Due to the advantageous geographical location of the country, the presence of a developed banking system, and a low level of taxation, many businessmen from neighboring countries seek to start companies and use the bank system. The advantage of registering Latvia offshore company for most non-residents is the ability to transfer cash flows to the nearest European jurisdiction with a high level of data confidentiality.
Latvia is not a classic offshore; this country is not blacklisted by various international organizations.Atrium Business Solutions
But it should be noted that recently, in accordance with the provisions of the anti-money laundering policy, Latvian banks have significantly tightened the requirements for legal entities where the founders are foreigners.
Ways to register company in Latvia
The founders of legal entities can be individuals and other companies, residents, and non-residents. Moreover, only one participant is enough to create a legal entity as a joint-stock company or LLC in Latvia, while at least two are needed for a full and limited partnership.
The procedure of company formation in Latvia can be divided into the following stages:
- Filling out an application.
- Preparation of constituent documents.
- Formation of the board of the company and, if necessary, the appointment of an auditor.
- Payment of authorized capital by transfer to a bank account.
- Assessment of material contribution (provided that the capital of the company is formed at the expense of the property of the founders)
- Payment of state duty for entering in the Commercial Register and the publication.
- Filing an application for registration in the Commercial Register.
Company types you can register
The creation of legal entities and sole proprietors in Latvia is regulated by the Commercial Law. According to this legislative act, it’s possible to set up a company in Latvia of the following types:
- A full partnership (Pilnsabiedrība, abbr. PS) is a legal entity whose purpose is to conduct business using a joint company name. There two or more persons (participants) are united based on a partnership agreement, not limiting their liability to creditors of the full partnership.
- Limited partnership (Komandītsabiedrība, abbreviated KS) is a company created by two or more participants to conduct business activities with the joint use of the company name, while the liability of the company participants to creditors is limited by their contributions.
- Limited liability Company (Sabiedrība ar ierobežotu atbildību, abbr. SIA) is a private company with not publicly listed shares.
- A joint-stock company (Akciju sabiedrība, abbr. AS) is a legal entity with shares that can be freely sold on the market.
An LLC and a JSC are not liable for the obligations of its shareholders and vice versa.
Requirements for companies
In compliance with the law, the minimum authorized capital of an LLC is EUR 2,800. It should be noted that the founders of the LLC must pay at least 50% of the authorized capital before registration, and the remainder for one year. But this does not apply to those who want to build a company with the lowest capital. In this case, you must immediately transfer all the money to your bank account.
Starting a business in Latvia you should register the company in special institutions called Registers. To start the process you should have:
- Application on a special form (certified signatures).
- Memorandum and articles of association.
- Shareholders register (signatures certified).
- Bank payment order confirming the payment of the authorized capital.
- Valuation of property contribution (if any).
- Written consent of the members of the Management Board (signatures certified).
- Notice to the board of directors about the presence of the legal address of the company together with the consent of the owner of the real estate, as well as the cadastral number of the property. The surname and name of the owner of the apartment or building and his code must also be indicated in the agreement.
- Receipt of state duty and information on publication in the official publication of Latvijas Vēstnesis.
Benefits to open company in Latvia
Despite the complicated situation with opening accounts and servicing at local banks, many non-residents from neighboring countries seek to register their business in offshore Latvia. The following features make this country attractive for foreign capital:
- Latvia is the EU member and this simplifies the process of entering the EU markets.
- The absence of complex and bureaucratic procedures during company registration.
- The minimum size of the authorized capital is one Euro.
- A loyal and clear tax system.
Moreover, this is a real opportunity to obtain a residence permit in Latvia.