Entity Formation in Latvia

Ready for a permanent Latvian presence? We help you incorporate the right way, and stay alongside you for the accounting, payroll, and compliance that follow. Independent advice, including telling you when it is too early.

  • Independent advice
  • Vetted partners
  • Honest timing

What incorporating in Latvia means

A SIA (sabiedrība ar ierobežotu atbildību, limited-liability company) is the standard vehicle for a permanent business presence, registered at the Register of Enterprises, with minimum share capital as low as EUR 1 for smaller founder groups. Larger or more capital-intensive operations sometimes use an AS (akciju sabiedrība, joint-stock company), which needs at least EUR 25,000 in share capital but can list shares and raise capital more easily. When you form one, you become the legal employer and operator in Latvia, with full control and no per-employee EOR fees, in exchange for the setup time and the ongoing obligations.

01

Your own company

Your own SIA makes you the legal employer and operator in Latvia, with full control of employment terms and a local brand presence.

02

Lower cost at scale

No per-employee EOR fees. For permanent, proven headcount, owning the entity is more cost-effective than ongoing EOR arrangements.

03

Setup takes time

Registration typically takes one to two weeks once documents and capital are in place, and you cannot employ anyone until the Register of Enterprises entry and tax registration complete. Timing the move matters, which is why many companies bridge with an EOR first.

How incorporating in Latvia works, step by step

From structuring the company to operating it compliantly.

01 — Structure & prepare

We confirm incorporation is right for you, then reserve the company name, prepare the founding documents, and arrange your registered Latvian office address.

02 — Capital & founding documents

The founding documents are signed and the share capital deposited. A standard SIA needs EUR 2,800 in share capital, or as little as EUR 1 under the low-capital variant available where the company has five or fewer founders, all natural persons who also sit on the board. An AS needs at least EUR 25,000, with at least 25% paid in at formation.

03 — Register the company

The company is entered on the Register of Enterprises, where legal personality begins, then registered for tax purposes with the State Revenue Service (VID), so you can operate and employ compliantly.

04 — Operate & stay compliant

Business bank account, then ongoing accounting, payroll, filings, and annual reporting, all of which we can run for you.

What incorporating in Latvia costs

Two kinds of cost: the one-off formation, and the ongoing operating obligations. Latvia’s formation cost is low, especially for a low-capital SIA; the genuine complexity is on the corporate-tax side, once the company is trading. We give you a clear figure before you commit.

Share capital & formation

EUR 2,800 minimum share capital for a standard SIA, or as little as EUR 1 under the low-capital variant (five or fewer natural-person founders who are also the board). An AS needs at least EUR 25,000. Register of Enterprises fees and notary costs are modest on top.

Corporate tax

0% on retained and reinvested profit: corporate tax only falls due when profit is distributed. On distribution, the taxable amount is the distributed sum divided by the coefficient 0.8, taxed at 20%, so a EUR 80 dividend creates a EUR 100 tax base and EUR 20 of tax. New from 2026: companies whose shareholders are exclusively individuals can opt into an alternative regime instead, taxed at a lower rate on a different gross-up coefficient, with a separate personal-tax component taken directly from the dividend paid to the shareholder rather than borne by the company. We confirm which regime suits your structure when we scope the formation.

VAT

Standard VAT is 21%, with reduced rates of 12% (including pharmaceuticals and accommodation, and now fresh Latvian fruit and vegetables permanently from January 2026, plus a one-year pilot extending this to bread, milk, poultry and eggs from 1 July 2026 to 30 June 2027, pending Ministry of Agriculture evaluation) and 5% on books, press and newspapers.

Ongoing obligations

Accounting, monthly payroll (personal tax withholding and the VSAOI contribution), corporate tax and VAT filings, and annual financial statements, all of which we can manage for you.

Why form your Latvian company through Bradford Jacobs

Why companies incorporate in Latvia through us rather than a one-off formation agent.

We advise you on the best time to incorporate

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

End-to-end, not just the paperwork

We do not disappear after registration. We stay on for the accounting, payroll, and compliance, so your company runs, not just exists.

