Written by the US GO EU corporate formation team, in consultation with Latvian-licensed attorneys and accountants · Last updated July 2026
3–5
Business days to register — one of the fastest company formation timelines in the EU, with online submission available
20%
Corporate tax rate — applied only to distributed profits. Retained earnings reinvested in the business are fully tax-exempt
500M+
Consumers in the EU single market — accessible without trade barriers to any company registered in Latvia
Why Americans Register Companies in Latvia
Latvia offers a combination of advantages that are difficult to replicate elsewhere in the EU: a deferred-taxation corporate model that rewards growth, an efficient online registration infrastructure, low operational costs, and a strategic location at the crossroads of Northern and Eastern Europe. For American entrepreneurs, freelancers, and business owners, a Latvian entity provides a legally solid EU business presence without the complexity or cost of larger Western European markets.
EU and Schengen membership means your Latvian company can contract, invoice, and operate across 27 EU member states. The country's skilled, multilingual workforce — fluent in Latvian, Russian, and English — and competitive labor costs make it a practical operating base as well as a legal registration address.
Business StructuresWhich Entity Type Is Right for You?
Latvia offers several business structures. The vast majority of foreign-owned companies — and almost all American-owned startups and SMEs — register as a SIA (limited liability company). Here is how the main options compare.
Most Popular★ Recommended for Americans
Limited Liability Company
SIA — Sabiedrība ar ierobežotu atbildību
The standard choice for small and medium businesses, startups, and foreign entrepreneurs. Liability is limited to share capital. Minimal bureaucracy, no residency requirement for directors. Can be registered with as little as €1 in share capital under qualifying conditions.
Larger Businesses
Joint-Stock Company
AS — Akciju sabiedrība
Suited to larger businesses, companies seeking institutional investment, or those planning a public listing. More governance requirements including a supervisory board. Generally not chosen for initial foreign registrations due to complexity and capital requirements.
Foreign Companies
Branch Office
Filiāle
An extension of an existing foreign company rather than a separate legal entity. Liability rests with the parent company. Useful for foreign companies testing the Latvian market or establishing a local presence without incorporating a separate entity.
Sole Traders
Sole Proprietorship
Individuālais komersants (IK)
For individuals operating independently. Simple to set up and maintain, but the owner bears unlimited personal liability. Less commonly chosen by foreign nationals due to residency requirements and the stronger liability protection offered by a SIA.
Latvia's Unique Corporate Tax Structure
Latvia's corporate tax system is deliberately designed to incentivize reinvestment. Unlike conventional corporate tax models where profits are taxed as they are earned, Latvia taxes only distributed profits — meaning dividends and other profit distributions. Earnings retained and reinvested in the business are not taxed.
Deferred Corporate Tax — Tax Only When You Distribute
Latvia Corporate Tax Model
20%
Standard corporate income tax rate — applied to the gross-up of distributed profits (effective ~25%), not gross revenue
0%
Tax on retained profits — earnings reinvested in the business incur no annual corporate tax liability
€50k
Annual turnover threshold for mandatory VAT registration with the State Revenue Service (VID) — raised from €40,000 effective 2025
Latvia's deferred-tax model is particularly well-suited to growth-focused businesses. Companies operating within Latvia's Special Economic Zones (SEZs) may qualify for further reduced CIT, real estate tax, and VAT rates. New from 1 January 2026: companies whose shareholders are exclusively individuals can opt into an alternative regime — 15% CIT on the gross-up of distributed profit (coefficient 0.85, effective ~17.65%) plus 6% personal income tax withheld on the dividend — which can be more efficient than the standard 20%/25% model for closely-held, founder-owned businesses. All companies are subject to standard Latvian social contribution requirements for employees. US citizens operating Latvian entities retain US tax obligations — see the note below.
