Registration of SIA

Opening company in Latvia

In accordance with the Commercial Law, in Latvia, merchants have the right to conduct commercial activities. A merchant is an individual or commercial company recorded in the Commercial Register as an individual merchant. Commercial companies are personal (personal) or limited partnerships (companies) and capital companies. Capital companies (formerly called “statutory companies”) are limited liability companies (LLC) and joint-stock companies (JSC).

A limited liability company is a legal entity.

Commercial activity is understood as an open economic activity, which is carried out by a merchant on his own behalf in order to make a profit. Economic activity refers to any systematic, independent activity for a fee.

A Latvian company in the form of a limited liability company (abbreviated in Latvian as “SIA”) is an easy-to-register and economical tool for conducting trading transactions with European suppliers and customers, it can also be used as a holding company.

1. General information on incorporation of SIA in Latvia

Types of SIA. There are two types of limited liability companies (SIA) in Latvia:

(A) a regular SIA. For a regular SIA minimum share capital is 2800 EUR, at least 50% of it should be paid before the registration to the temporary bank account; the remaining part is payable within a year from  registration.

(B) a reduced share capital SIA. For a SIA with reduced share capital the amount of the share capital is from 1 to 2799 EUR and it is payable in full before the registration. It is not necessary to open a temporary bank account for a reduced capital SIA.

N.B.: Shareholders of a reduced capital SIA shall every year create a minimum reserve by making a deduction of at least 25 % of the year’s net profit, that can be used to: increase the share capital, cover losses of annual report, cover losses of previous financial year.

Founder(s). A regular SIA may be incorporated by one or more private individuals or legal entities. A reduced capital SIA may be incorporated by individuals only (not more than five). After incorporation of a SIA, its founders become the shareholders thereof. There are no restrictions for non-residents to found and own shares in a Latvian company.

Management board. At least one member of the Management board shall be appointed by founders. A member of the management board may be a founder (shareholder) of the SIA or otherwise (not applicable to a reduced share capital SIA), and can be a resident or a non-resident of Latvia. Board members handle business operations, represent and manage the SIA.

Company’s governing bodies. The governing bodies of the company are the meeting of shareholders, the Management board and the council (if appointed). The meeting of shareholders makes decisions on the main issues of the company. The management board carries out current management of the company.

The name of SIA (firm name). The name of SIA shall not match the name of any entity that has already been registered or applied for registration with the Commercial register of Latvia, and shall not infringe the trademarks, which are in force on the territory of Latvia.

Share capital. The share capital can be paid by cash or property contribution.                                                                     

Articles of Association. Commercial law contains a minimum list of provisions necessary to be specified in the company’s Articles of Association. These are: the firm (name) of the company, the amount of share capital and the number of shares, the nominal value of one share, the right of board members to represent the company collectively or individually. The Articles of Association of most Latvian companies consist only of such minimal information and take no more than one page. The merchant has the right to specify in the Articles of Association any other provisions at its discretion, which should not contradict the peremptory norms of the Commercial Law.

Legal address. A SIA shall have a registered address in Latvia that shall be used for official communication. For the registration purposes the confirmation from the owner of premises shall be provided.

Ultimate beneficial owner(s) (UBO). UBO are private individuals, who either directly or indirectly own or control more than 25% of SIA capital shares. UBO and detailed information on how do they control SIA must be disclosed and registered.

A SIA is considered to be registered as a tax-payer at the same moment it is registered as a company in the Commercial register of Latvia. You can apply for a value added tax-payer number (VAT number) simultaneously with applying for the registration of SIA.

2. The process of incorporation of SIA

The process of registration can be performed remotely or founders/board members can visit Latvia in order to speed up the process. The founders/board members may save time if they opt for use of safe electronic signatures approved by the Commercial Register of Latvia.

3. Documents/information required for incorporation of SIA

For incorporation of a limited liability company (SIA) following information is needed:

1) Data on the founders (private individuals): given name, surname, valid passport number and issue date and authority, personal identity number (if the person has it), residential address.

2) Data on the founders (legal persons): name, registration number in the Company register of the relevant country, legal address; the document certifying that the Company is registered in the Company register and is still functioning (Certificate of good standing); the document certifying that named persons are entitled to sign the documents on behalf of the Company;

3) Representatives of the founder (legal persons): given name, surname, valid passport number and issue date and authority, personal identity number (if the person has it), residential address.

4) Members of management board of SIA: given name, surname; valid passport number and issue date and authority, personal identity number (if the person has it), residential address;

5) Rights of members of the management board to represent the company: if there are more than one member of the board appointed: information, whether the members of the management board will represent SIA collectively or individually;

6) Amount of the share capital of the Company;

7) Legal address of the Company;

8) Data on UBO: given name, surname, valid passport number and issue date and authority, personal identity number (if the person has it), day, month, and year of birth, residential address, citizenship, country of permanent residence, the way they control the legal person, as well as documentation substantiating the control.

N.B.: All official documents issued by the foreign authorities shall be legalized

4. Cost of registration of the company in Latvia.

 4.1. The state fee:

A) For registration of a regular SIA:

-within 3 business days – 150,- EUR;

-within 1 business days – 450,- EUR.

B) For registration of a SIA with reduced share capital:

-within 3 business days – 20,- EUR;

-within 1 business days – 60,- EUR.

4.2. Fee for publication for registration of:

1. a regular SIA – 27,03 EUR.
2. a SIA with reduced share capital – 14,23 EUR.

4.3. Fee for submission of the application in person – 4,-EUR.

4.4. Notary fees – according to the notary’s invoice (depending on the signatures to be certified, usually 80-250 EUR).

4.5. Translation fees – according to the translators’ office’s invoice (depending on the language and volume of the documents to be translated, usually 50-250 EUR).