Company registration: how to start business in Latvia?
Registration with the state registry (Commercial Registry of Republic of Latvia) is mandatory for doing business in Latvia. The Company is considered a legal entity only after registration at the Commercial Registry. Afterwards, the company can legally enter into transactions and run the business.
1. Legal Form of the Company
Prior to establishing an enterprise it is essential to assess and choose the most appropriate type of an undertaking in terms of law and economics. This choice will affect not only the amount of necessary equity capital, but also the legal status of the enterprise and other business related issues.
Foreign entrepreneurs usually register the following types of undertakings:
- limited liability company (SIA);
- joint stock company (AS);
- representative office of foreign merchant
Read more on each of the types in Legal structures and Company types in Latvia page.
Baltic Legal will help to set up business in Latvia or open a branch or representative office. Our lawyers will assist you in preparation of incorporation documents and represent your interests in the competent state authorities.
2. Incorporation documents
- At the very beginning it is necessary to adopt a Decision on foundation. The decision on foundation might be equitable to Memorandum of Association in Western Europe countries.
- Secondly, Articles of Association should be drafted. According to Latvian Commercial Law, Articles of Association is most important document for company`s internal organization perspective which should be in line with the Decision on foundation and following records in the Commercial Register.
- It is necessary to pay the equity capital. The minimum of equity capital is EUR 2850 and it is not required to pay the entire equity capital at the moment of registration; the remaining sum might be paid within one year. Usually the founders open a temporary bank account in order to pay the equity capital. At this stage, the banks frequently ask questions related to the business and expected money flow in the account. Usually it is not problematic for foreigners to open a bank account, though Baltic Legal has supported the clients at this stage if necessary.
3. Business start-up
Business start-up sometimes requires diving more deeply in the proposed business in order to understand the necessity for specific permits, licenses, or registration with competent state authorities.
According to the proposed business area, it might be required to apply at State tax authority (State Revenue Services) and to register as Value Added Tax payer. Baltic Legal suggests to register at Tax Authority at the moment of company establishment. In this case, the paperwork is minimized.
Baltic Legal may assist and draft other documentation necessary for running business in Latvia, for example, to obtain license, certificate or registration before the competent state authorities.
The process of company formation and registration is not considered complex. The registration takes only four business days from the moment all incorporation documents are drafted and submitted with Commercial Registry of Republic of Latvia. The registration time might be reduced up to two business days upon such a request. The registration with other institutions may take from few days up to one month.