⚠️ US Tax Obligations Don't Stop at the EU Border
US citizens and Green Card holders are taxed by the United States on worldwide income regardless of where they live or where their business is incorporated. Owning a foreign corporation creates significant US tax complexity — including FBAR reporting for foreign accounts above $10,000, potential PFIC classification, Subpart F income rules, and GILTI (Global Intangible Low-Taxed Income) provisions that may require you to include undistributed foreign corporate profits in your US taxable income. Before registering a Latvian company, consult a cross-border tax advisor with expertise in both US expat tax law and US-Latvia tax treaty provisions.
How to Register a Company in Latvia
The Latvian company registration process is streamlined and can be completed online through the Latvian Commercial Register portal. Most SIA registrations are completed within 3 to 5 business days when documentation is in order. Here is the full process.
1
Choose Your Business Structure
For most American entrepreneurs and foreign investors, the SIA (limited liability company) is the correct choice. Confirm the structure with a Latvian business attorney before proceeding, particularly if your intended business involves regulated sectors such as finance, healthcare, or insurance.
Decision
2
Choose and Reserve a Company Name
The company name must be unique within the Latvian Commercial Register and comply with Latvian naming regulations. Names can be checked and reserved through the register's online portal before formal registration. The name must include the entity type (e.g., "SIA" or "LLC" equivalent in Latvian).
~1 day
3
Prepare Foundation Documents
Prepare the Articles of Association (Statūti) — the company's founding document outlining its purpose, share structure, and governance rules. You will also need certified identification documents (passports or national IDs) for all shareholders and directors, and a registered office address in Latvia.
Documents
4
Open a Corporate Bank Account & Deposit Share Capital
Open a corporate bank account with a Latvian bank and deposit the required share capital (minimum €2,800 for a standard SIA, or €1 under qualifying conditions). The bank will issue a confirmation letter that must be submitted with the registration application. Note: Latvian banks conduct thorough due diligence on new foreign-owned companies — plan for this step to take time.
Banking
5
Submit Application to the Latvian Commercial Register
Submit the company registration application — along with Articles of Association, ID documents, bank confirmation of share capital deposit, and registered office address — to the Latvian Commercial Register (Uzņēmumu reģistrs). Applications can be submitted online via the e-services portal or in person. The state registration fee varies by processing speed.
3–5 business days
6
Register for Tax with the State Revenue Service (VID)
After receiving your commercial registration certificate, register the company with the State Revenue Service (Valsts ieņēmumu dienests — VID) for tax purposes. If your expected annual turnover exceeds €50,000 (raised from €40,000 effective 2025), you must also register for VAT. Failure to register for VAT when required results in penalties.
Post-registration
7
Register Employees with Social Security (if applicable)
If your company will employ staff in Latvia, register with the State Social Insurance Agency (VSAA) to comply with Latvian social security and health insurance obligations. This step applies to both Latvian and foreign employees working within Latvia.
If hiring
8
Obtain Business Licenses (if applicable)
Certain regulated sectors require additional licenses or permits before commencing operations. Sectors with heightened regulatory requirements include financial services, insurance, healthcare, food production, and alcohol. Verify licensing requirements with a Latvian attorney relevant to your sector before beginning commercial activity.
Regulated sectors
What Does It Cost to Register a Company in Latvia?
Latvia is one of the most cost-effective EU jurisdictions for company formation. The state fees are modest, and the overall process is significantly less expensive than comparable registrations in Western Europe.
| Cost Item | Notes | Est. Amount |
|---|---|---|
| State registration fee (standard) | Submitted to the Latvian Commercial Register. Faster processing (1–2 days) costs more. | €20–€142 |
| Minimum share capital (SIA) | Deposited in a Latvian bank account. Not a fee — remains as company capital. Reduced to €1 under qualifying conditions. | €2,800 |
| Registered office address | Every Latvian company requires a local registered address. Virtual office services are available. | €300–€800/yr |
| Legal & notary fees | Articles of Association preparation and document notarization. Complexity varies by structure. | €300–€1,500 |
| Accounting & annual compliance | Annual financial statements and tax returns required. Mandatory audit thresholds apply for larger companies. | €500–€2,000/yr |
| Business license (if required) | Sector-dependent. Finance, healthcare, and food sectors typically carry the highest licensing costs. | Varies by sector |
Post-Registration Requirements
Registering your Latvian company is the beginning, not the end, of your compliance obligations. All Latvian companies must maintain accounting records, file annual reports, and meet corporate governance requirements on an ongoing basis.
