Latvia: business without borders.
What can be attractive to Latvia for foreigners who chose this small Baltic country for living and doing business? A lot of ports in the Baltic Sea, a convenient railway system and automobile interchanges, developed air communication make it possible to maintain contacts with western and eastern countries. Latvia annually gets in ratings of the best states for business dealing. This is not surprising, because in Latvia there are no restrictions for companies, investors and start-ups from other countries. Only in the last 2 years 50% of new companies were registered in Latvia by representatives of Europe, America and the CIS.
Most of the business in Latvia is concentrated in the spheres of tourism and hotel industry, computer technologies, pharmaceuticals, woodworking, fishing and rural industries, construction and engineering. Foreign businessmen in Latvia most often open hotels, fitness centers, beauty salons and restaurants, build residential and office buildings. But the most profitable activity still remains tourism, it accounts for about 70% of the country’s GDP.
For a foreign businessman, Latvia can offer a number of advantages that distinguish it not only from its neighbors in the region, but also from many EU countries.
Full control over the company. In some countries, a foreign entrepreneur can not formally manage the company completely: for the opening of a legal entity and conducting commercial activities, a citizen of the country in which the firm is being established is employed. In Latvia, there are no such restrictions. The foreigner opens the company and independently controls, manages and disposes of it.
Easy registration. In Latvia, bureaucratic delays are minimized, and usually a long and complicated procedure for the registration of LLC takes only a few days.
The minimum authorized capital. The minimum amount of the authorized capital is 2000 lats (2.500 euros). When registering a company (LLC), the state provides an “installment plan” for the introduction of authorized capital into the company’s bank account. At the first stage, you only need to pay 1 lats (1.5 euros), and then for the first two years of the firm’s work, the founder contributes the full amount.
Low taxes. Corporate income tax in Latvia is 15%, income tax is 20%, tax on dividends is 0%, value added tax is 21%, VAT on trade transactions with companies from other countries is 0%. For small businesses with a turnover of up to 100 thousand euros a year, a special tax rate – 9%.
Residence . A foreign businessman can get a residence permit in Latvia. To do this, you need to pay 35 thousand euros in the authorized capital of the enterprise. Getting a residence permit allows you to travel unhindered to all EU countries, receive medical care, secondary and higher education.
Bilingualism. Businessmen from Russia will feel comfortable in Latvia. A large percentage of the population speaks Russian because of the proximity to Russia and, of course, the joint history.
Window to Europe . Latvia is a member of the European Union and the Schengen zone. Therefore, companies that have started their life in this country will easily enter the European market and gain access to large financial resources.
To conduct business in some areas, special licenses and permits will be required. For example, for the restaurant business, trade in tobacco and alcohol, freight, television and radio broadcasting, pharmaceuticals, construction and insurance. To obtain the required document, the founder must apply to the Licensing Commission under the State Revenue Service.
Some restrictions apply to company names. The name of the company must be in the Latvian language, it should include information on the form of ownership. And, of course, the name of the organization can not coincide with other company names in Latvia. Unlike in Russia, where using the words “Russia”, “Russian” and the like in the title, you need to get a special state permit, in Latvia no additional documents are required for this.
Organizational and legal form.
What is the best legal form for a young business? Everything depends on the number of participants or owners. Most often, businessmen open a limited liability company in Latvia, or in Latvian & # 8211; Sabiedriba ar ierobezotu atbildibu, abbreviated as SIA.
The company in Latvia can be opened independently or in partnership (no more than 5 founders). In case of legal violations, the founders risk only shares in the authorized capital, and not their own property. You can open branches in other cities and countries. Simple and fast registration (4 working days). The founders of the company are its full owners. In other states, a foreigner can not open a company without the participation of a resident of the country. In Latvia, there is no such requirement for the work of the organization. To manage the company does not require a permanent presence of the director in the country.
Other forms of doing business in Latvia:
An individual merchant (Individualais komersants) is a natural person (analogous to a Russian entrepreneur), all responsibility is borne by himself, with his property. Open Joint Stock Company (Akciju sabiedriba, AS) is an independent legal entity. The authorized capital is not less than 35 thousand euros. A branch of a foreign company – a foreign company can open a branch in Latvia. Work is conducted on behalf of the enterprise, but decisions are made by the heads of the branches themselves. Representation of a foreign company is created in another country to strengthen the position of the organization and does not conduct commercial activities. Has no independence.
The first thing you need to do to register an LLC, & # 8211; to collect all necessary documents: information about the founders (copies of passports), a notarized registration application, company charter, constituent contract or decision on the establishment (if the company has one founder), a receipt for payment of the state fee (142.29 euros), a certificate of entry to the account of the authorized capital (authorized capital is paid to a temporary bank account), information about the legal address (full office or mailbox). By the way, the legal address can be only Latvian (that is the de-jura company is in territory of Latvia).
The next step is & # 8211; submit a package of documents to the Register of Enterprises of Latvia. The application is considered 4 working days. If you pay a state duty in triplicate, the registration procedure will take only one day. If the Register of Enterprises has no claims, the applicant receives a certificate of registration of the company.
Having on hand a certificate of registration LLC, you need to register with the State Revenue Service (this can be done online through the Service website). It will take another 10 days.
Obtaining a visa, residence permit.
After the registration of the company, a foreign businessman can obtain a visa or a residence permit in Latvia. If commercial activity does not provide for a permanent stay in the country, then the best option is a category “C” visa. If an entrepreneur wants to permanently stay in Latvia, he will need to obtain a residence permit. If it is a question of LLC, then for obtaining residence permit it is necessary to invest at least 35 thousand euro into business development. However, residence permit in this case is issued only after a year of work of the company, since all taxes must be paid (not less than 27 thousand euros). The residence permit will be valid for 5 years, then you can apply for permanent residence. If the Representative Office of a foreign company is opened, then in order to obtain a residence permit, it is necessary to invest only 3,500 euros into your company.
But there is another way of obtaining residence permit in Latvia – buying a property worth at least 250 thousand euros, details on our website.
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We plan to open a company in Latvia in exchange for two, which we now have in other jurisdictions. It is clear that Latvian jurisdiction imposes certain restrictions and obligations. We plan to declare this company in Russia, file tax returns, pay all necessary taxes. The founder of the company will be one person – a Russian citizen who has a residence permit in Latvia, he will also be a director. We plan to transfer assets (a stake of foreign companies and cash) to a Latvian company.
Please help with some questions:
1. Which company to open? SIA with a capital of � 2800 or up to � 2800? With what capital do you recommend?
2. What kind of activity should I choose for the Company?
3. What is the registration procedure?
4. Is it possible to use the address of the founder’s Latvian apartment as a legal address for the Company?
5. What are the features of taxation of a particular type of company?
6. Is it possible to pay the expenses of the founder on the training of children in Britain, the expenses of the founder (his relatives) for rest from the Company? What kind of documents do you need to make?
7. Is it possible to purchase property by the Company, including the EU?
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Latvia: business without borders.