Starting a company in Latvia: procedures and environment
Latvia ranks in the top 25 of countries easiest to do business in, according to the World Bank Group. Latvia's performance, when it comes to starting a company, is roughly equal to that of the Netherlands, Ireland and Sweden, all highly reputable jurisdictions with developed economic and business environments.
Business starting procedures
On average, opening a company in Latvia requires 4 procedures. Here the word ‘procedure' refers to an interaction with a relevant government agency or another institution, whether it as a Company Register or a bank for opening a corporate bank account in Latvia. Although the precise number if procedures can change depending on the circumstances, generally these are:
- Drafting and certifying all the necessary documents
- Opening a corporate Latvian bank account
- Registering the company and registering for taxes
- Registering employees for state social insurance contributions
It is worth noting that some of these procedures, e.g. state social insurance contributions registration, can be completed online. Latvian company registration procedure, however is not a so called ‘one-stop shop'. This means, that opening a business in Latvia requires interacting with several different institution, and it is not possible to register everything at one place.
Time required to start a business
The time it takes to start a business in Latvia depends on which country you open the company from. If opening a Latvian company from Latvia, on average it takes about 6 business days to do so. If starting a business from other European countries or countries in Central Asia, it may take up to 10 business days. For jurisdictions ranked by OECD (Organisation for Economic Co-operation and Development) as high income countries - about 8 business days.
The longest procedure is usually registering the company and registering for taxes, it takes about 60% the total time required to start a company in Latvia. Drafting the documents and opening a bank account both take approximately 20% of the total time. Registering workers for state social insurance contributions is an online procedure, therefore the time it takes is negligible, as the registration happens on the spot.
Business density
While business density does not affect the business opening procedures directly, it is a reliable indicator for the process. The more businesses there are in the country, the easier it is to start a company, although this does not necessarily mean that low number of companies means more difficult procedures. As of 2016, there are about 14 000 new companies, who have registered just recently. This is roughly equal to a number of newly established firms in Estonia or Denmark. In terms of number of companies per 1000 working-age residents, however, Latvia is one of the most active countries in Europe. Currently (2016), there are approximately 10.6 companies per 1000 working-age residents, which is more than in Germany, France, Italy and many other European countries, being second only to the United Kingdom.
More about company registration in Latvia
To learn more about how to start a business in Latvia, you can refer to this article. Further reference can also be found in the business-related databases of Latvia.
