Published on and written by Cyril Jarnias
Setting up in Latvia means entering the entire European market through a strategic gateway, while benefiting from a fast-accelerating startup ecosystem, a tax system that’s atypical in Europe, and costs significantly lower than in most Western European countries. For an expatriate, it’s both an efficient operational base and a relatively affordable living environment.
This guide details the essential aspects for a foreign entrepreneur looking to settle in Latvia: analysis of the economic environment, choice of legal form, taxation, administrative procedures, obtaining entrepreneurial visas, financing options, identification of promising sectors, estimated costs to anticipate, and tips for expatriate life on the ground.
Why Latvia is increasingly attracting foreign entrepreneurs
Latvia ticks several boxes that mobile founders look for: EU membership, the eurozone and Schengen, highly digitalized procedures, pro-investment taxation, a decent standard of living but still moderate costs, a skilled and multilingual workforce, and a booming startup ecosystem.
Latvia’s GDP, a country of over 2 million inhabitants, stands at approximately 23.4 billion USD.
The authorities have made welcoming startups a priority. Latvia was ranked the most “startup-friendly” country in the world by Index Ventures in 2021, and its ecosystem has only strengthened since. The total value of Latvian startups multiplied by 5.3 between 2019 and 2024, the fastest growth in the Baltics. There are now over 500 active startups, nearly a quarter of which were founded by foreigners, creating more than 4,000 direct jobs already.
For an expatriate founder, setting up in Latvia doesn’t mean being an isolated case. The system is fully prepared: the legal, banking, and tax frameworks are streamlined to welcome non-resident entrepreneurs. This includes individuals outside the European Union, who receive the same legal treatment as local investors.
Key advantages for a foreign founder
Several structural elements explain the country’s attractiveness for company incorporation:
| Advantage | Description |
|---|---|
| Market access | Member of the EU, eurozone, and Schengen, direct access to the single European market |
| Geographic location | Logistics hub linking Scandinavia, Western Europe, and Russia, with three deep-water ports (Riga, Liepaja, Ventspils) |
| Business climate | Country ranked in the global top 30 for ease of doing business; regulation considered simple and pro-business |
| Taxation | Corporate income tax at 20% only upon profit distribution; reinvested profits are tax-free |
| Costs | Cost of living and labor lower than in Western Europe; salaries and business rents still competitive |
| Workforce | Young, educated, multilingual population (Latvian, English, Russian, often German, French, or Nordic languages) |
| Digitalization | Heavily digitalized registration procedures, widespread e-signature, mandatory official e-address for new companies |
| Ecosystem | Over 500 startups, 1 unicorn (Printful), numerous funds and accelerators, specific startup support law |
Added to this is an often overlooked point: the Latvian state alternates direct financial support (grants, co-financing, EU programs) and targeted tax relief (special economic zones, micro-enterprise regimes, incentives for startups), all within a legal framework aligned with European legislation.
Understanding legal structures: choosing the right form for your project
Latvia offers several forms for conducting business. For an expatriate, one form clearly dominates: the limited liability company, known as “SIA.”
The classic SIA: the go-to form for foreign founders
The SIA (limited liability company) is the most common structure for SMEs and startups. It has several characteristics:
– Limited liability of members to their contributions
– Possibility of a single member and a single manager
– No need for a Latvian national as member or director
– Fast registration with the Enterprise Register
The minimum share capital for a standard SIA is €2,800. At least 50% (i.e., €1,400) must be paid up at the time of registration, with the balance payable later. A capital of at least €2,800 helps avoid certain legal limitations and strengthens the company’s credibility with banks and partners.
The micro-SIA (reduced capital): start small but think big
Latvia has introduced a variant of the SIA with “micro-capital”, with a capital between €1 and €2,799. Very popular (nearly 80% of newly created companies in 2024 were of this type or a single-founder SIA), this model allows entering the market with very little equity.
This flexibility comes with restrictions: limitations on shareholding structure, number of founders, and sometimes profit distribution. For an expatriate aiming quickly at fundraising or international markets, the micro-SIA can be an intermediate step, but the classic SIA remains more comfortable in the medium term.
