8/13/2019 The Global Company Formation Survey 2014. Latvia.

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2014 GLOBAL COMPANY FORMATION SURVEY: LATVIA

1. Company law:

2. Types of company:

3. Capital requirements:

4. Costs to incorporate, excluding government fees:

5. Fees paid to authorities to incorporate:

6. Annual fees paid to authorities:

7. Taxation rates applied to companies generally:

8. Method of incorporation:

9. Who may incorporate are local professionals required?

10. Length of time to incorporate:

11. Minimum number of members:

12. Directors and secretary:

13. Amount of fees payable to appointee directors/secretary:

14. Annual Meetings:

15. Is an annual return filed with details of directors and members?

16. Accounts:

17. Are there any exchange control or other financial restraints?

18. Is migration of companies permitted?

19. Must foreign companies administered locally be registered?

20. Are protected cell companies permitted?

21. Are civil-law type foundations possible?

22. Are common-law foundations possible?

23. Can LLCs be formed?

24. Are regulators empowered to request the production of:

25. Can such information be exchanged with other jurisdictions?

26 Any amendments to company law over the last 12 months?

27. Anticipated amendments to company law in 2014:

Commercial activities are being regulated by the Commercial Law (Komerclikums and Civil law).

(a) Type of company preferred for international transactions: Limited liability company.

(b) Shareless companies: Partnership, General partnership.

Minimum amount of equity capital of an LLC is LVL2,000 (approx. EUR2,850). At least 50% of

the equity capital of the LLC shall be paid upon submission of the registration application; the

remaining share shall be paid within one year from the day when the company was recorded in

the Commercial Register. Equity capital may be paid in money or by property contributions.

Equity capital of a company may be less than LVL2,000 (approx. EUR2,850), if the following

conditions are met: the founders of the company are natural persons, and there are not morethan five of them; the shareholders of the company are natural persons, and there are not more

than five of them; the board of directors of the company consist of one or several members, and

they all are shareholders of the company; and each shareholder of the company is a

shareholder of only one such company. If the equity capital of a company is less than the

LVL2,000 the company shall, each year, establish a mandatory reserve, making a deduction of

at least 25% from the net profit of the accounting year.

Costs for the notary public approx. LVL100 (approx. EUR150). Legal EUR1,500 - EUR3,000.

All of the documents which are not in Latvian shall have a notar ised translation (approx.

EUR25 for each).

State fee for recording the LLC in the Commercial Register is LVL100 (approx. EUR150) and

for the publication of the recording of the LLC LVL19 (approx. EUR28), the application will be

considered within three working days. Paying the threefold state fee, LVL300 (approx.

EUR428), the application will be considered within one working day. For a company with

small equity capital: state fee: LVL15 (approx. EUR22) for three days and LVL45 (approx.

EUR65) for one day. Fee for publication is LVL10 (approx. EUR15).

No, except taxes.

The taxation of companies in 2(a): 15% - no withholding tax on outgoing dividends to corporate

shareholders, except offshore (15%) and private individuals (10%), interest and royalties.

On the Register of Enterprises. Steps are as follows: decision regarding the foundation;

preparing necessary documents; opening of a temporary bank account; payment of the equity

capital; registration in Register of Enterprises; opening a permanent bank account; registration

in the State Revenue Service.

Any natural or juridical person. Professionals are not required, but may provide assistance

during the process.

(a) Are ready made/shelf companies available? Yes

One or three working days.

One

(a) Must there be a resident director/secretary? No; nominee shareholders are allowed.

(b) Are corporate directors allowed? No

(c) Is a local registered agent required? No, but the registered address (registered agent) must be

in Latvia.

(d) Are shadow directors required to be registered? No

Director starting from EUR3,500 p.a.; Secretary starting from EUR1,500 p.a. Amounts

depend on activities to be performed during the year and are discussed individually.

Shareholders' meetings shall be held at least once a year.

Yes

(a) Must financial statements of a company be audited? Yes, if company meets at least two of

following criteria: balance sheet total: LVL250,000 (approx. EUR357,000); net turnover:

LVL500,000 (approx. EUR714,300); average number of employees in the accounting year: 25.

(b) Are annual accounts filed with annual returns? YesTransactions made in cash of over LVL1,000 (approx. EUR1,430) must be declared.

Permitted only for European Companies (Societas Europaea).

No only where there is a PE.

No

Yes

It is possible to establish a general partnership. It is also possible to establish a limited

partnership.

Yes

(a) Information on the identity and background of beneficial owners and officers: Yes

(b) Accounting information on companies. Yes

Yes

Amendments where passed last year in order to avoid illegal takeover of companies or, as it is

called regionally, to avoid Raiders. Anti-raiders amendments foresee more cases in which anotarised signature is mandatory as well as new rules for the shareholders register, payment

of dividends and transfer of shares.

Amendments necessary for the introduction of EURO as the official currency in Latvia.

Compiled by BDO Tax

OI 244 March 2014 Offshore Investment 2014. Reproduction in whole or in part by any means without the written permission of the publisher is strictly prohibited.