Setting Up a Company in Latvia 2026 — A Complete Step-by-Step Guide

Setting Up a Company in Latvia 2026 — A Complete Step-by-Step Guide

Thousands of new companies are registered in Latvia every year. The majority choose an SIA (sabiedrība ar ierobežotu atbildību) — a limited liability company — as the most suitable legal form for small and medium-sized businesses. But what does this process actually look like in practice? How much does registration cost, how long does it take, and what do new entrepreneurs most often overlook? This guide walks through everything step by step.

Registering a company in Latvia means incorporating with the Enterprise Register, paying in share capital, activating your EDS account, and setting up bookkeeping. Minimum costs are around €36, and the process typically takes anywhere from a few days to several weeks.

What you need to register an LLC in Latvia:

• A qualified electronic signature (Latvian residents: eParaksts or eID card; non-residents: any EU-compliant eIDAS signature, or notarised documents sent by post)

• A registered legal address in Latvia

• A temporary bank account for the share capital deposit

• Articles of association

• Share capital (from €1)

• 2–4 weeks in a realistic scenario

TL;DR — Key Takeaways

• Minimum costs: €20 (state fee) + ~€15 (temporary bank account) + €1 (micro-capital share capital) = approximately €36 in total

• Timeline: 2–4 weeks in a realistic scenario (the main bottleneck is opening the temporary bank account)

• Registration is handled electronically or by post — the Enterprise Register no longer accepts in-person submissions

• After Enterprise Register registration, the company is automatically added to the SRS tax register, but EDS access and VAT registration must be activated separately

• Micro-capital LLC (from €1): until equity reaches €2,800, at least 25% of net profit must be allocated to the mandatory reserve; the remaining 75% may be paid out as dividends

Why an LLC and Not a Sole Trader or Self-Employed Status?

Before registering, it is worth understanding why an LLC is the right choice and whether it suits your particular situation. Three key advantages:

Limited liability. The company's obligations are generally borne by the LLC itself, not the owner's personal assets — provided there are no personal guarantees, unlawful conduct, or board member liability situations. A sole trader, by contrast, is personally liable for all business debts without limit — a significant risk if things go wrong.

Tax efficiency. Corporate income tax (CIT) applies only to distributed profit — tax is paid only when profit is paid out as dividends (20% CIT). Undistributed, reinvested profit is not taxed at all. For sole traders and the self-employed, income is generally taxed in the period it is earned, regardless of whether the funds are reinvested in the business.

Source: Corporate Income Tax Law, Section 3

Credibility with partners. Foreign partners and larger clients often prefer working with a limited liability company. Larger public procurement tenders frequently require an LLC or joint-stock company — the self-employed are often not eligible.

If your income is modest or you work alone as a specialist, sole trader or self-employed status may be simpler to manage. For a broader comparison, see: LLC vs Sole Trader vs Self-Employed.

Registration Steps: A Complete Guide

Step 1 — Choosing and Checking the Company Name

Before anything else, check whether your desired name is already taken. This can be done free of charge, without registration, via the Enterprise Register search portal.

The name must be sufficiently distinct from already-registered companies. It must not be misleading, contain the names of state institutions without authorisation, or cause confusion with another company's trademarks.

Practical tip: prepare 2–3 alternative names in case your first choice is already registered. Time spent on this step: half an hour or less. Time lost if you skip it before preparing other documents: several days.

Step 2 — Drafting the Articles of Association

The articles of association are the LLC's foundational legal document — the company's "constitution". They can be prepared independently using the Enterprise Register's standard template (available free of charge on the UR website), or tailored with the help of a legal professional if the business model is more complex.

Minimum articles of association must include:

• The company name and registered address

• The amount of share capital and its distribution among shareholders

• The board structure and representation rights

• The procedure for convening shareholder meetings and adopting resolutions

• The principles for profit distribution

For a single-person LLC with a standard business activity, the UR standard template is perfectly adequate and costs €0. For more complex structures — multiple shareholders, different voting rights, share pre-emption rights — legal advice is recommended.

Step 3 — Opening a Temporary Bank Account

A temporary account must be opened at a Latvian bank — Swedbank, SEB, Citadele, Luminor, or others — before submitting documents to the Enterprise Register. The bank confirmation of the share capital deposit is submitted together with the registration documents.

