Latvia
Set up a Latvia SIA in 1–3 days with 100% foreign ownership. Reinvested profits attract 0% CIT — tax only triggers on dividends.
Foreign Ownership Eligibility
Latvia welcomes 100% foreign-owned companies
Fully remote formation — you never need to set foot in the country.
- 100% foreign ownership permitted in most sectors — no mandatory local partner or resident director required
- No residency requirement for directors or shareholders — a foreign national can be sole owner and sole director
- Minimum EUR 2,800 share capital required for SIA — must be deposited at a Latvian bank before registration
- Registered address in Latvia required — virtual office or registered agent address is acceptable
- Foreign shareholders' documents should be apostilled where required by the registration authority
- Certain regulated sectors (banking, insurance, financial services) require FKTK licensing from the Financial and Capital Market Commission
- Latvia is an EU member state — all EU freedom of establishment rights (Article 49, TFEU) apply to EU/EEA nationals
Ownership
100% Foreign OK
Formation
100% Remote
Note
Physical presence is NOT required for company registration — but IS required for corporate bank account opening at Swedbank and SEB, Latvia's two largest banks. Post-ABLV Bank scrutiny means Latvian banks conduct among the strictest KYC/AML reviews in the EU. Companies without genuine economic substance or Latvian business activities face significant banking obstacles. Plan for 2–6 weeks of bank onboarding or use licensed EMIs (Wise, Paysera) for initial operations.
Tax at a glance
Latvia Tax Overview
0%
CIT on undistributed/retained profits
Latvia's unique distribution-based model (in force since January 1, 2018) — reinvested profits bear zero corporate income tax
20%
CIT on distributed profits (dividends)
Tax base divided by 0.8 and taxed at 20%, making the effective rate 25% on the gross distributed amount
25%
Effective CIT rate on dividend distributions
Grossed-up effective rate when dividends are extracted; higher than Estonia (20%) and Lithuania (15%) on distributions
15%
Optional CIT rate from 2026 (individual-owned companies)
New optional regime where all direct shareholders are individuals: dividends taxed at 15% CIT + 6% PIT, enabling foreign tax credit relief
80%
CIT relief available in Free Port / SEZ zones
Ventspils Free Port, Riga Free Port, Rezekne SEZ, Latgale SEZ, and Liepaja SEZ — up to 80% CIT relief on distributed profits for qualifying companies
21%
Standard VAT rate
Mandatory registration when annual taxable turnover exceeds EUR 50,000; voluntary registration available below threshold
23.59%
Employer social insurance contribution
Employer pays 23.59% of gross salary; employee pays additional 10.5% NSIC contribution; total payroll burden approximately 34%
60+
Double Tax Treaties in force
DTTs with major investment countries reduce withholding tax rates on cross-border dividends, interest, and royalty payments
Pros & cons
Advantages & Considerations
Key Advantages
EU + Eurozone + OECD membership — full EU single market access, Euro currency with no conversion risk for EUR-denominated operations, legal system fully harmonised with EU law including GDPR.
Unique CIT model: 0% on retained/undistributed profits — Latvia is the only EU/Eurozone member where reinvesting profits in the company generates zero corporate income tax. Tax of 20% (effective 25%) applies only when dividends are declared and paid.
Low cost of operations — average monthly gross salary EUR 1,835 (Q3 2025), significantly below Western Europe. Legal and regulatory infrastructure is fully EU-harmonised — Latvian-based teams cost less than equivalent talent in Germany or France while operating under the same EU framework.
Free Port and SEZ CIT relief of up to 80% on distributed profits — companies operating in Ventspils Free Port, Riga Free Port, Rezekne SEZ, Latgale SEZ, or Liepaja SEZ can substantially reduce the already-deferred CIT burden, subject to qualifying investment thresholds.
Riga's tech and IT services sector — Latvia's no-CIT-on-retained-profits model works particularly well for tech companies reinvesting in product development; Riga has an established IT services industry operating under EU legal infrastructure.
Digital government infrastructure — company registration online in 1–3 days via ur.gov.lv; e-tax filing via VID portal; e-government services ranked among the best in the EU. Foreign directors deal with minimal bureaucracy compared to most EU jurisdictions.
Extensive Double Tax Treaty (DTT) network — Latvia has 60+ Double Tax Treaties covering major investment source and destination countries, reducing withholding tax on cross-border dividend, interest, and royalty payments.
EU passporting for financial services — companies licensed in Latvia (banking, insurance, investment services, payment institutions) can passport those services across all EU/EEA member states without additional national licences.
Considerations
Small domestic market — population approximately 1.85 million; GDP USD 45.5 billion (2024). Most businesses will need to export from day one; the Latvian market alone is insufficient for most B2B or B2C strategies.
