Introduction
Latvia is regarded as an attractive location for investors looking for a gateway to the European Union. One of the first questions that many foreign entrepreneurs ask is: Do I need a Latvian partner to register a company in Latvia? The short answer is “no, you don’t”. Foreign nationals and legal entities can register and fully own a Latvian company without involving a local partner. However, knowing the legal and procedural landscape is crucial to a smooth incorporation process and operation of the company in Latvia. This article outlines how the local partner could be useful for the foreign investor planning to do business in Latvia.
Is foreign ownership allowed?
Latvian law does not have restrictions for foreign investors to own until 100% of the shares in a Latvian company. It does not matter if you’re an individual from outside the European Union or a corporate entity.
The most common legal entity is the SIA (Sabiedrība ar Ierobežotu Atbildību), which is a private limited liability company. It is similar to an LLC in other jurisdictions and offers limited liability to its shareholders.
Are there any residency requirements for shareholders or directors
There are no legal residency requirements for shareholders or board members in a Latvian company. This means that as a foreign individual, you can be the sole shareholder and serve as the sole board member (director) of the company. You do not need to appoint a local Latvian resident in any capacity to fulfil legal obligations.
There are, however, a few important notes to remember. While a foreigner can be a board member, he/she must be able to sign documents and may need to provide a notarised passport and proof of residence. Also the State Revenue Service (VID) may sometimes ask for additional documentation to verify the substance of the company, for example, when there is no physical office or presence in Latvia.
When a Latvian Partner Might Be Useful
Although not legally required, having a Latvian partner or local representative can be practically beneficial in certain situations:
Language and bureaucracy
The Latvian company is required to fill out the official documentation in Latvian. A local partner or agent can help bridge the language gap and handle interactions with institutions like the Enterprise Register or VID.
Bank account
Opening a bank account in Latvia can be one of the more challenging steps for non-residents due to increased regulatory scrutiny. Some banks prefer working with clients who have local ties, such as Latvian board members, partners, or employees. While not always the case, a Latvian partner can help establish trust and speed up the process.
Tax residency and substance
While the Latvian company can be operated outside of Latvia, most likely you will need to set up the business substance in Latvia. To establish sufficient business substance for the company in Latvia, you may need to show actual business activity in the country, such as having employees, office space, or a Latvian board member. While this doesn’t require a Latvian partner per se, it often leads companies to engage with local professionals or service providers.
How can a local partner help you with the company registration in Latvia?
The local partner is recommended to carry out the registration of the company. The process of registering of Latvian company is as follows.
- Name selection. First, the availability of the desired company name via the Latvian Commercial Register. Usually,y it is recommended to select a few names, which the local partner can test for availability.
- Legal address in Latvia. You must have a registered office address within the country if you are not planning to open a physical office. Local accounting and law offices usually offer such services for a low fee.
- Share capital: The minimum share capital for a standard SIA is €2800, of which at least €1400 must be paid upon registration. There’s also a micro capital SIA option that can be started with as little as €1, but it comes with restrictions. The share capital can be contributed in kind as well. To pay the share capital, usually the founder opens a temporary bank account, or the founder may authorise the local agent to do it on their behalf.
- Foundation documents should be drafted as follows:
The application form KR4 must be signed by the authorised applicant, notarised or signed with an e-signature.
- Company foundation decision or agreement (if more than one founder)
- Articles of association
- Statement issued by the financial institution that the share capital has been paid (for cash contributions)
- Statement of the appraiser regarding the value of the property to be invested (for investments in kind)
- Shareholders’ Registry signed by the authorised person, notary attested or signed with an e-signature.
- Consent of each Board Member to hold office.
- Statement from the Board about the registered office.
The foundation documents are usually straightforward, but the legal forms should be properly prepared to be accepted by the Enterprise Registry.
- Registration with the Enterprise Register: The application process can take 3-5 business days once all documents are submitted.
- Registration with the State Revenue Service (VID): This is important to recover input VAT; otherwise, the VAT registration is mandatory if your turnover exceeds €50,000 annually.
Many foreign entrepreneurs choose to work with Latvian business service providers, such as law firms, accounting agencies, or specialised company formation services. These entities can help prepare all required documents, provide a registered legal address, assist in setting up bank accounts and tax registration, translate and notarise documents.
Working with professionals can significantly streamline the process and reduce the likelihood of costly errors or delays.
Tax Considerations
Latvia has a competitive tax regime, most of them because of the special Corporate income tax, which is applicable only when the profits are distributed. As long as the profits are retained, the tax is not payable. There is no additional dividend tax, so the after-tax profits are freely distributable.
The VAT is based on the EU VAT system, the standard rate is 21%, and registration is mandatory once you exceed €50,000 in turnover.
When starting business operations, it is highly recommended to engage a tax advisor, particularly one experienced in international taxation, to structure your business efficiently.
Visa and residence permits
While you don’t need a Latvian partner to register a company, owning a company can open the door to residence permits in Latvia. Entrepreneurs who invest in and actively run a Latvian business can apply for a temporary residence permit, which allows them to live and travel within the Schengen zone.
Requirements often include a specific amount of investments to be made into the share capital of the Latvian company, and also, during its functioning, the company has to pay a certain amount of taxes into the state budget. Please contact us to receive more details.
How can we assist foreign entrepreneurs?
Our office provides comprehensive services to foreign entrepreneurs, including:
- Tax and legal advice on the intended business structure
- Assistance with the company registration in Latvia
- Proving legal address
- Guidance on immigration requirements
- Tax planning and consulting services
- Full-scope accounting and tax services.
Summary
To sum up, you do not need a Latvian partner to register a company in Latvia. The country’s laws are accommodating to foreign business owners, allowing 100% ownership and management by non-residents. That said, while not a legal necessity, having a local contact or advisor can be helpful in navigating bureaucratic and practical challenges—especially related to language, banking, and compliance.
Whether you’re setting up an online business, a regional office, or a startup, you can do it independently—with the right preparation and support. And if you need such support, then please do not hesitate to contact us.
We offer a full range of services — from A to Z — ensuring that you are never left alone in the process. We support our clients at every step, providing assistance with tax administration, offering tax advice, and helping to structure transactions in the most efficient way. Our experienced team will be on your side, handling all the administrative and regulatory complexities for you, including ongoing company support services such as accounting, VAT registration, and payroll calculation.
