Starting your business

Latvia is ranked as the number one start-up friendly country in the world (Sifted, 2021). Also, the latest rankings for trade freedom around the world by the Heritage Foundation – the Index of Economic Freedom, demonstrate a strong correlation between trade freedom and several positive indicators, for example, economic prosperity, low poverty rates, and clean environments.

The Index of Economic Freedom 2022, measuring the impact of liberty and free markets, placed Latvia in the 18th place of the world’s most free economies.

Setting up a company

All companies must be registered in the Commercial Register. For companies to achieve legal status, their founders shall prepare and submit to the Register of Enterprises: a foundation agreement or decision of foundation (in case of a single founder), articles of association, and confirmation of legal address, together with receipts that confirm payment of registration duty and for the publication of an announcement in the official newspaper, Latvijas Vēstnesis.

Registration duty depends on the chosen form of business. The Register of Enterprises undertakes to review applications and register companies within three days or within one working day (if one pays three times higher fee).

Companies can be registered in just one working day!

For more detailed information, please look into the Business Guide or contact the Investment team.

Forms of business

The forms of business differ mainly in terms of the volume of fixed capital, the liability of economic operators and the distribution of profits. Before choosing the legal form of the business, consult the accountant or the State Revenue Service regarding the desired tax treatment. The decision will also be facilitated by an assistant in choosing the form of economic activity established by Swedbank Finance Institute with the support of the Enterprise Register and the State Revenue Service.

There are several types of legal entities stipulated in Latvia’s Commercial Law:

Representative offices, similar to branches, are not independent legal entities. Representative offices cannot perform economic activities, and their functions are limited to market research, promotion of the parent company, and other limited marketing activities.
The most popular form of business by far is Ltd.

How to Open a Bank Account for Foreign Investors in Latvia

Latvia has a streamlined process for foreign investors looking to open a bank account in the country. The Latvian Investment and Development Agency (LIAA), together with the Ministry of Economics and the Finance Latvia Association. A specialized questionnaire has been developed, and it is highly recommended to complete it before contacting the bank. The purpose of this questionnaire is to speed up the bank account opening process by providing the necessary information to the banking sector. It allows the investor to receive a preliminary positive decision on account opening and obtain a direct bank contact dedicated to assisting with the process.

LIAA recommends to use this procedure since LIAA in this case serves as an additional trust reference for banks, ensuring a fast and personalized approach for foreign investors.

Key steps:

Complete the Questionnaire

LIAA highly recommends to fill the questionnaire before directly contacting the banks.The questionnaire helps gather essential information about the investor’s preferences for Latvian banks, including the services and support the investor expects. To achieve this, basic financial background information of the investor should be provided.

Contact LIAA

Contact LIAA to complete the form and receive an initial consultation about the financial sector in Latvia, along with tailored recommendations for your market entry strategy

Bank Review Process

Once LIAA has processed and validated the questionnaire, the investor will receive a list of banks open for negotiation, along with direct contacts who will provide personalized assistance. The investor can then choose a bank based on their preferences and proceed with the account opening process.

Reduced Time for Account Approval

The introduction of this questionnaire solution not only significantly reduces the time required for Latvian banks to review and approve new clients but also clarifies the investor's intent to open a bank account by providing information without any payment for document review.

Equal treatment of foreign investors

Latvia offers an open and attractive environment for business. By law, foreign investors have the same rights and duties as local investors. The foreign investor may be the sole founder of a company and may request a temporary residence permit. Foreign companies registered in Latvia are also entitled to buy land and property.

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Contacts

Riga office

Address: 2 Perses Street, Riga, Latvia, LV-1442
Web: www.investinlatvia.org
For more information: invest@liaa.gov.lv
Phone: +371 25710113
For tailored advice contact our team of experts