is built up. 2. **Prepare and sign documents.** Sign online with a Latvian eParaksts e-signature, or remotely via a notarised and apostilled power of attorney. 3. **Deposit the capital.** For a standard SIA the capital is paid before registration, with a bank or payment-institution confirmation. 4. **File with the Register of Enterprises.** Registration usually completes in 1 to 3 business days. 5. **Tax and VAT registration.** Register with the State Revenue Service (VID); VAT registration applies above EUR 50,000 of domestic turnover or for EU trade. ## What company formation in Latvia costs - State fees are modest, roughly EUR 75 to 150 depending on the route and speed, plus notarisation and translation if you use a power of attorney. A registered address service costs about EUR 100 to 300 a year. Accounting for a small SIA generally runs EUR 70 to 200 a month. ## Who can form a company in Latvia - Check ownership eligibility separately from director, local-address and licensing requirements. Permission to own shares does not automatically give you permission to live or work in Latvia. The director and residency information above identifies the main formation conditions to review. - Latvia fits founders who like the Estonian 0%-on-reinvested-profit model but want a cheaper capital route into it, plus businesses trading in the Baltics. e-Residency-style remote living is less polished than Estonia's, so fully remote non-EU founders usually go through a power of attorney and a local provider. ## After registration: what Latvia expects each year - The annual report is filed electronically with the State Revenue Service, generally within four months of year end for small companies. Corporate tax is declared for the relevant taxable periods, including applicable distributions or deemed distributions. Check declarations for the optional 2026 dividend regime separately. Small companies avoid audit below thresholds. ## Latvia and the 28th Regime (EU Inc) - EU Inc, the proposed 28th Regime, would add a harmonised company form in EU member states. Registration is not open and no launch date is confirmed. A national company in Latvia is available under existing rules, but a later EU Inc conversion would depend on the adopted law and eligibility. Read how to prepare an EU Inc company, or compare current options in company formation in Europe. ## Sources and review scope - Use the linked registries, authorities and specialist references to check the requirements for your company. A review of formation costs and filings does not replace a review of your tax position. ### Topics checked - These dates apply to the named topics. Other figures and indicative service prices have separate review needs. * **Optional dividend corporate tax regime** Checked 11 October 2026. [Source 1][1] * **Individual dividend tax under the optional regime** Checked 11 October 2026. [Source 1][2] * **Deemed distributions and non-business expenses** Checked 11 October 2026. [Source 1][3] ### Reference links - [taxsummaries.pwc.com][4] - [grantthornton.lv][5] - [vid.gov.lv][1] - [vid.gov.lv][2] - [vid.gov.lv][3] ## Frequently asked questions ### Can a foreigner open a company in Latvia? - No residency requirement. An SIA needs at least one board member who is a natural person; directors and shareholders may be non-residents of any nationality, and 100% foreign ownership is allowed. A registered Latvian address is mandatory. ### How long does company formation in Latvia take? - Registration through the Register of Enterprises usually takes about 1 to 3 business days once documents are ready, or 1 working day for a higher fee. Arranging apostilled documents and a bank account can extend this for non-residents. ### What corporate tax does a company in Latvia pay? - The headline summary is 0% retained; 20% distribution (optional 15% + 6%), with standard VAT of 21%. Company form, activity, size and where the business operates can change the treatment. Read the detailed tax information and confirm the rules for your case. ### Can I form a company in Latvia remotely? - Yes. Incorporation can be completed fully online with a Latvian qualified e-signature (eParaksts), or remotely via a notarised and apostilled power of attorney, so physical presence is not required. ## Source URLs [1]: https://www.vid.gov.lv/lv/media/33449/download?attachment= [2]: https://www.vid.gov.lv/lv/media/26778/download?attachment= [3]: https://www.vid.gov.lv/lv/uznemumu-ienakuma-nodoklis [4]: https://taxsummaries.pwc.com/latvia/corporate/taxes-on-corporate-income [5]: https://www.grantthornton.lv/en/insights/key-tax-rates-in-latvia-2025/