A representative office is a minimum presence that a foreign company can legally have in Latvia. A representative office is not allowed to engage in any business activity and, as long as this restriction is observed, it is not taxed in Latvia. Usually, the following list of activities that a representative office can undertake would not be considered business activity for tax purposes: creating business opportunities; improving the exchange of commercial, scientific or technical information; developing trade and economic links with Latvian businesses.<\/p>\n
A representative office is not treated as a trading entity for Latvian accounting and tax purposes. It is therefore not required to maintain separate accounting records and\/or systems, file regular tax returns or prepare annual accounts. The only exception is requirements relating to the representative office\u2019s capacity as an employer. If it employs local staff, the representative office must comply with the Personal Income Tax Act and the Social Security Act, including requirements related to tax accounting procedures.<\/p>\n