Other possible forms, more specific
Other structures exist but concern more specific cases:
To set up in Latvia, several structures are possible. The SIA (limited liability company) is the most common for SMEs, with a minimum capital of €2,800. The AS (joint stock company) is suitable for large projects or listed companies, with a minimum capital of €35,000. The IK (sole proprietorship) offers simplified taxation but unlimited liability, which does not protect personal assets. Partnerships (PS and KS) are rarer for foreigners. A foreign company can also opt for a branch (without separate legal personality) or create a local subsidiary (SIA or AS). Finally, a representative office allows testing the market without conducting commercial acts.
In most entrepreneurial expatriation scenarios (startup, service agency, e-commerce, consulting activity, etc.), the SIA stands out as the best compromise between flexibility/protection/credibility.
The main stages of incorporation: from idea to tax number
Even though administrative timelines are short (often 1 to 3 business days for registration once the file is complete), you should allow 2 to 4 weeks for everything to become operational (bank, accounting, VAT, potential licenses, etc.). The process follows a fairly standard European logic, but with some local specifics.
Step 1 – Preparation: name, activity, address
Before entering the administrative machinery, three elements must be locked down.
1. Define a company name
The name must be unique and include the mention “SIA” (before or after). It must comply with certain constraints (no misleading terms, names of public institutions, or offensive vocabulary) and can be checked online in the commercial register database.
2. Specify the activity with NACE codes
As in the rest of the EU, activities are classified according to the NACE 2.0 nomenclature. It is crucial to choose codes consistent with the actual business, as tax authorities now closely scrutinize any inconsistency between what is declared and what is actually done (especially for VAT registration).
Each company must have a legal address within Latvian territory. Here are the different options available to meet this legal requirement.
Use your own commercial or personal premises as the company’s legal address.
Rent professional offices that will serve as the official registered office of your company.
Opt for a coworking space offering a legal domiciliation service in addition to workstations.
Choose a ‘virtual office’ service providing a legal postal address without requiring physical premises.
Domiciliation offers typically range from €100 to €500 per year. This address will serve as the official point of contact with the authorities; an electronic e-address is also automatically assigned to new companies.
Step 2 – Drafting the articles of association and preparing the file
The core of the registration file is based on legal documentation. All documents intended for the register must be in Latvian. Specifically, you need to prepare:
– the Articles of Association,
– the decision to incorporate or the minutes of the founding meeting,
– the list of members,
– proof of entitlement to the legal address (lease, letter of availability),
– copies of passports of members and directors (with notarization and apostille for certain foreign documents),
– proof of capital deposit,
– proof of payment of state fees and publication in the official gazette.
Since 2024, the Enterprise Register offers an automated online service capable of generating certain standard documents in minutes for the simplest cases (single founder). But the language remains Latvian, which encourages most foreign founders to use a lawyer or specialized provider.
Enterprise Register
Step 3 – Capital deposit and opening a temporary account
Before registration, it is mandatory to open a temporary bank account to deposit the share capital. Any EU bank can be used, but most founders choose a Latvian bank or a fintech solution with recognized European presence.
At least 50% of the capital of a standard SIA must be paid up (100% for a micro-SIA). The bank will issue a deposit certificate to be included in the file.
For non-residents, a higher level of scrutiny should be expected (KYC/AML checks, justification of source of funds, clarifications on the business model). A physical visit to Latvia is often required by traditional banks for account opening, especially for non-EU residents.
Step 4 – Submitting the application to the Enterprise Register
Registration is done with the Uzņēmumu reģistrs (Enterprise Register), either:
– online, via the official portal, with a qualified electronic signature (eID, Smart-ID, etc.),
– by mail, with notarized signatures from a Latvian notary.
