Assistance with preparing all the information and documents needed to set up a limited liability company (SIA). The assistance covers everything from planning your ownership structure, share capital, and management board, to filing the registration documents. I also guide you through your first steps after setup and help you understand your ongoing tax obligations.
Information about company registration can be studied independently. However, most decisions — the company form, share capital and ownership structure — should be made with an understanding of the consequences of each option. AB ways handles the preparation, review and support throughout the registration process.
I help determine the appropriate share capital and ownership structure for your specific situation and objectives.
I calculate the registration costs and timing specifically for your situation — without average figures or unnecessary expense items.
I prepare all documents required for registration: incorporation documents, applications and related forms, taking into account the requirements of the Register of Enterprises.
Registration can be completed remotely: documents can be submitted electronically or the document package can be sent by post.
Accounting that complies with the requirements of Latvian legislation.
I explain the tax obligations in advance: VAT, corporate income tax and payroll taxes — without surprises.
The shareholders of an SIA may be legal entities or individuals. The minimum number is one. There are no restrictions on foreign individuals or legal entities. A foreign company may be the sole shareholder of a Latvian SIA.
Shareholders make what can be described as “strategic” or “company-level” decisions concerning the company, such as appointing the management board and approving the distribution of profits.
A shareholder has the right to sell, donate or otherwise transfer shares. The articles of association may provide conditions for the transfer of shares. If no such conditions are provided in the articles of association, the general procedure established by law applies.
If a shareholder decides to sell their shares, they must first offer them to the other shareholders. If the other shareholders refuse to purchase them, the shares may be sold to third parties.
If a shareholder wishes to transfer the shares in another way, for example by gift or exchange, the consent of the other shareholders is required.
As a general rule, shareholders are liable for the obligations of the SIA only up to their contribution to the share capital — unlike, for example, an individual merchant.
Exceptions where shareholders may be liable with all of their personal assets include:
Since January 1, 2015, the rules are stricter for management boards. Under the Law on Taxes and Duties, board members can be held personally liable for the company's unpaid tax debts under specific conditions. This is completely separate from their regular liability to standard company creditors.
If the SIA had more than one management board member when the tax debt arose, all management board members are jointly and severally liable.
The standard minimum share capital is EUR 2,800. In addition to the standard option, the law allows an SIA to be registered with share capital from EUR 1 — a so-called “low-capital SIA”.
The status of such an SIA is generally the same as that of an SIA with standard share capital, but there are several important differences:
The share capital must be fully paid in cash before submission of the registration documents. With share capital of EUR 2,800 or more, both cash and in-kind contributions are permitted.
An SIA must have a registered office in Latvia. Under the Commercial Law, the registered office is the address where the company's management is located.
In Latvia, it is common for the owner of a property to grant an SIA the right to use the property's address as its registered office. The address of residential premises, such as an apartment or house, may also be used as the registered office. Companies offering virtual office (registered address) services operate on the market, but this option can sometimes cause complications in relations with the State Revenue Service and the bank. Consider these risks before signing up.
The management board, as the governing body of the SIA, is responsible for the company's day-to-day management. Only individuals may serve on the management board. The minimum number of management board members is one. There are no restrictions on foreigners.
The following cannot serve as a management board member:
The main requirements for a company name are that it must use only Latin or Latvian letters and must differ from a name that has already been registered or submitted for registration.
The State Notary of the Register of Enterprises will also postpone registration if the only difference between your SIA's name and an already registered or submitted name consists of spaces or punctuation marks between letters/numbers (for example: name / na me / .name / na.me), or the use of upper- and lower-case letters (for example: Name / name / NAME).
There are also restrictions on the use of certain words, such as “state” and “municipality”, and it is worth checking the uniqueness of the name not only in the Register of Enterprises but also in the trademark register.
SIA is the most popular form, accounting for more than 90% of registered companies. Other options include IK (individual merchant), AS (joint-stock company) and several less common forms. A non-resident foreigner can be the 100% shareholder and simultaneously the sole management board member — without a mandatory local partner or resident director.