  • Beyond registration
  • Ongoing compliance
  • One team throughout

The right specialists, in place

Notary, tax, and accounting partners we have vetted and worked with, coordinated for you, so the process moves and nothing gets missed.

  • Vetted specialists
  • Coordinated for you
  • Nothing gets missed

Two decades of formations

Two decades forming and running entities across global markets, with the local knowledge to keep you compliant and out of the common traps.

  • Incorporations
  • Legal & tax partners
  • Traps avoided

We run it after you form it

Incorporation is the start, not the finish. We stay on for accounting, payroll, tax filings, and annual accounts, so your company operates from day one without you building a local finance function.

  • Full back office
  • Accounting & payroll
  • Annual accounts

The distribution trap nobody explains

A growing business hits a good quarter and someone says, let us just take a dividend, it is only 20%. It sounds simple. It usually is not costed correctly, yet. Here is what people expect against what happens in practice.

Employment & payroll obligations

Expectation: 20% corporate tax works like anywhere else, calculated on the profit you made this year. Reality: while profit sits inside the SIA, retained and reinvested, it is taxed at 0%. The 20% only lands the moment you distribute it, calculated on a grossed-up base (the distribution divided by 0.8), which means the real cash cost of taking money out is higher than the headline rate suggests, discovered only when the dividend has already been declared instead of costed in advance.

Tax, filing & reporting obligations

Expectation: we can always reverse it. Reality: dissolving a company needs a shareholder resolution, creditor notification, and a liquidation period. And once it exists, the obligations do not stop: annual financial statements, monthly payroll filings, corporate tax and VAT returns, and (above defined size thresholds) a statutory audit. None of this is a reason not to incorporate. It is a reason to do it at the right time, with the right partners already in place.

What we handle for your company

Beyond incorporation, we can run the full back office for your company.

Compliant payroll

Compliant Latvian payroll and employment administration, issued and maintained for you.

Payroll & filings

Monthly payroll run, with income tax and the VSAOI contribution calculated, withheld, and filed each month.

Statutory benefits

All statutory benefits administered: annual leave, sick pay, maternity and paternity benefit coordination, notice and severance.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on incorporating and running a company in Latvia.

How long does it take to incorporate in Latvia?

Typically one to two weeks once documents, capital, and the registered address are in place. You cannot legally employ anyone until the Register of Enterprises entry and tax registration complete, which is why timing matters and why many companies bridge with an EOR first.

EUR 2,800 for a standard SIA, or as little as EUR 1 under the low-capital variant, available where the company has five or fewer founders, all natural persons who also sit on the board. An AS (joint-stock company) needs at least EUR 25,000. The real cost is the ongoing accounting and compliance, which we can run for you.

Yes. There is no residency or citizenship requirement for shareholders or board members; a non-resident individual can be sole shareholder and sole board member, managing remotely. You will need a registered Latvian office address, which we arrange.

Incorporate when you have permanent, proven headcount and want full control, and the per-head savings justify the ongoing costs and the corporate-tax planning that comes with owning the entity. Use EOR while you are still validating the market or need people working quickly. Most companies start with EOR and incorporate later. We advise on the crossover.

Accounting, monthly payroll (income tax and the VSAOI contribution), corporate tax and VAT filings, and annual financial statements (plus a statutory audit above defined size thresholds). We can run all of it so the entity stays compliant without you building a local finance function.

Yes, and it is how most companies use us. Beyond incorporation we provide ongoing accounting, payroll, and compliance, so your Latvian company operates smoothly from day one without hiring locally for back office.

Ready to form your company in Latvia?

Tell us your plans for Latvia and we will tell you honestly whether now is the time to incorporate, then handle it end to end if it is, usually scoped within a day. No formation-mill upsell, just the right call.

Tax, company, and labour data verified July 2026 (State Revenue Service (VID), Register of Enterprises, State Social Insurance Agency (VSAA)). Figures change; we confirm the current position when we scope your formation.