State fees depend on the type of SIA and the desired speed. Figures vary slightly by source, but the following orders of magnitude apply:
| Cost item | Indicative amount |
|---|---|
| Standard SIA registration fee | ~€30 to €150 depending on source and options |
| Micro-SIA registration | ~€20 |
| Express processing (1 day) | up to ~€450 |
| Publication in the official gazette | ~€27 |
| Notary fees (certification of signatures, etc.) | ~€50 to €100 |
| Legal fees / document preparation | ~€150 to €450 or more |
Once the complete file is received by the Enterprise Register, the standard processing time is 1 to 3 business days. For urgent cases, registration can be done in 24 hours at an additional cost.
Step 5 – Tax number, VAT, and accounting obligations
After registration, your company receives a tax identification number from the State Revenue Service (VID). VAT registration becomes:
– mandatory above €50,000 in annual turnover,
– optional below that, but often recommended for B2B or internationally oriented structures.
The standard VAT rate in Latvia is 21%, with a reduced rate of 12% applicable to certain goods and services. The tax administration (VID) is increasing its vigilance on VAT registrations and now requires concrete proof of actual economic activity, such as contracts, premises, or a website, to combat shell companies.
From the first operations, it is essential to hire a local accountant. Outsourced services start around €70 to €100 per month for a small structure and increase based on transaction volume. A salaried accountant costs between €1,000 and €2,500 gross per month.
A realistic budget for a “turnkey” launch of an SIA, relying on local service providers, is typically between €1,000 and €3,000 (excluding share capital).
Taxation: corporate income tax designed for reinvestment
This is one of the most attractive advantages of the country for a founder: as long as you do not distribute your profits, corporate income tax is neutral. In other words, reinvested profits are tax-exempt.
How corporate income tax works in practice
The nominal corporate income tax rate is 20%, but it applies to an adjusted base. Specifically, when you distribute €100 in dividends, the taxable base is considered to be 100/0.8, i.e., €125. The 20% tax on €125 then equals €25 for every €100 of net profits distributed. This is sometimes referred to as an “effective” rate of 25% on net distribution.
As long as profits remain in the company (reinvestments, reserves, acquisition of productive assets, etc.), no corporate income tax is due. This logic is particularly attractive for startups that burn cash initially and then, when they become profitable, continue to reinvest everything.
Simplified regimes for very small structures
For micro-activities, there is a micro-enterprise regime based on turnover, with a rate of 25% if certain conditions are met (turnover cap, limited number of employees, capped salaries). This regime simplifies management for very small volumes.
However, for an expatriate aiming for growth or planning to raise funds, the classic SIA under the normal regime is generally preferable, especially with the system of non-taxation of undistributed profits.
On the VAT side, the rules are in line with EU standards:
– 21% standard rate,
– 12% for certain goods and services,
– mandatory registration threshold at €50,000 annual turnover.
Social contributions are relatively high, but consistent with European systems:
– approximately 23.59% paid by the employer,
– approximately 10.5% paid by the employee,
– personal income tax at 25.5% according to one source (other sources indicate a progressive scale, but the order of magnitude remains this for a self-employed person).
Latvia has signed more than 60 double taxation treaties. For an expatriate, this is a key point to check with a tax advisor to optimize the situation between the home country and Latvia.
Focus: sectoral tax advantages and special zones
Certain geographic areas (free ports of Riga, Ventspils, Liepaja, special economic zones of Rezekne and Latgale) offer significant tax relief for companies investing there, with reductions potentially reaching 80% of corporate income tax and property tax, within limits calculated as a percentage of the amount invested (between 30% and 60% of investment).
For an industrial or logistics project, these regimes deserve close attention.
Entrepreneurial visas and residence permits: from startup visa to investor
Creating a company does not automatically grant the right to reside. For a non-European expatriate, the question of residence title is therefore central. Latvia has established several advantageous options for founders.
The Startup Visa: the entry point for innovative founders
Latvia offers a dedicated scheme for non-EU startup founders: a temporary residence permit often called a “startup visa.” It is a residence permit (not a simple Schengen visa) valid for up to three years.