Under the tax legislation applicable in 2026, an SIA is in most cases more advantageous than conducting economic activity as an individual: an SIA generally has a lower overall social contribution burden and more options for payments to the owner (salary plus dividends). If the business is started by two or more partners or employees are planned, an SIA is practically the only viable option. An exception is leasing out one's own property, such as real estate or a vehicle: in this case, the notified economic activity regime for an individual may be more advantageous than an SIA.
No, registration can be completed entirely remotely. If the founder has a qualified electronic signature, the documents can be signed completely remotely. If there is no qualified electronic signature, signatures on some documents must be certified by a sworn notary; if the document is not in Latvian, a notarised translation will be required, and paper documents must be sent by post.
The state fee for registration by electronic submission is EUR 20 for a low-capital SIA and EUR 75 for an SIA with standard share capital; expedited registration costs more. Additional costs may include rent of premises (registered address), notary and lawyer services, as well as banking services.
Document preparation usually takes several days. The time required to open a bank account depends on the bank: for a Latvian citizen with a positive history, it usually takes several days; for foreigners, the process is significantly longer. Registration with the Register of Enterprises takes 1–3 business days, or 1 day under the expedited procedure; in certain cases, the Register of Enterprises may postpone registration until the State Revenue Service provides its approval — this can add approximately 10 business days.
Some decisions are best made in advance, before the documents are prepared:
How do you check and choose a company name? Check its uniqueness in the Register of Enterprises and in the database of the Patent Office. The name must use letters from the Latvian or Latin alphabet; there are restrictions on the use of certain words, such as “state” and “municipality”.
Where can you obtain a registered address? A residential address, such as an apartment or house, or a rented office can be used. Virtual office services are available on the market, but they may create complications in relations with the State Revenue Service and banks.
How do you contribute the share capital? You can open a temporary account with a bank or payment service provider and pay your share capital contribution to that account. In certain cases, the share capital may be paid by an in-kind contribution (except for a low-capital SIA, where payment is possible only in cash).
Can everything be done online? Yes, through the Register of Enterprises portal using an electronic signature (registrs.ur.gov.lv). Without a qualified electronic signature, notarisation of signatures on the documents will be required and, in certain cases, an apostille and document translations will also be necessary.
Under Article 142 of the Commercial Law, the incorporation documents are the founding agreement and the articles of association. The documents must be prepared in Latvian. Depending on the circumstances, additional documents may be required.
A foreigner without a Latvian personal identity number may need to submit a questionnaire for inclusion of their data in the Register of Natural Persons.
Six steps from collecting information to having the completed document package.
An SIA can be registered without travelling to Latvia. Signatures on the documents can be certified by a sworn notary in the founder's country of residence. In this case, the document text must be translated into Latvian. Depending on the country where the signature is certified, legalisation or an apostille may be required.
Is a visa or residence permit required for registration? If you do not plan to travel to Latvia — no.
How can documents be signed remotely? Latvia has the eParaksts system. A foreigner can obtain a foreigner's eID card. Documents may also be signed using a qualified electronic signature issued by another country — it should be confirmed in advance whether the Register of Enterprises recognises such a signature. If you have no qualified electronic signature, the documents must be signed before a sworn notary.
Is a local director or accountant required? There is no requirement for a local director. Accounting is required: companies must maintain accounting records; in certain cases, accounting may be maintained by a management board member.
Opening a bank account for a non-resident. As a rule, the process is more complicated than for a resident: KYC requirements are strict, the source of funds often has to be verified, and the process itself can take several weeks.
The share capital may be used for the needs of the SIA — to purchase goods, pay for services and so on.
Registration with the VID. After registration with the Register of Enterprises, the SIA is automatically registered as a taxpayer. In certain cases, additional registration with EDS is required. Access to EDS is necessary for submitting tax returns. An application for a VAT registration number may be submitted together with the SIA registration documents.