Annual Financial Statements & Tax Returns
All Latvian companies must submit annual financial statements and corporate tax returns to the State Revenue Service (VID). Failure to comply results in penalties and potential suspension of the company's commercial registration.
Corporate Governance — Management Board
A Latvian company must appoint at least one member to its management board (valdē). Board members can be foreign nationals and are not required to reside in Latvia. Larger companies may also require a supervisory board.
Accounting Records
Accounting records must be maintained in accordance with Latvian accounting standards. A statutory audit may be required depending on the company's size — triggered by thresholds on total assets, annual revenue, and headcount.
Beneficial Ownership Register
Latvia maintains a public beneficial ownership register. All companies must register and keep current information about their ultimate beneficial owners (UBOs) — individuals who own or control more than 25% of the company or otherwise exercise effective control.
What Americans Should Know Before Registering
Banking due diligence is the most common bottleneck — plan for it
Opening a Latvian corporate bank account has become more stringent since the mid-2010s due to EU AML (Anti-Money Laundering) compliance requirements. Latvian banks conduct detailed due diligence on all new accounts, particularly for foreign-owned companies with non-EU shareholders. Prepare comprehensive documentation — corporate structure, source of funds, business plan, and expected transaction flows — before approaching banks. This step frequently takes longer than the registration itself.
The €1 share capital option has conditions — verify your eligibility
While a SIA can technically be formed with €1 in share capital, this applies only where specific criteria are met, and the company is required to build reserves until capital reaches €2,800. Most foreign-owned companies formed for operational or investment purposes should plan for the standard €2,800 minimum. Confirm your eligibility with a Latvian corporate attorney before assuming the reduced-capital route is available to you.
Latvia's tax model defers tax — it doesn't eliminate US obligations
Latvia's retained-profit tax exemption is a genuine structural advantage for reinvesting companies. However, for US owners, GILTI (Global Intangible Low-Taxed Income) rules introduced in 2017 may require you to include a portion of your Latvian company's undistributed income in your US tax return each year — regardless of whether you've distributed profits. The interaction between Latvia's deferred-tax model and US CFC (Controlled Foreign Corporation) rules is complex. Engage a US-qualified international tax advisor before forming your entity.
Regulated sectors require sector-specific legal advice before registration
Finance, insurance, medical devices, food production, and several other sectors are subject to sector-specific licensing from Latvian regulatory bodies. In some cases, licensing processes must be initiated — and in some cases completed — before the company can commence commercial activity. Attempting to operate in a regulated sector without the required license is a serious legal and financial risk. Always obtain sector-specific legal advice before registering in these areas.
Company registration can support a residence permit application — but is not automatically sufficient
Registering and operating a Latvian company can form part of an investor or business-based residence permit application. However, registration alone does not automatically qualify you for residency. The Latvia Investor Visa (share capital route at €50,000 + state fee) has specific qualifying criteria beyond simple company registration. See our Share Capital Investor Visa guide and Latvia Golden Visa overview for details.
Registering a Latvian Company Is Right for You If…
- →You need a legal EU business entity to contract, invoice, and operate across the single market without trade barriers.
- →You want to benefit from Latvia's deferred corporate tax model — reinvesting profits without annual tax liability.
- →You are looking for fast, low-cost company formation with minimal ongoing bureaucracy compared to Western European markets.
- →You want a Northern European business address with strategic access to Baltic, Scandinavian, and Eastern European markets.
- →You are considering combining company registration with a Latvian residence permit application through the investor visa programme.
We work with trusted Latvian corporate attorneys and accountants who specialize in company formation for non-EU nationals. From choosing the right entity structure and managing banking due diligence to post-registration compliance and US cross-border tax coordination — we guide you through every step of the process. You can also check LocalVouch for attorneys and accountants other American founders have personally vouched for.