Main features:
– reserved for innovative and scalable projects, typically tech,
– up to five founders can benefit for the same startup,
– the project must be beyond the mere idea stage: proof of customers, financial flows, product in development or already on the market,
– possibility to include the spouse and children,
– processing time of approximately one month,
– the business plan must be approved by the Investment and Development Agency (LIAA) or an authorized body.
The application file includes:
Minimum amount required in a bank account per adult to demonstrate sufficient means of subsistence for an entrepreneur visa application, according to some sources.
For a foreign founder with a genuine startup project who wants to integrate into the local ecosystem, this program is particularly competitive, especially since it allows the spouse to work freely.
The residence permit by investment: the “business / golden visa” option
In parallel, Latvia has a residence by investment program introduced in 2010. Several options exist:
| Investment option | Minimum amount | Nature of investment |
|---|---|---|
| Equity in a Latvian company (small enterprise) | €50,000 | Capital investment + contribution to the budget of €10,000 under certain schemes |
| Equity in a larger company | €100,000 | Company capital, enhanced financial conditions |
| Real estate | €250,000 | Purchase of real estate, with additional fees and contributions |
| Bank deposit | €280,000 | Five-year deposit in a Latvian bank |
| Government bonds | €250,000 | Investment in public securities |
Each option involves state fees ranging from €10,000 to €38,000. This permit, often valid for five years, is mainly intended for high-net-worth individuals. It can lead to permanent residence and then citizenship, subject to presence requirements and language/history tests.
Digital Nomad Visa: working remotely from Latvia without local clients
For freelancers and remote employees, Latvia also offers a remote worker visa (“digital nomad”) since 2022. It is aimed at people working for a company or entity based in an OECD member country.
Key points:
The remote work visa for Latvia is valid for one year, renewable once. It requires maintaining a contract with a company in an OECD country and strictly prohibits working for Latvian clients. The minimum income requirement is indexed to the average Latvian salary (approximately 2.5 times the average gross salary, i.e., over €3,000 per month). International health insurance is mandatory.
This scheme is not an entrepreneur visa in the strict sense, but can serve as a stepping stone to live on the ground, test the country, and prepare a local entrepreneurial project while keeping foreign clients.
EOR: creating a local presence without an entity, to test the market
If you want to hire in Latvia before even registering a company, there is an alternative: using an Employer of Record (EOR) like Multiplier.
In practice, the EOR becomes the legal employer of your Latvian employees, handling employment contracts, payroll, social contributions, and ensuring compliance with local labor law. You retain operational control. This is an ideal solution to test a market or recruit a first commercial/tech team before opening an SIA.
However, this arrangement does not allow you to sell directly in Latvia in your name, nor to hold real estate assets or operate in regulated sectors. It therefore does not replace a proper establishment for a structured project.
Promising sectors: where an expatriate has real cards to play
Beyond the favorable “macro” environment, the key for an entrepreneur is the field: which sectors are truly promising and welcoming?
Technology and digital: a young but already rich ecosystem
Information and communication technologies represent a major pillar of the Latvian economy, with a turnover of around $4.6 billion (approximately 6% of GDP). The country ranks 3rd in Europe for the number of computer science students per million inhabitants.
Key sub-sectors include:
– telecommunications,
– software,
– cloud solutions,
– artificial intelligence,
– automation and robotics,
– IT support.
A large number of iconic startups have been born there:
– Printful: the country’s first unicorn, specialized in print-on-demand,
– Printify: another print-on-demand giant, merging with Printful,
– Mintos: long-term investment platform founded in 2014,
– 4finance: fintech that raised over €734 million,
– Naco Technologies, SummarizeBot, LightSpace Technologies, Longenesis, Tilde (linguistic AI)…
The tech ecosystem is solid but modest in size compared to major European hubs, allowing you to integrate and carve out a place relatively quickly, especially with a network or prior experience gained abroad.
Fintech: a collaborative regulatory framework
The fintech sector is described as mature and well-regulated, with a regulatory environment co-built with the Latvian Financial Industry Association. The authorities position themselves not only as “watchdogs” but as partners to secure innovations.
