Starting a business in the country is quite easy and lucrative. With the numerous incentive policies introduced by the government for the benefit of foreign investors and local business owners, the prospects of setting up a company within the republic are limitless. Once one has a business idea, there are different companies to choose from namely, a private limited company (SIA), general partnership, limited partnership, sole trader, or even a branch of a foreign company. Any of them can be set up in a short period, registered, and incorporated.
Types of companies
Of the six different types of companies allowed to operate in the republic, the commonest kind of business entity is SIA. It is the easiest to register and less expensive to run by European vendors looking to start a small business. The minimum share capital for set up is 2800 EUR, and at least 50 percent must be paid before registration and the remaining part is to be paid within a year after the registration.
Features of a company
The following are features of a company engaging in business activities in the republic.
Founder
A company should have one or more individuals or corporate entities as founders. Non-residents are allowed to establish a company and own shares in a local company.
Board
The management board is a group of persons appointed by the founding members. They are to handle the operations of a business and represent and govern the affairs of the company. Sometimes a board member can be a founder. Non-residents can be appointed as a member of the board.
Business name
The name of a company should be unique and not like that of any entity in existence, registered, or applied for in the commercial register. It should not infringe on any trademarks too.
Share capital
The minimum share capital contributed by the founders is paid in cash or as a property contribution.
Legal address
Every company must register a legal address that it will use for official communication.
Incorporating a company
Registering a company within the territory can be carried out online or in person. The founders can opt for the use of qualified electronic signatures. There are a few steps to registering a company. Firstly, they are to draft the incorporation documents, open a temporary account for the payment of the share capital, notarise any documents, if necessary, then submit the form and documents for registration within 1 to 3 business days, depending on the state fee paid. The timeline for registering a company varies depending on the type of company and the state fee paid. Some last 10-15 days while others take up to 20 days of processing. Once it is processed, a certificate of registration is issued to the founders. Note that all documents have to be in Latvian.
Documents required for company formation
To incorporate a company here, an applicant has to provide the following documents:
- Names, passport numbers, TINs, and addresses of the founders
- Name, registration number, registration certificate, etc. of corporate founders
- Names, passport numbers, and TINs of founders’ representatives
- Details of the board members
- Board members’ representation rights must be proven (stated in the Article of Association)
- Proof of share capital contributed
- Legal Address, etc.
Registration costs
The state fee for registering a company varies on the timeline of registration. Registering an SIA within 3 business days costs 150 EUR and 1 business day costs 450 EUR. Applying in person costs 4 EUR. Notary fees usually cost around EUR 80 to EUR 250. Translation fees if an application requires the services or not depend on the volume of documents to be translated.
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