Understand the Jurisdictions Setup Requirement Before Proceed Your Latvia Company Registration
Latvia has a lot of advantages that foreign investors can benefit from. Aside from being strategically positioned in Europe, they also have a free trade policy that makes it a good location for import and export. Foreign investors receive business incentives and they have a friendly business environment. Latvia is popular for having a skilled and multilingual labour force, stable economic situation, natural resources, and great potential for businesses. This shown by the wide range of popular international companies based in Latvia. The Latvia company registration will benefit from their EU membership, which allows the free movement of goods, capital, services, and labour.
Setting up Latvia Company Registration
The first step in opening a company is to register it under the Latvian Commercial Registrar. The Latvian Commercial Code lets foreign investors choose from a couple of companies based on their needs. It is crucial to know that the foreign enterprisers opening companies in Latvia will take advantage of having the same treatment as the local investors. They can also opt to incorporate joint-stock companies, limited liability companies, representative offices or branches. Businessmen that have more flexibility in doing business can also be sole traders in Latvia.
Drawing the decision on the foundation is also an important step, which is the same as the memorandum of association that other European countries have. The next thing that must be done is the drafting of articles of association and then pay a minimum share capital of about EUR 3,000. However, there is flexibility in the Latvian Commercial Law and there is no required whole amount that needs to be paid upon incorporation. After the submission of documents, it will only take less than 5 days to incorporate the company.
Why Set Up a Business in Latvia
The main benefits that come from the strategic position of Latvia and their membership status in a lot of organizations like EU, WTO, and Schengen. That is why Latvia is open to free and open trade in the international market.
An advantage that facilitates the trades is Latvia’s good infrastructure. There are major ports, and coming from Riga’s airport, the planes fly to over 80 destinations around the world. All of them facilitate trades, from Latvia to foreign countries, but to Latvia as well.
The country has a crucial touristic potential and also the services that entrepreneurs provide that are involved in this business are top quality and affordable. Tourism in Latvia has a huge contribution to their GDP.
From 2018, there is a 0% corporate income tax rate that should only be paid when the company is paying dividends or other payments that aim to distribute its profit. The corporate income tax is 20% that should only be paid using the profit share that is disbursed or distributed as dividends or utilized for purposes that are not directly related to developing businesses.
The personal tax rate is 20% annually that does not exceed EUR 20,004.23% for yearly income from EUR 20,005 to 55,000. The annual income that does exceeds EUR 55,000 has a 31.4% tax rate. The income tax rate for individuals coming from their capital and capital gains is at 20%.
The standard VAT rate is only 12% instead of 21%.
You can seek the help of 3E Accounting for assistance in company registration in Latvia, and for customer assistance as well.