Differences if foreign private person and foreign company forms Latvian company
Company formation and accounting in Latvia
Last updated: 2012-07-10
Foreign private (natural) persons and foreign companies have rights to form Latvian company. However there are differences in case if a founder is private person and a founder is a company.

If foreign private person forms Latvian limited liability company.

The private person can choosy what type of company to form: limited liability company with equity capital less than 2800 euro or company with equity capital 2800 euro and more.

If to form a company with equity capital less than 2800 euro, then amount of state duty is 21,34 euro and payment for publication is 14,23 euro. Whole equity capital must be paid before registration and the equity capital can be paid only by money. There is no requirement in legislation to submit bank document certifying the payment (founders can mark in the registration application and certify with a signature that the equity capital is paid).

If you want to form a company with equity capital 2800 euro and more, then state duty is 142,29 euro and payment for publication is 27,03 euro. At the moment of registration you must pay at least 50% of the equity capital.
If you pay the equity capital (or part of it) by money, then need to open temporary bank account and to pay in the bank account necessary sum of money. To the Register of enterprises need to submit bank document certifying payment of the equity capital.
If you pay the equity capital (or part of it) by other material contribution, then you need to prepare and sign a document where you or special person valuate each item of the material contribution. Founders of a company themselves can valuate the material contribution if total amount of the material contribution is less than 5700 euro and total material contribution is less than 50% from total of the equity capital. Otherwise special person (expert that is included in the list approved by the Register of enterprises) must valuate the material contribution.

What are the conditions to have rights to form limited liability company with equity capital less than 2800 euro? The conditions are following:
  • founders and shareholders of the company are private (natural) persons and not more than five;
  • all members of the board of directors also are shareholders of the company;
  • each shareholder has shares only in one company with equity capital less than 2800 euro.
If at least one of the above conditions is not fulfilled, you must form a company with equity capital 2800 euro and more.

In both cases the company has rights to get status of micro-company tax payer (if other conditions are met).

If foreign company (legal person) forms Latvian limited liability company.
In such case:
  • You have rights to form company only with equity capital 2800 euro and more.
  • You have no rights to get status of micro-company tax payer.
  • Additionally to the other formation documents you must provide a documents that proves that the foreign company exists (not liquidated) and also proves rights of certain natural person to represent the foreign company. If documents are not in Latvian, then need translate them to Latvian and certify the translation before notary public (sworn notary).



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