In 2026, Latvia has become one of the most attractive EU footholds for international entrepreneurs — especially those from CIS countries, Asia, and the Middle East. With 0% corporate income tax on reinvested profits, full EU single market access, the euro currency, and comparatively low operating costs, it offers a serious alternative to Estonia, Portugal, and Germany. This guide brings together everything a foreign founder needs to know — from registration to day‑to‑day operations.
Why Latvia in 2026: The Key Benefits
Several factors make Latvia particularly compelling for international entrepreneurs.
0% CIT on reinvested profits. As long as profits remain within the company and are used for its development, no corporate income tax is payable. Tax (20% under the standard regime) is triggered only when profits are distributed — paid out as dividends or classed as deemed distributions. In practice, a business can operate, grow, and scale without tax impacting its cash flow.
Full EU single market access. A Latvian SIA grants access to over 500 million consumers across the EU without additional customs duties or trade barriers.
100% foreign ownership. Foreign nationals may be the sole owners of an SIA — no local partner is required, nor is there any mandatory requirement for a resident director. The founder does not need to live in Latvia.
Euro currency and Schengen Area. Latvia has been in the eurozone since 2014 and the Schengen Area since 2007. This means free movement of capital and people across Europe.
Digital‑first government. Company registration is handled online, most tax returns are filed through EDS, and the public administration overall is one of the most modern in the region.
Can a Foreigner Own and Run an SIA?
The short answer: yes, fully. Latvian law imposes no restrictions on the rights of foreign nationals to found and manage an SIA.
An SIA may be founded by any natural or legal person regardless of nationality or country of residence. The founder does not need to be an EU citizen, does not need to reside in Latvia, and no local co‑owner is required. The board member may also be a foreign national — whether an EU citizen or a third‑country national.
There are only two mandatory requirements:
A legal address in Latvia. This can be provided through a virtual office service (from €10–30 per month).
Share capital. A minimum of €1 (micro SIA) or €2,800 (standard SIA).
An important nuance: although the law does not require a resident director, banks and other counterparties may in practice prefer companies with a local presence — for example, an accountant or an office in Latvia.
Step‑by‑Step Registration for Non‑Residents
The registration process for foreign nationals is essentially the same as for residents, with a few additional nuances.
1. Name Selection and Verification
Check name availability in the Commercial Register database. The name may be in the Latin alphabet — in English or another language using Latin characters.
2. Document Preparation
Required documents include:
Application form KR4
Articles of association (standard or customised)
Foundation resolution or agreement
Board member's consent to take office
Address confirmation
Copy of passport (for foreign national identification)
3. Signing Documents — Remotely or by Power of Attorney
If you are not physically in Latvia, you have several options for signing documents:
eParaksts or eID card. If you hold a Latvian‑issued eID or eParaksts, you can sign everything electronically.
Notarised power of attorney. You may authorise someone in Latvia (e.g. a lawyer or accountant) to sign documents on your behalf. The power of attorney must be notarised in your country and legalised (usually with an apostille).
Remote registration through a service provider. Several Latvian legal service providers offer a full remote registration service — you supply the documents, they handle the rest.
4. Opening a Temporary Bank Account
Share capital must be deposited into a temporary bank account. This step can be more challenging for foreign nationals — traditional banks (Swedbank, SEB) may require an in‑person visit or refuse if there is no clear connection with Latvia.
Alternatives: specialised financial institutions (LPB Bank) that work with non‑residents, or fintech solutions.
5. Submitting the Application to the Commercial Register
The application can be filed electronically through the Commercial Register portal. State fee: €20 (micro SIA) or €75 (standard SIA). Expedited registration (1 working day) — €225.
6. SRS (VID) Registration
After Commercial Register registration, the company is automatically registered with the State Revenue Service. Additional registrations may be required: as a VAT payer (if turnover exceeds €50,000) and as an employer (if there are employees).
