Frequently asked questions
A private limited liability company in Latvia is called a SIA (sabiedrība ar ierobežotu atbildību). It is the most common corporate form used for business activities in Latvia.
Latvian law provides for two principal forms of SIA:
- a regular SIA, with a minimum share capital of EUR 2,800;
- a small share capital SIA, with share capital ranging from EUR 1 to EUR 2,799.
If you are starting a new business in Latvia, NJORD typically recommends to set up a new company rather than buy an existing one.
In Latvia, shelf companies are not used as a standard business solution. In practice, if you buy an existing company, you are not getting a “fresh” company, you are taking over a legal entity with its full history, including any obligations and tax risks, even if the seller confirms there are none.
For that reason, if your goal is to launch a new business, the safer and more practical approach is usually to incorporate a new company from scratch.
A regular SIA may be established by one or more private individuals or legal entities.
A small share capital SIA may be established only by private individuals, and the number of founders may not exceed five. Founders of a small share capital SIA may not already be shareholders in another small share capital SIA.
Yes. there are no restrictions on non-residents establishing and owning shares in a Latvian SIA.
No, the shareholders do not manage the company’s daily operations directly. Instead, they make the main corporate decisions, such as appointing and removing board members. Shareholders – private persons may be appointed as board members.
A Latvian SIA is managed by its board. The board is the company’s executive body and is responsible for the day-to-day management of the business, as well as representing the company in dealings with third parties.
No, there are no restrictions for non-residents to be appointed as board members.
A SIA must have at least one board member. Board members may be founders/shareholders on non-shareholders with exception for a small share capital SIA, where board members may only be the founders.
If SIA has more than one board member, the company may be represented by all board members jointly or individually by any board member, depending on what is stated in the articles of association and registered with the Commercial Register.
Yes. An SIA must have a registered legal address in Latvia for the purposes of official communication.
Yes. The company name must be distinct from names already registered, or already applied for registration, in the Latvian Commercial Register. The proposed name must also not infringe trademarks valid in Latvia.
The share capital may be paid in cash or by property contribution. For cash payments 100% of the share capital must be paid into a temporary bank or payment institution account before registration.
A temporary bank account is an account opened for the company formation process in order to deposit the share capital before registration.
It is not the same as a regular operational business account. Its purpose is to receive the share capital required for incorporation.
The temporary bank account is not automatically converted into a regular business account after the company has been registered.
To activate regular banking services, a board member must contact the relevant bank or payment institution and complete its onboarding and compliance procedures. This involves providing KYC information and supporting documents. The exact requirements vary between banks and payment institutions. When assessing an application for a business account, Latvian banks commonly expect the company to demonstrate a genuine connection with Latvia and a credible business purpose. Depending on the case, this may include evidence that the company has employees, carries out business activities in Latvia, works with Latvian business partners, or rents premises in Latvia.
No. Once the company has been registered, the share capital may be used for legitimate business purposes, such as paying start-up costs, suppliers, rent, salaries, or other operating expenses.
However, the money belongs to the company, not to its shareholders personally. It cannot simply be withdrawn or used for private purposes.
Yes. Information regarding the ultimate beneficial owner (UBO) must be disclosed and registered. UBO is/are a private individual(-s) who directly or indirectly own or control more than 25% of the company’s shares.
Yes. A SIA is registered as a taxpayer at the same moment it is registered in the Latvian Commercial Register.
Yes. The incorporation process may be completed remotely when founders/board members use qualified electronic signatures with time stamp in the meaning of the eIDAS Regulation.
The incorporation process consists of several stages. The overall timeline depends largely on how quickly the founder provides the required information, arranges for the documents to be signed, and transfers the share capital.
In NJORD’s experience, document preparation usually involves two stages: first, preparing the initial incorporation documents based on the information provided by the founder and, subsequently, preparing the final registration documents once the share capital has been paid and the required information is confirmed. Each stage usually takes 2 to 3 business days.
Opening a temporary bank account and completing the related communication with the bank usually takes a further 2 to 3 business days. Registration with the Register of Enterprises of Latvia normally takes 3 business days under the standard procedure.
Overall, where communication is prompt, the ownership structure is straightforward, such as where the founders are private individuals, and qualified electronic signatures are used, the incorporation process usually takes around 2 to 3 weeks.
A personal visit is generally not necessary where qualified electronic signatures with time stamps are available. However, a visit may still be useful in certain cases, including where a Latvian foreigner’s eID card is to be obtained.
Yes. Founders and board members may obtain a foreigner’s eID card during a visit to Latvia, enabling them to act digitally and use a qualified electronic signature.
A Latvian foreigner’s eID card is an electronic identification card that allows a foreign individual to access certain digital services in Latvia and use a qualified electronic signature.
In practice, it can make the company formation process easier, because founders and board members can sign documents electronically instead of relying on paper documents, notarisation, and courier delivery.
It is also useful after incorporation, as it can facilitate ongoing communication with Latvian public authorities.
No. A Latvian foreigner’s eID card is an electronic identification tool, not an immigration or travel document. It may be used for electronic identification, signing documents, and communicating with Latvian public authorities, but it does not in itself give the holder the right to enter or reside in Latvia.
For an individual founder, the required information includes full name, valid ID card / passport details, Latvian personal identity number (if any), residential address.
If the founder is a legal entity, documents from the company register of its country of registration must be provided to confirm the company’s active status, name, registration number and legal address.
It is also necessary to provide documents confirming who is authorised to sign on behalf of the legal entity.
In addition, information and supporting documents must be provided to identify the company’s ultimate beneficial owner (UBO). This means documentary evidence showing the ownership and control structure of the legal entity. If the shareholder of the founder is another legal entity, documents for the entire ownership chain must be provided, up to the natural person(s) who ultimately own or control the structure.
Depending on the country of origin and the type of document, foreign official documents may also need to be legalized and translated into Latvian.
For each board member, the required information includes full name, ID card / passport details, personal identity number (if any) and residential address. If there is more than one board member, it must also be specified whether the board members will represent the company jointly or separately.
For a regular SIA, the current state fee is:
- EUR 75 for registration within 3 business days;
- EUR 225 for registration within 1 business day.
For a small share capital SIA, the current state fee is:
- EUR 20 for registration within 3 business days;
- EUR 60 for registration within 1 business day.
Yes. Shareholders of a small share capital SIA must create a minimum reserve each year by deducting at least 25% of the annual net profit. Additionally, a small share capital SIA may not distribute interim dividends.