Latvia has a rather small population of 2 million, which is mostly situated in the capital Riga. One of the key advantages of Latvia lies in its location and easy access to the neighboring countries. The country is situated at the east coast of the Baltic Sea, in the crossroads of Northern and Eastern Europe. The central location on the coast of the Baltic Sea connects Latvia to more than 300 million people of the neighboring Scandinavian and other Baltic countries and Eastern European.

Infrastructure is a strong business advantage but Latvia is also known for its skilled and multilingual labour force, invaluable natural resources, stable economic situation and great business potential to foreign and domestic companies. Latvia has the capacity to provide a solid business environment for companies of different sizes. This is demonstrated by the presence of wide range of well known international companies in Latvia.

Business operations in Latvia benefit from EU membership, which enables the free movement of goods, services, capital and labour. Latvia is also part of the euro zone.


The commercial activities are regulated by the Latvian Commercial law. The three most common forms of companies when entering Latvian market are limited liability company, branch of foreign company and permanent establishment. All of them have advantages and disadvantages in reporting, audit, taxation etc. We recommend brief consultation with us before deciding which business form is to be established.

There are no restrictions regarding citizenship of company representatives.

Registration with the state registry (Commercial Registry of Republic of Latvia) is mandatory for doing business in Latvia. The Company is considered a legal entity only after registration at the Commercial Registry. Registering a company is a fairly quick process. It usually takes 3-10 days after submitting all the necessary documents.


As from 2018 a 0% corporate income tax rate will be paid only when a company pays dividends or other payments with the aim of actual profit distribution (conditionally distributed profit). Corporate income tax at the rate of 20% will only have to be paid from the profit share which will be distributed or disbursed as dividends, or used for purposes not directly related to business development. It should be noted, that tax base should be divided by 0,8 and then 20% corporate income tax applied. Thereby, the effective tax rate will actually be 25%.

Personal income tax rates are: 20% for annual income not exceeding EUR 20,004.23% for annual income from EUR 20,005 to EUR 55,000. 31.4% for annual income exceeding EUR 55,000. The individual income tax rate on income from capital and capital gains is 20%.

Standard VAT rate is 21% reduced VAT rate for 12% is applied to food products for infants, pharmaceutical products, medical products for disabled persons, domestic passenger transport, books (excluding e-books), newspaper and periodicals, hotel accommodation and district heating.


The regulation of employment in Latvia is governed by the Labor Code and the employment legislation is harmonized with EU-regulations, although some details are slightly more employee-protective. At the moment unemployment rate is very low and Latvia suffers somewhat of citizens moving out from Latvia.

Expats are liable to pay resident taxes in Latvia only if they stay in the country for at least 183 days or longer during any 12 month period beginning or ending in a tax year. Self-employed people may regulate their own tax regime, including social contributions, and they are responsible for their own safety at work. They do not have social guaranties in case of accidents at work.

If an employer is reducing its number of employees or in case the business (legal person or partnership) is being liquidated, an employer has to give a notice of termination of an employment contract to the employee one month before, unless the collective agreement or the employment contract specifies a longer time period.


As Latvia is an EU-member state the moving and employment for EU-citizens is free. However a residence permit is necessary if the foreign national would like to reside in Latvia for a period of time exceeding 90 days within half a year counting from the first day of entrance. For non-EU citizens Latvia is one of the easiest countries to get working- and residence permits.

Especially in Riga area there are plenty of apartments available both furnished and non-furnished. Price level is very affordable comparing to other European capitals and public transportation is good. We highly recommend contacting a real estate agent for finding nice area to live in.

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