For an entrepreneur in digital finance (online lending, investment platforms, payments, crypto, insurtech), Latvia thus offers a framework that is both demanding and relatively predictable, which is not the case in all countries.
Industry, engineering, and deeptech
Latvia has a long industrial tradition:
– world-leading manufacturer in fiber optic technology,
– strong sectors in light metallurgy, wood processing, and agrifood.
Structures like Commercialization Reactor, ESA BIC Latvia, or specialized incubators (VEFRESH Urban Mobility Incubator, BioCatalyst) support deeptech projects (photonics, smart materials, smart energy, biotechnologies, etc.).
Government priorities notably include:
– biomedicine / medical technologies / pharmaceuticals,
– knowledge-intensive bioeconomy,
– smart energy and mobility,
– photonics, smart materials, advanced engineering systems.
For expatriates with scientific, industrial, or R&D profiles, Latvia offers a more accessible and responsive environment than some large Western European countries. Additionally, they can benefit from EU grants, managed locally by the LIAA agency (Investment and Development Agency of Latvia).
Forestry, wood, green energy: green and export-oriented Latvia
Over 50% of the territory is covered by forests. The wood sector (logging, processing, timber construction) accounts for about 20% of national exports, of which 80% goes abroad.
In parallel, Latvia ranks 3rd in the EU for renewable energy use, with opportunities in:
– solar,
– wind,
– hydropower,
– hydrogen,
– innovative solutions (ammonia as an energy carrier, etc.).
For an expatriate positioned in cleantech, sustainable construction, innovative materials, or biomass valorization, the country offers a particularly rich testing ground.
Tourism, leisure, health, and wellness
Before the pandemic, tourism was experiencing significant growth, attracting major hotel names (Accor, Kempinski, Hilton, Marriott…). Riga, its UNESCO-listed old town, Gauja National Park, and the Baltic Sea coast are magnets for city breaks and nature stays.
Despite the impact of the pandemic and the war in Ukraine on the sector, there is still significant room for developing value-added concepts.
– local experience agencies (nature, gastronomy, history),
– themed accommodations,
– wellness stays, yoga retreats, fitness centers,
– health and wellness services (nutritional coaching, psychology, fitness).
Lower costs allow creating competitive offers for a European clientele while maintaining a comfortable margin.
Professional services and creativity
Demand is growing in:
– business consulting, finance, law, HR,
– creative services (design, fashion, film, visual arts),
– digital content, online advertising, SEO/SEA, social media management,
– B2B export services (marketing, outsourced sales, multilingual customer support).
For an expatriate coming from a large market and bringing a niche positioning (e.g., consulting for French-speaking companies wanting to export to Nordic countries via Latvia), it is possible to combine local cost advantages with Western-standard billing.
Financing, support, and ecosystem: who can concretely help you
Latvia’s strength lies not only in its laws and taxation but also in a coordinated ecosystem between the state, research, and the private sector. It is often referred to as a “triple helix” model: industry – research – public authorities.
Public and semi-public institutions
Several key players to know:
– LIAA (Investment and Development Agency of Latvia): manages numerous EU-funded programs (innovation vouchers, export grants, digitalization support, incubators…),
– Ministry of Economics: steers major orientations and organizes networking events between startups and businesses,
– ALTUM: public development finance institution, co-managing venture capital funds (e.g., BADideas.fund, Outlast Fund, Buildit VC),
– Chambers of Commerce (notably the Latvian Chamber of Commerce and Industry): business network, lobbying, events.
For expatriate founders, the LIAA (Investment and Development Agency of Latvia) program Magnetic Latvia Startup serves as a practical one-stop shop. It provides information on the legal environment, facilitates connections with incubators, and puts you in touch with service providers.
Incubators, accelerators, and funds
Riga concentrates most of the activity, with:
Riga offers a dynamic and comprehensive environment for entrepreneurs, with collaborative workspaces, specialized support programs, and a focus on diversity.