Important: fintech platforms such as Revolut or Wise do not generally provide a classic temporary account for share capital deposits. They are excellent for day-to-day business banking after registration, but at this stage a traditional bank is required.

Opening a temporary account costs from around €10, depending on the bank. This is also the main cause of delays in practice — banks require KYC documents (business plan, proof of source of funds, description of planned activities), and processing can take anywhere from a few days to two weeks. The process tends to take longer for foreign nationals.

Step 4 — Depositing the Share Capital

Before registration, the share capital must be deposited into the temporary bank account. Once the Enterprise Register confirms registration, the funds become available to the company — however, the temporary account is not automatically converted into a current account. After registration, you may choose any bank for your current account.

Source: Commercial Law, Section 146

Micro-capital LLC (share capital €1–€2,799) — the law permits registration of an LLC with as little as €1, but this form comes with its own conditions: until equity (share capital + accumulated reserves) reaches €2,800, the company may only pay dividends in part. Each year, at least 25% of net profit must be allocated to the mandatory reserve to build up equity — the remaining 75% may be paid out as dividends.

Source: Commercial Law, Section 185.¹

Standard LLC (share capital from €2,800) — dividends may be paid from the first profit without any reserve restrictions. Share capital is not an expense — it remains in the company's account and is company property that can be used to cover costs necessary for running the business.

Step 5 — Registration with the Enterprise Register

The Enterprise Register accepts incorporation documents primarily electronically via the UR portal using an eParaksts or eID card. Documents may also be sent by post as an exception, but in that case all signatures on the incorporation documents must be notarially certified.

Documents required:

• Registration application (UR standard form)

• Articles of association (signed electronically)

• Shareholders' resolution to incorporate the LLC, or an incorporation agreement (if there are 2 or more shareholders)

• Bank confirmation of share capital deposit in the temporary account

• For foreign nationals additionally: the form "Information for Inclusion and Update in the Natural Persons Register" — submitted together with the incorporation documents

Standard processing time: 3 business days — state fee €20 regardless of the number of founders. Expedited registration in 1 business day costs €60 (this is the total fee for the expedited option, not €20 + €60).

Step 6 — SRS and EDS

After Enterprise Register registration, the company is automatically added to the SRS tax register — the data is transmitted by the Enterprise Register automatically. However, there are three things that must be done separately:

EDS access activation — the board member logs into the Electronic Declaration System (EDS) using their eParaksts or online banking and links the company to their authorisation. Without EDS access, you will not be able to submit any declarations.

VAT registration — if annual turnover from VAT-taxable transactions exceeds €50,000, VAT registration is mandatory. Voluntary registration is also possible at any time below the threshold — this is advantageous if your clients are VAT payers and wish to deduct input VAT. Read more: VAT Registration in Latvia.

Employee registration in EDS — at least one business day before work begins. If you are hiring yourself as a board member with remuneration, this applies to you as well.

Step 7 — Setting Up Bookkeeping

Every LLC is required by law to maintain accounting records from the first day of operations. Three options:

Independently, using accounting software. Small businesses in Latvia often choose Moneo — an intuitive interface, compliant with Latvian tax requirements, available in the cloud. For medium-sized businesses, Jumis (cloud platform) or Horizon Cloud are worth considering. For larger companies — Microsoft Dynamics or Visma.

Hiring an in-house accountant — a logical step if turnover is high and the volume of transactions is large.

Outsourcing bookkeeping — often the most cost-effective option for small businesses. As transaction volumes grow, outsourcing frequently becomes more economical than maintaining an in-house accountant. View our services and pricing.

VAT — When to Register and What to Keep in Mind

VAT is a topic that new entrepreneurs often think about too late. Latvian law sets out two scenarios:

Mandatory registration — if annual turnover from VAT-taxable transactions exceeds €50,000, the company must register as a VAT payer within 30 days. Failure to meet this deadline may result in penalties.

Voluntary registration — this can be done at any time before reaching the threshold. It is advantageous if your clients are VAT payers, as they can deduct the VAT shown on your invoices as input tax. It also allows you to deduct VAT on business expenses — for IT equipment, office costs, or vehicle purchases.

Source: Value Added Tax Law, Section 51

On the other hand, if you work exclusively with private individuals and turnover stays below the threshold, VAT registration creates additional administrative burden without any particular tax advantage. Read more: VAT Registration in Latvia.

Do It Yourself or With Professional Help?

