Latvia (LV)
Latvia is a parliamentary republic and EU member state on the eastern shore of the Baltic Sea, bordered by Estonia, Lithuania, Russia, and Belarus.
Capital: Riga
Region: Europe
Language: Latvian
Currency: EUR (€)
Cost of living: Affordable (index 48)
Emergency: 112
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Business Setup
Start a business or go freelance in Latvia.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 Register your business at the Enterprise Register (ur.gov.lv) — choose SIA (€1 minimum capital) or IK (Individual Merchant, simpler)
- 2 Register with VID (State Revenue Service) as a taxpayer — online via eds.vid.gov.lv
- 3 Apply for VAT registration if annual turnover is expected to exceed €40,000 (or register voluntarily)
- 4 Open a business bank account (Swedbank, SEB, or Citadele — all offer business accounts)
- 5 Consider micro-enterprise taxpayer status (MUN) if turnover under €40,000 — simplifies tax to 25% of turnover
- 6 Register with VSAA for social insurance (mandatory for self-employed)
- 7 Set up accounting software (e.g., iFinanses, Jumis, or Fintegro) or hire a bookkeeper (grāmatvedis)
- 8 Issue invoices with VAT if registered, including all required legal details
Tax registration
Register with VID as a taxpayer (nodokļu maksātājs) at eds.vid.gov.lv or at any VID customer service centre. You will receive a VID registration number. Employer declaration and withholding obligations begin immediately upon hiring any employees.
VAT threshold
€40,000 annual turnover — mandatory VAT (PVN) registration above this threshold. Voluntary registration possible at any time. Standard VAT rate 21%. File monthly or quarterly PVN declarations via VID EDS.
Invoicing
Latvian invoices must include: seller's name and registration number, buyer's name and registration number, invoice number, date, description of goods/services, quantity, unit price, subtotal, VAT amount (if applicable), and total. If VAT registered, include VAT registration number. Invoices must be kept for 10 years.
Social security
Self-employed persons (pašnodarbinātās personas) must register with VSAA and pay mandatory social insurance contributions (VSAOI). In 2026: 31.07% of income (covering both employee and employer portions) or a minimum fixed amount. Self-employed contributions can be based on actual income or an elected amount, but minimum applies. These fund pension, sickness, and other insurance entitlements. Contributions payable quarterly.
💡 The Micro-Enterprise Tax (MUN — mikrouzņēmumu nodoklis) at 25% of turnover is simple but has significant drawbacks: very limited pension accumulation, no sick pay beyond the minimum, and no access to proper unemployment benefits. For anyone expecting significant long-term social security entitlements, the standard SIA tax regime is generally better despite more complexity. Latvia's accounting requirements are significant even for small companies — most freelancers hire a part-time bookkeeper (€50–150/month) which is cost-effective and avoids compliance risks.
🏢 Business Structures
SIA · Sabiedrība ar ierobežotu atbildību
Limited Liability Company (LLC / Ltd)
€1 minimum (most common: €2,800)
Min. capital
1–3 business days online via ur.gov.lv
Setup time
Liability: Limited to share capital — shareholders not personally liable for company debts
Setup cost: €35 state fee (online) + notary/legal costs €200–500 if using agent
Best for: The most common business structure in Latvia for SMEs, freelancers, startups, and foreign-owned businesses. Ideal for protecting personal assets. Can be registered with €1 minimum capital but €2,800 is recommended for credibility.
AS · Akciju sabiedrība
Joint-Stock Company (Public Limited Company)
€35,000
Min. capital
2–4 weeks (notarial deed and registration required)
Setup time
Liability: Limited to share capital
Setup cost: €350+ state fee + notary costs €1,000–3,000
Best for: Larger companies seeking to raise capital via share issuance, IPOs, or for regulated financial services. Not typical for small businesses or expat entrepreneurs.
IK · Individuālais komersants
Sole Trader / Individual Merchant
None
Min. capital
1–2 business days
Setup time
Liability: Unlimited — owner personally liable for all business debts
Setup cost: €20 state registration fee
Best for: Simple one-person businesses with low risk and low capital needs. Straightforward to set up and administer. Not suitable if significant personal liability risk exists.
PN / PS · Pilnsabiedrība / Komandītsabiedrība
General Partnership / Limited Partnership
None required
Min. capital
2–3 business days
Setup time
Liability: General partners: unlimited. Limited partners (PS): limited to their contribution
Setup cost: €20–35 state fee
Best for: Joint ventures, professional firms (law, architecture, consulting), and agricultural operations where multiple partners share management and profits.
MUN (Mikrouzņēmums) · Mikrouzņēmumu nodokļa maksātājs
Micro-Enterprise Taxpayer (simplified regime)
None (uses existing SIA or IK structure)
Min. capital
1 day (register with VID)
Setup time
Liability: Depends on underlying structure
Setup cost: No extra cost — register the tax status with VID
Best for: Very small businesses with annual turnover under €40,000 seeking simplified tax administration. Tax is 25% of turnover covering all taxes. Warning: lower social insurance entitlements and pension accrual under this regime.
Filiāle / Pārstāvniecība · Ārvalstu uzņēmuma filiāle / pārstāvniecība
Branch / Representative Office of Foreign Company
None
Min. capital
3–5 business days
Setup time
Liability: Parent company is fully liable
Setup cost: €200–500 registration
Best for: Foreign companies wishing to establish a presence in Latvia without creating a separate legal entity. Branch can conduct commercial activities; representative offices cannot. Commonly used by Nordic, German, and other EU companies.
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