Set up a company in Latvia.

Latvia uses an Estonian-style cash-flow corporate tax model. Tax on corporate profits is deferred entirely until profits are distributed (as dividends, deemed dividends, or used for non-business expenses). If the company reinvests profit into the business, the CIT rate is 0%. When profit is distributed, 20% CIT is applied to a gross-up base (taxable amount ÷ 0.8), so the effective CIT is 25% of the distributed amount. The CIT liability is recorded as an expense at the date dividends are declared, and tax is filed monthly via VID.

Typically 2–4 weeks from instruction to a fully operational entity with bank account, Register of Enterprises registration, and VID tax/VAT registration. The notary step and the Register of Enterprises filing usually complete within 1–2 weeks; the longest single step is normally bank account opening for non-EU shareholders. An AS typically runs to 4–6 weeks given the heavier capital and governance requirements.

A "small SIA" (sometimes called a low-capital SIA) is a special variant where the minimum share capital can be as low as €1, provided strict conditions are met — typically the founders are individuals, the number of shareholders is limited, and certain reserve-fund obligations apply. Standard SIA minimum capital is €2,800. We assess eligibility for the small-SIA route at the structure design stage and recommend it where it materially helps the founder's cash-flow position without compromising the longer-term plan.

For SIA: no nationality or residency requirement for shareholders or directors. Foreign nationals and non-EU residents can both own and direct a Latvian SIA. For AS: at least one board member must be resident in an EU/EEA or OECD member state. For all structures, having at least one director with EU presence helps with bank account opening and signals genuine local engagement.

From 1 January 2026, companies whose shareholders are exclusively individuals can opt for a 15% CIT rate on dividends (gross-up to 0.85, effective ~17.65%) plus 6% PIT withheld on the dividend. The standard regime is 20% CIT (gross-up to 0.8, effective 25%) with 0% PIT for the individual recipient. For closely-held founder-owned businesses extracting profit at modest scale, the new regime is generally more efficient. We model both at the structure design stage when the shareholding profile makes the new regime available.

Annual financial statements filed with the Register of Enterprises per Latvian GAAP or IFRS, monthly CIT returns when profits are distributed (filed by the 20th, paid by the 23rd of the following month), monthly or quarterly VAT returns, monthly VSAA social security filings if employing staff, and the annual State fee. Note that because CIT is monthly and event-driven, in many quiet months there is nothing to pay — only the periods with dividend distributions or non-business expenses generate a tax liability.