Most registration steps can be handled independently, but there are situations where professional assistance pays off.

If you are doing this for the first time or operating from abroad, a comprehensive consultation and registration assistance typically costs €150–€300 and saves considerable time and effort. Contact us to find out what makes most sense in your situation.

How Much Does It Cost to Register an LLC in Latvia in 2026?

Note: Share capital is not an expense — it stays in the company and is available for business operations. The minimum total upfront cost for registering a micro-capital LLC is approximately €36 (state fee €20 + temporary account ~€15 + share capital €1).

Compared to most European countries, Latvia is one of the most accessible countries in Europe for starting a business — the minimum investment is considerably lower than, for example, Germany or the Netherlands.

How Long Does It Take to Register an LLC?

The main cause of delays in practice is opening the temporary bank account. KYC procedures can be lengthy, particularly if the business involves international transactions or the founder is a foreign national.

Opening a Bank Account — A Warning

Latvian banks have become significantly stricter in recent years when it comes to opening accounts for new companies. The process can be slowed by:

• A foreign founder or ultimate beneficial owner

• High-risk industry (cryptocurrency, gambling, trade with third countries)

• Minimal share capital without a clear business plan

• Unclear source of funds

Alternatives if the traditional bank process is slow: Revolut Business and Wise Business offer faster account opening and strong features for international payments. They are not suitable for the temporary share capital deposit account, but after Enterprise Register registration they are a practical alternative for day-to-day banking.

A Practical Example

Let us say that Marta is setting up a micro-capital LLC to provide IT consulting services. She is the sole shareholder and board member, and plans to employ herself on a gross salary of €1,500 per month.

One-off registration costs:

Monthly payroll costs (employer perspective):

Note: This calculation is simplified — the non-taxable minimum (€550/month in 2026) has not been applied. With the non-taxable minimum, the net salary would be higher. Rates are stated based on information available at the time of publication and may change. For an accurate calculation, use our salary calculator.

Source: Law On State Social Insurance, Section 18; Law On Personal Income Tax, Section 15

As a micro-capital LLC founder, Marta should keep in mind: once the company is profitable, she may pay out up to 75% of net profit as dividends (allocating the remaining 25% to the mandatory reserve). However, in the early stages, while the business is still getting off the ground and there is no profit yet, a regular salary is the most reliable way to receive income for work done in the company. Read more: Dividends or Salary in an LLC.

After Registration — First Steps

Enterprise Register registration is the beginning, not the end. In the first few weeks, several practical matters need to be sorted out.

Current account. The temporary account is not a current account — after registration, a separate business current account must be opened. You may choose the same bank or a different one. It is worth comparing monthly service fees, transfer costs, and online banking functionality.

EDS and VAT. Activate EDS access and, if necessary, register as a VAT payer. See Step 6.

Bookkeeping set-up. Accounting records must be kept from the first transaction. See Step 7.

Employment contracts. If you plan to hire employees — including yourself as a board member with remuneration — draw up an employment or management contract in accordance with the Labour Law and register the employee in EDS before work begins.

Common Mistakes Made by New Entrepreneurs

In our practice, we see new entrepreneurs make the following mistakes — and all of them are easily avoidable if you know what to expect.

Mistake 1: Starting operations before registration.

Transactions conducted in the company's name before Enterprise Register registration are legally problematic. Wait until the company is officially registered, then issue your first invoice or sign your first contract in the company's name.

Mistake 2: Not activating EDS.

After Enterprise Register registration, the company appears in the SRS database, but EDS authorisation is not automatic. Without EDS access, you will not be able to submit declarations, register employees, or communicate with the SRS electronically — and reporting deadlines begin immediately.

Mistake 3: Confusing the temporary account with a current account.

The temporary account is solely for the share capital deposit and registration confirmation. After registration, a separate current account is needed — day-to-day payments generally cannot be made from the temporary account.

Mistake 4: Mixing personal and business funds.

From day one — separate bank accounts, separate records. It may seem trivial at the start, but an accountant sorting this out a year later will cost far more than keeping things tidy from the beginning.

Mistake 5: Not setting up bookkeeping promptly.

Many entrepreneurs assume bookkeeping can be "sorted out later." In practice, this means additional costs for reconstruction work and stress ahead of the first tax deadline. An accountant is not a luxury — it is an investment that often pays for itself within the first year.