Accounting, reporting and annual obligations. The management board is responsible for organising accounting and submitting tax returns and the annual report. In most cases, an SIA submits a payroll report monthly, a VAT return monthly or quarterly if the SIA is VAT-registered, an annual report once a year, and a corporate income tax return at least once a year.
Certain types of activity require a licence — for example, retail sale of petroleum products.
It is worth deciding in advance:
A company is required to maintain accounting records. Accounting registers must be in Latvian, and paper form source documents must be located in Latvia.
The company is required to submit an annual report: for an SIA, the deadline is generally 5 months after the end of the financial year.
The criteria for a mandatory audit were increased starting from the 2024 reporting year. As of 2026:
| Requirement | Applies if at least 2 of 3 criteria are exceeded for two consecutive years |
|---|---|
| Full audit by a sworn auditor |
|
| Limited review by a sworn auditor | Only applies if the company does not meet the full audit thresholds:
|
Companies that do not exceed these thresholds, including most micro and small businesses, prepare a simplified annual report without a mandatory auditor's report.
| Tax | Rate and conditions in 2026 |
|---|---|
| VAT | Standard rate — 21%. Reduced rates of 12% and 5% apply to certain categories of goods and services (medicines, heating, transport, books and press in Latvian/EU and OECD languages, etc.), while 0% applies to exports and certain intra-Community supplies. VAT registration in general is mandatory when annual turnover exceeds EUR 50,000. |
| Corporate income tax (CIT) | 0% on undistributed (reinvested) profit. When profit is distributed (dividends and equivalent payments), 20% is applied using the “20/80” formula to the distributed amount, which in practice is 25% of the net amount paid out. From 2026, an SIA fully owned by individuals may choose an alternative regime for dividends paid to individuals: 15% corporate income tax at company level plus 6% personal income tax withheld when the dividend is actually paid. |
| Micro-enterprise tax (MUN) | An SIA cannot be a micro-enterprise taxpayer from 2022 onwards, regardless of the amount of share capital. The regime is available only to individual merchants, individuals conducting economic activity, and farms of farmers and fishermen. The tax rate is 25% of turnover. |
| Mandatory state social insurance contributions (VSAOI) | The more common total rate is 34.09% of gross salary (23.59% — employer's share, 10.5% — employee's share). |
| Personal income tax (IIN) on salary | Progressive rates: 25.5% on annual income up to EUR 105,300; 33% on the portion of income above this amount (paid through the annual tax return), plus an additional 3% on the portion of total annual income exceeding EUR 200,000. A fixed non-taxable minimum of EUR 550 per month applies. |
| Business risk state fee | EUR 0.36 per month for each employee with whom an employment relationship has been established. |
| Dividends paid to individual shareholders | Generally, if profits have already been subject to corporate income tax (CIT) at the company level, no personal income tax (PIT) is withheld when dividends are paid to an individual. But exceptions apply for the "split tax model" - 15% CIT / 6% PIT regime and an additional 3% PIT applies if the recipient's total annual income exceeds EUR 200,000. |
Difference between a standard and low-capital SIA. The shareholders and management board members of a low-capital SIA may only be individuals (no more than five), the capital must be paid entirely in cash and in full before registration, and additional liability and mandatory reserve rules apply until the share capital reaches EUR 2,800.
Risk of a bank refusing to open an account. Latvian banks are subject to strict governmental requirements: banks carefully review an SIA when opening an account and continue monitoring the company's activities afterwards. If a bank refuses to open an account, the fee already paid is generally not refunded.
What happens if the company does not conduct business therefore does not submit reports? Risks include suspension of the company's activities, loss of the VAT registration number, fines and restrictions in state registers.
I collect information about the company, shareholders, address, capital and management board.
I determine the required incorporation documents and prepare them.
I organise the preparatory steps and signing of the documents.
The documents are submitted to the Register of Enterprises of the Republic of Latvia.
After review, the client receives the required registration documents and recommendations for the first steps.
Describe your situation and ask your question. If the company structure or documents have already been determined, mention this in your message — it will make it easier to understand the task immediately.
abways@abways.lv →