Legal services and legal protection of business in Latvia - COREDO

Legal services and legal protection of business in Latvia

Latvia may not be the richest and most prosperous country, however, its membership in the European Union and a successful transition to a stable market economy make it fairly popular for starting a new business. Moreover, it is one of the most developed countries among the post-Soviet states and ranks 3rd after Estonia and Lithuania. The service sector forms about 70% of the country’s GDP with a well-developed financial sector, and recent active growth in industrial production, including engineering, manufacturing of electrical goods, textile products, and others. Interest in investing in the Latvian economy increases year after year, and foreign businessmen are offered favourable conditions. Moreover, foreign citizens who invest more than EUR 50,000 in the fixed asset of a Latvian company can obtain a residence permit here. In 2020, the volume of foreign direct investment (FDI) in the country’s economy amounted to 16.67 billion euros. However, novice businessmen may face difficulties in filling out the documentation (which is only available in Latvian) and opening an account with a local bank.


Latvia ranks 19th out of 190 countries in the World Bank’s Ease of doing business index (data for 2020). The Latvian real estate market, and particularly the construction of new residential and office complexes, is especially attractive to foreign investors. Other appealing sectors include transit and logistics, technology, tourism, financial services, woodworking, beauty, and health.

A non-resident in Latvia can start a business with 100% foreign participation. The country offers five Special Economic Zones (SEZs) with significant benefits for companies, such as reduced tax rates and tax refunds. In June 2020, special tax privileges for job creation in business entities within the SEZs, resulting from initial long-term investments, began to operate in the Rezekne and Latgale SEZs. Additionally, the state provides various types of support for start-ups and micro-enterprises, including income tax benefits of up to 100% and funding of up to 45% of highly skilled workers’ salaries, among others.


The taxation system in Latvia is considered to be one of the most flexible in the EU. Both local and foreign companies that conduct economic activities in Latvia and generate income from it are subject to corporate income tax. However, this tax is paid only if the dividends are distributed among the participants or shareholders of the company. The basic corporate income tax rate is 20%. Additionally, there are other taxes in the country. For instance, the base VAT rate for business within Latvia is 21%, while the reduced VAT rate can be 12%, 5%, or even 0%, depending on the type of goods produced or services provided, as well as the geographical location of the activity. Insurance payments for hiring employees amount to 35.09%, with 24.09% paid by the employer, and 11% by the employee.


In Latvia, as in most other countries in the world, certain activities require a state licence. These activities include:

  • sale of alcohol and tobacco products;
  • financial activities;
  • tourism activities;
  • provision of medical services;
  • telecommunications activities;
  • insurance;
  • geological work;
  • cargo transportation and transportation of passengers and some others.

In most cases, obtaining a licence in Latvia as a non-resident is not difficult. However, there may be hiccups and difficulties at times, often due to incorrectly filled-out documents or incomplete submissions.


In Latvia, companies are required to submit financial statements to the State Revenue Service. According to the regulatory requirements, companies operating in the country must submit their annual financial statements. These reports can be submitted in both paper and electronic formats. The annual report must be submitted within four months and 30 days after the end of the financial year. It must include the balance sheet, profit and loss statements, funds report, and the overall state of affairs in the company. Individual enterprises, peasant and fishing enterprises, with annual income not exceeding 300 thousand euros, report in a simplified manner.


Legal services are in demand at various stages of doing business: from the registration of a new legal entity to the submission of reports. COREDO specialists are ready to provide timely and high-quality assistance with any issues, which include:

  • preparation of all necessary documents, their translation, and notarization;
  • preparation of financial, tax, and legal Due Diligence;
  • expert assessment of agreements, contracts, and other documents;
  • preparation of tax reporting;
  • representation of the interests of a business in courts, etc.

These services are provided by experienced lawyers who thoroughly understand all the intricacies and peculiarities of the legal system of Latvia and the European Union.


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