Next Steps — Checklist

Within the first 3 business days:

• Choose and verify the company name in the UR portal

• Prepare the articles of association (UR standard template or with legal assistance)

• Submit a bank application to open a temporary account — the sooner the better

Within the first 2 weeks:

• Deposit the share capital in the temporary account and obtain the bank confirmation

• Submit the registration application to the Enterprise Register electronically

• Activate EDS access immediately after receiving Enterprise Register confirmation

Within the first month:

• Open a business current account (the temporary account is not a current account)

• Register employees in SRS EDS at least one business day before work begins

• Choose a bookkeeping solution and sign a contract

• Notify the SRS of the primary business activity (NACE code) — in EDS under "Taxpayer Data → Types of Economic Activity"; free of charge, within 1 month of registration

• Check whether VAT registration is required (if turnover is approaching €50,000/year)

• File initial documents promptly — do not let paperwork pile up

Realistic timeline:

• Enterprise Register registration: 1–3 business days

• Bank account opening: 1–4 weeks (sometimes longer for foreign nationals)

• Company ready for full operations: realistically 3–6 weeks

Frequently Asked Questions

Can a foreign national register an LLC?

Yes. An LLC in Latvia can be registered by both residents and non-residents from any country. A valid identity document is required. Foreign nationals must additionally submit the form "Information for Inclusion and Update in the Natural Persons Register" — this is submitted together with the incorporation documents to the Enterprise Register. Activating EDS access without a Latvian eParaksts or online banking account is more complex — consulting a specialist is recommended.

Can one person register an LLC?

Yes. A single individual can be both the sole shareholder and the board member. This is a fully permissible and very common business structure among small companies in Latvia.

Does the LLC owner have to pay themselves a salary?

No — a board member may operate without remuneration (under a board mandate rather than an employment contract). However, if any remuneration is received for work done in the company, it must be taxed as salary or board member remuneration. Dividends cannot be used as a full substitute for regular employment income — they may only be paid from company profit and only when the capital conditions are met.

Is a micro-capital LLC a safe legal choice?

In terms of legal liability — yes, to the same degree as a standard LLC. The main limitation is financial: until equity (share capital + accumulated reserves) reaches €2,800, at least 25% of net profit must be allocated to the mandatory reserve, while the remaining 75% may be paid out as dividends. In practice, during the early stages when the company has no profit yet, income can be received as salary or board member remuneration.

Does the LLC name have to be in Latvian?

No. The name may be in Latvian, English, or another language, but it must be written in Latin characters and must include the abbreviation "SIA". English names in the SIA format are common in the technology and services sectors.

How long is an LLC registration valid?

LLC registration is valid indefinitely. Removal from the register only takes place upon application by the shareholders or by court order in liquidation proceedings.

Is a lawyer or notary required for registration?

For a standard LLC registration — no. Notarial services are not mandatory for standard articles of association. If there is a complex shareholder structure, share sale agreements, or a contribution in kind, legal advice is recommended.

What happens if the company remains inactive for a long time?

The Enterprise Register may initiate removal of the company from the register if it fails to submit mandatory annual reports for an extended period (typically more than 2 years). Fines for late annual reports can be substantial.

Conclusion

Registering an LLC in Latvia in 2026 is a simpler and less costly process than in most European countries — the minimum investment is around €36, and everything can be done electronically within a few weeks. The key steps — name selection, articles of association, temporary account, Enterprise Register registration, EDS, and tax matters — are well-structured, provided you prepare for them.

The most common mistakes: delaying the temporary bank account application, forgetting to activate EDS, and putting off setting up bookkeeping. All three are easily avoidable.

At Balansis, we help prepare incorporation documents, register LLCs, and set up bookkeeping from the company's very first day of operations — whether you are registering in Latvia for the first time or doing so from abroad.

If you would like to understand which legal form best suits your situation, or simply save time during the registration process, get in touch with us. You may also wish to browse our accounting services for new businesses.

Legal Sources and References

• Commercial Law

• Corporate Income Tax Law

• Law On State Social Insurance

• Law On Personal Income Tax

• Value Added Tax Law

• Enterprise Register of Latvia

• SRS Electronic Declaration System

This article was prepared in May 2026, based on the Commercial Law, Corporate Income Tax Law, and other tax legislation in force from 1 January 2026. Tax legislation is subject to change — before making any decisions, we recommend checking the current version of the relevant law and consulting a certified accountant or tax adviser.