A dedicated physical space of over 1,100 m², reserved for startups, investors, and ecosystem players. It offers offices, flex desks, meeting rooms, phone booths, and organizes regular events.
Spaces like Double9, TEIKUMS, Workland, or Magnēts welcome freelancers, small teams, and startups, offering a community-oriented and flexible alternative.
A range of programs, some backed by universities (University of Latvia, Riga Technical University, Rīga Stradiņš University), support nascent and growth-stage projects.
Specialized structures like Commercialization Reactor, ESA BIC Latvia, and BioCatalyst support innovative projects in cutting-edge technologies.
Riga TechGirls is an example of a program aimed at increasing the share of women in tech. Currently, 26.4% of Riga startups are led by women.
On the funding side, in addition to business angels gathered in the LatBAN network (over 75 members, more than €15 million invested in over 150 startups), several funds operate on the local and regional market:
| Player | Positioning |
|---|---|
| BADideas.fund | Early stage, venture capital, managed with ALTUM |
| Buildit VC | Focus on hardware/IoT, tickets up to €1.5M |
| Draugiem Capital | Targets tech and e-commerce companies already generating revenue |
| Outlast Fund | Baltic-Nordic VC fund |
| LatBAN | Business angel network, early co-investment |
Events and networking
For an expatriate arriving, connecting quickly involves attending key events:
– TechChill (Riga): major tech and startup conference,
– Deep Tech Atelier: focused on deeptech, research, industry,
– Latitude59 (Tallinn), Slush (Helsinki): Baltic-Nordic events well attended by Latvians,
– specialized forums like the Latvian Fintech Forum.
Communities like TechHub Riga (now integrated into Startup House), numerous meetups and groups (Meetup.com, InterNations, sector associations) make it possible to build a network in a few months, provided you are proactive.
Budget, cost of living, and setup costs: what to really expect
One of Latvia’s major attractions, especially compared to Western Europe, remains the cost-to-quality ratio.
Startup and operating costs of an SIA
Aggregating various data, we can outline the typical startup costs:
| Item | Indicative range |
|---|---|
| SIA share capital (minimum) | €2,800 (up to tens of thousands depending on project) |
| Registration & publication fees | €50 to €200 (more for express processing) |
| Notary and translations | €100 to €500 |
| Legal services / “turnkey” package | €800 to €1,500 for foreigners |
| Domiciliation (legal address / virtual office) | €100 to €500 / year |
| Bank account opening (possible AML fees) | €0 to €700 depending on bank and founder’s situation |
| Outsourced accounting (first year) | €500 to €2,000 total (€70 to €300/month) |
Overall, excluding share capital, a budget of €1,000 to €3,000 generally covers the essential costs of setting up a standard SIA remotely, using professionals.
Cost of living for an expatriate founder
The cost of living remains significantly lower than in many Western capitals. Available estimates suggest that a digital nomad or founder can live decently in Riga on about €1,200 per month (excluding rent for a large family apartment).
Example of prices observed: these data concretely illustrate the values seen on the market for the product or service mentioned in the article. They serve as a tangible reference for understanding current cost ranges.
| Item | Average price |
|---|---|
| Studio / 1-bedroom in Riga center | €350 to €400 / month |
| 1-bedroom in suburbs | ~€260 / month |
| 3-bedroom in center | €630 to €790 / month |
| 3-bedroom in suburbs | ~€440 / month |
| Utilities for 85 m² | ~€230 / month |
| Bread | ~€1.00 |
| Liter of milk | ~€1.10 |
| 1 kg local cheese | ~€8.20 |
| Public transport ticket | €1.15 to €1.60 |
| Gasoline (liter) | ~€1.84 |
For an entrepreneur billing in higher-paying markets (France, Germany, Scandinavia, North America), this cost differential can translate into more comfortable margins or the ability to invest more in business development (hiring, marketing, R&D…).
Life as an expat entrepreneur in Latvia: integrating into the ecosystem daily
Beyond the numbers, we also need to talk about culture, work, and daily life. Latvia has a rather unique blend: a business culture that is formal and structured, but a relatively calm lifestyle close to nature.
