Regulation of commercial activities in Latvia
Company formation and accounting in Latvia
Last updated: 2012-07-10
Commercial activities in Latvia regulate the Commercial Law, Civil law, other laws and norms of international law, obligatory for Latvia.

The following hierarchy (legal force) of normative acts exists in Latvia:
  • The Constitution;
  • Laws;
  • Regulations of the Cabinet of Ministers
  • Binding municipal regulations.

International law, regardless of its source, and European Union law apply according to their position in the hierarchy of normative acts. In case of contraction between international law and the same legal force (position in the hierarchy) Latvian law, then must apply international law.


General principles of law apply if normative acts do not regulate particular question (matter), as well as to the interpret laws and regulations

In case of contradiction between legal provisions of different legal force, then must apply legal provision that has higher legal force (higher position in the hierarchy of normative acts).

In case of contradiction between the same legal force general and special legal provisions, the general legal provision must apply to the extent that it is without prejudice to the special provision.

In case of contradiction between the same legal force legal provisions, must apply the latest legal provision (taking into account date of adoption).

In case of contradiction between the same legal force newer general and older special legal provisions, the older special legal provision must apply to the extent that its purpose is not inconsistent with the purpose of the newer general legal provision.

The main legal provision related to the commercial activities is the Commercial law. The Commercial law is a special law. Therefore, the provisions of the Civil law and other laws applies to commercial activities only if in the Commercial Law and other laws regulating commercial activity, is not stated otherwise.

The Latvian Constitutional Court has rights to declare a particular legal provision inconsistent to the Constitution of the Republic of Latvia. If the Constitutional Court declared a particular legal provision inconsistent to the Constitution, then the legal provision is void from date of publication of the judgement if the judgment is not otherwise specified.

The Commercial law applies to persons that are not merchants, or to entrepreneurial activities, which are not a commercial activities if in the Commercial Law or in other laws such provision is specifically stated.

Provisions of the Commercial law does not apply to agricultural production and other professional activities carried out by a natural person if such activities regulates other laws and if the person who performs the activities, is not recorded in the commercial register as a sole trader.

If only one of parties of a transaction is a merchant (company, sole trader, partnership), then provisions of the Commercial law applies to other parties of the transaction to the extent otherwise specified in other laws (for example, in the Consumer Protection Act).

After the Commercial law (other laws) applicable legal provisions with less legal force (lower position in the hierarchy of normative acts) are regulations of the Cabinet of Ministers. These regulations mainly determine payments (fees) for services of the Register of enterprises as well determines application forms.



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