Options for registering companies in Latvia
As a member of the European Union and the Eurozone, Latvia is a strategic gateway for businesses aiming to operate across Northern Europe and connect with markets in the Baltic region and beyond.
Its pro-business policies, competitive tax system - which includes 0% corporate tax on reinvested profit - and well-developed infrastructure make it an appealing location for logistics, IT and export-oriented manufacturing.
Latvia offers international companies the following legal structures for establishing a local presence:
Limited liability company (Sabiedrība ar Ierobežotu Atbildību - SIA)
- The SIA is the most popular form of commercial activity in Latvia, suitable for small and medium-sized enterprises (SMEs) due to its flexibility and ease of setup.
- The standard minimum share capital is €2,800, of which at least 50% must be paid up before registration. A reduced capital SIA (capital below €2,800) is available, but it is subject to strict restrictions on ownership (individuals only) and turnover.
- The liability of the shareholders is limited to their capital contribution and both the management board and shareholders may be non-residents.
Public limited company (Akciju sabiedrība - AS)
- The AS is generally chosen for larger businesses, those planning significant capital investment, or entities intending to seek capital publicly by listing shares on the NASDAQ Riga Stock Exchange.
- It requires a substantially higher minimum share capital of €35,000, which must be fully paid up before registration.
- The AS has a more complex, mandatory three-tier governance structure, including a Shareholders' Meeting, a Supervisory Council and a Management Board, making it subject to more stringent corporate governance and disclosure standards.
Representative office (Pārstāvniecība)
- The Latvian representative office is not considered an independent legal entity and is strictly prohibited from performing any commercial activities or generating profit in Latvia.
- Its functions are limited to market research, liaison, advertising and promoting the foreign parent company's interests.
- There is no minimum share capital requirement, making it a low-cost option for initial market exploration. However, any income-generating activity would necessitate registration as a branch or SIA.
Free zone company
- Latvia operates several Special Economic Zones (SEZs) and Freeports (e.g., Riga, Ventspils, Liepāja, Latgale), which offer significant tax incentives to businesses that meet specific investment and job creation criteria.
- The key benefit is a substantial rebate on corporate income tax (up to 80% relief) and real estate tax (up to 100% relief), up to a maximum allowable intensity of the investment.
- Companies must first incorporate as a legal entity (SIA or AS) and then obtain a licence from the relevant SEZ authority to qualify for the tax relief programme.
To help you choose the right structure, we have created an 'at a glance' summary table for the common company types that outlines key differences in formation processes, requirements and timelines. It serves as a valuable resource for foreign companies looking to set up or expand a business in Latvia.
Comparison of the common types of companies in Latvia
Information verified against Investment and Development Agency of Latvia (LIAA)