Business culture and professional relationships
Business culture is often described as quite hierarchical and more formal than in some Western European startup scenes. Punctuality is highly valued, as is a direct but measured communication style.
Latvians may seem reserved at first meetings, but trust builds over time. Their good command of English, especially in Riga, greatly facilitates integration into the professional environment.
Workspaces and coworking
Riga boasts an impressive range of flexible office spaces for a country of this size, which greatly facilitates the setup for founders:
An overview of the main coworking spaces in Riga, with their prices and features for startups, freelancers, and small teams.
Exclusively for the startup ecosystem. Options: resident desk (~€200/month, €100 for early-stage projects) and flex-desk (€150, €50 subsidized rate).
Two-story coworking space, about €149/month. Very community-oriented, with an ‘underground’ area.
Located in the Teika district, from €170/month. Popular with freelancers and small teams.
Magnēts, Coworking Riga, Workland Telegraph, Regus, etc. Each offers its own prices, atmosphere, and services (meeting rooms, phone booths, showers, lounge areas, sometimes a studio).
For a foreign founder, it’s often in these places that first connections are made: informal meetings, recommendations for service providers, information on grants or calls for projects.
Expat networks and communities
Several networks help you integrate more broadly:
– platforms like InterNations, Expat.com, expat Facebook groups,
– associations like the American Chamber of Commerce in Latvia, the International Women’s Club of Riga, sector-based business clubs,
– events organized by foreign chambers of commerce (American, Nordic, German, etc.).
These networks are valuable not only for practical aspects (housing, schooling, healthcare), but also for business connections, especially with foreigners already established for a long time.
Strategies and pitfalls to avoid for an expat entrepreneur
Setting up in a country where everything seems easy can lead to skipping steps. However, Latvian authorities have in recent years tightened a number of controls to combat shell companies and aggressive optimization schemes.
Key points to watch:
To successfully set up and manage a business in Latvia, several critical points must be anticipated. With the bank, anticipate the KYC/AML phase by preparing a comprehensive file including founders’ CVs, proof of experience, a detailed business model, financial projections, and documentation of the source of funds. Ensure full consistency between the activity declared in the register (NACE code), operational reality, and information provided to the bank and tax authorities. Regarding VAT, avoid premature registration without real activity; it is better to start and register once the first contracts are signed, with evidence of substance. Avoid micro-tax regimes if your ambition quickly exceeds their thresholds, as exiting later can be complex and costly. Since Latvian labor law is protective (especially for pregnant women or union representatives), have your contracts and HR procedures validated by a local legal expert. Finally, plan your personal tax residence strategy with a specialist, especially if you retain significant ties to your home country.
Lastly, do not underestimate the importance of trusted local advice (lawyer, accountant, setup consultant). Latvia makes company formation relatively easy, but applies significant penalties for non-compliance (shell companies, nominee directors, reporting failures).
In summary: which expat profile is Latvia a good fit for?
Latvia is an extremely interesting base for several profiles of expatriate entrepreneurs:
Latvia notably attracts: founders of tech or deeptech startups looking for a growing but human-scale ecosystem; fintech or e-commerce entrepreneurs seeking a European jurisdiction with corporate tax focused on distributed profits; managers of industrial SMEs or B2B services targeting Baltic, Nordic, and Central European markets from a low-cost hub; and creators of activities in niche tourism, wellness, health, or creative services, who benefit from the local cost/quality ratio for offers aimed at Europe.
As long as one accepts immersing oneself in a somewhat more reserved and structured culture, and surrounds oneself from the start with good local advisors, Latvia offers a rare mix: a stable European framework, pro-startup schemes, incentive taxation, reasonable costs, and an ecosystem where a motivated expatriate can still carve out a visible place.
Creating your company in Latvia is not just about changing countries; it’s also about changing scale, by opening up to a continental market from an agile and affordable hub. For an expatriate entrepreneur, the bet is seriously worth considering.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