Strict banking KYC post-ABLV Bank collapse (2018, USD 3.4B in suspicious transactions) — Latvian banks now impose among the strictest AML/KYC compliance in the EU. Non-resident-owned companies, particularly from high-risk jurisdictions, face extended onboarding periods of 2–6 weeks or outright rejection.
Banking practically impossible for shell companies or pure holding structures — Latvian banks (Swedbank, SEB) require proof of genuine economic activity in Latvia. Companies without real Latvian operations, local clients, or economic substance face near-certain banking refusal.
Effective CIT 25% on distributions — while 0% on retained profits is excellent, when dividends are distributed the effective rate (20% / 0.8 = 25%) is higher than both Estonia (20% on distributions) and Lithuania (15%), making Latvia less competitive at the profit-extraction stage.
Small talent pool — Latvia's working-age population has been reduced by sustained emigration; recruiting specialised professionals locally is competitive and can be challenging for fast-growing companies.
Language barrier — Latvian is the official language of all government proceedings, corporate registers, and official documentation. While English is widely spoken in Riga's business community, all official documents and filings are in Latvian.
GDP declined 0.4% in 2024 — Latvia's economic growth has slowed compared to the post-COVID rebound, partly due to trade disruption from Russia's invasion of Ukraine and the loss of Russian transit business through Latvian ports.
Structural Comparison
SIA — Sabiedrība ar ierobežotu atbildību (Private Limited Company)
AS — Akciju sabiedrība (Joint-Stock Company)
Branch of a Foreign Company (Filiāle)
Representative Office (Pārstāvniecība)
Incorporation Process
The process is strictly digital. Each stage builds on the previous one.
Free consultation with XBandGlobal specialists to confirm entity type (standard SIA, Free Port zone registration, or SEZ route), clarify sector restrictions, and agree on realistic costs and timelines.
Search and reserve your preferred company name via the Register of Enterprises (ur.gov.lv) online portal. Name availability is confirmed in real time; reservation is recommended while documents are prepared.
Prepare foundation documents: Articles of Association (self-signed articles are accepted since 2010; notarisation is optional), shareholder and director details, and a registered address in Latvia. Foreign shareholders' documents should be apostilled.
Open a temporary bank account at a Latvian bank (Swedbank, SEB, or Citadele) and deposit the minimum share capital (EUR 2,800 or chosen amount). The bank issues a capital confirmation letter required for registration.
XBandGlobal's Latvia partner submits the registration application to the Register of Enterprises (UR) — online or in person — with the full document package: Articles, bank capital confirmation, shareholder information, and registered address.
What you'll pay
Cost Architecture
Government Fees
Annual Ongoing
Professional Services
SIA registration fees are exceptionally low — EUR 17 for standard, EUR 50 for same-day. The real constraint is not fees but banking: the EUR 2,800 minimum capital must be deposited before registration, and corporate account opening takes 1–3 weeks (or longer) due to Latvia's strict post-ABLV AML compliance. Budget for ongoing accounting and compliance; Latvia has no annual company renewal fee, which is a genuine operational advantage over many jurisdictions.
Still unsure about costs?
These are estimates — your actual cost depends on your structure
Every Latvia setup is different. A 15-minute call with one of our specialists will give you a personalised cost breakdown — completely free.
Fintech & Banking
Can non-residents open accounts without visiting? YES.
Banking options for non-resident founders in Latvia. Remote account opening availability varies by institution.
| Institution | Type | Ease for Non-Residents | Notes |
|---|---|---|---|
| Swedbank Latvia | Major Scandinavian bank | Low (Visit Required) | Largest retail bank in Latvia by deposit base. Strict KYC and AML compliance. In-person account opening required. May decline non-resident companies without genuine Latvian economic activity. |
| SEB Latvia | Major Scandinavian bank | Low (Visit Required) | Strong corporate banking services. Requires proof of genuine business activities in Latvia. In-person account opening required. AML standards consistent with Swedish parent group. |
| Citadele | Latvian private bank | Low (Visit Required) | More open to non-resident directors than the Nordic banks. Limited remote onboarding possible for certain client profiles. Generally more pragmatic on substance requirements for smaller companies. |
| LHV (Estonian bank, Baltic operations) | Baltic bank | Low (Visit Required) | Popular with tech companies and startups in the Baltic region. Good digital banking tools. Estonian parent with strong fintech reputation. In-person required for full account setup. |
| Paysera / Wise Business | EMI (Electronic Money Institution) | High (Remote) | Fully remote onboarding. EUR IBAN available. Useful for initial operations and international payments. Not a licensed bank — cannot hold deposits above EMI limits or provide traditional credit facilities. Suitable as a complement to, not a replacement for, a full bank account. |
| Revolut Business | EMI (Electronic Money Institution) | High (Remote) | EUR IBAN available; fully remote account opening. Multi-currency support useful for international operations. Not suitable as sole banking solution for a Latvian company. Use alongside a full bank account. |
Frequently Asked
Speak with a Latvia specialist
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