Bank Account: The Honest Picture for Foreign Owners
This is the area where foreign founders encounter the greatest difficulties. Latvian banks have significantly tightened their KYC (Know Your Customer) requirements in recent years, and opening a business account for a non‑resident company can take 4–8 weeks.
The main challenges:
Traditional banks (Swedbank, SEB) favour customers with a clear connection to Latvia — employees, an office, or at least contracts with local partners.
Fintech solutions (Revolut Business, Wise) are faster, but thoroughly scrutinise the business model and may refuse high‑risk industries.
Banks compare the declared activity code with the actual business model — a mismatch leads to refusal or account freezing.
Solutions:
Start with fintech (Revolut Business) — typically 2–10 days, lower requirements.
Establish a connection with Latvia: sign a contract with an accounting firm, rent a virtual office with mail forwarding.
Prepare a detailed business description and proof of source of funds — the clearer the documentation, the better the chances.
EDS and SRS: How to Manage as a Non‑Resident
EDS (Electronic Declaration System) is mandatory for all taxpayers in Latvia. Foreign nationals have two options for accessing EDS:
1. Standard access with e‑identity. From 1 January 2026, EDS access is only possible using secure identification tools — Smart‑ID (qualified version), eID card, or eParaksts. Username and password are no longer valid for most users.
2. Exception for foreign nationals. Foreign nationals who do not have a legal connection with Latvia and are unable to obtain a foreigner's eID card may still use the username and password issued by the SRS even after 1 January 2026.
In practice: the majority of foreign SIA owners use an accountant as an intermediary. The accountant is granted EDS authorisation and files all declarations. The owner may not need to use EDS personally on a day‑to‑day basis, but it is worth retaining access for receiving reports.
Tax Residency: Where Do You Pay Tax?
This is one of the most frequently asked questions: if I live abroad but my SIA is in Latvia, where do I pay tax? The answer depends on several factors.
Individual Tax Residency
Latvia determines an individual's tax residency using several criteria:
The 183‑day rule. If you spend 183 days or more in Latvia in any 12‑month period, you are a Latvian tax resident — regardless of your nationality or other circumstances.
Habitual residence. Even if you spend fewer than 183 days in Latvia, you may be considered a tax resident if Latvia is your habitual place of residence — your family lives here, you maintain a permanent home, your primary social and economic ties are located here.
The employment trap for Latvian citizens. Latvian citizens working remotely for a Latvian‑registered employer are considered tax residents regardless of their physical presence. This is a deliberately designed rule to prevent Latvian nationals from exploiting remote work to escape taxation.
Important: Latvia does not impose citizenship‑based taxation (unlike, for example, the United States). A Latvian citizen living abroad and not employed by a Latvian company is generally not a Latvian tax resident.
Corporate Tax Residency
A company is considered resident in Latvia if it is or should have been incorporated in Latvia. Latvian‑resident companies are taxed on profits distributed from their worldwide income. Permanent establishments of non‑residents are taxed only on profits distributed from Latvian‑source income.
Dividends and PIT for Foreigners
Under the standard CIT regime (20/80 formula), dividends are taxed only at the company level — the individual (including non‑residents) pays no additional PIT. There is also no dividend withholding tax — 0% regardless of the recipient's country of residence.
Under the new alternative regime (15% + 6%): non‑resident shareholders will generally pay only the difference between the PIT rates in Latvia and their country of residence.
The Startup Visa: What It Offers and Who Qualifies
The Latvian startup visa is effectively a temporary residence permit that allows third‑country nationals (outside the EU/EEA) to live and work in Latvia while developing an innovative business. The permit is granted for a period of up to 3 years.
Key Requirements
An innovative, technology‑based, and scalable business model. For example: SaaS products, fintech solutions, artificial intelligence, data analytics, cybersecurity, deep tech, biotech, clean‑tech, green economy initiatives.
The company must already be actively operating. Idea‑stage projects are no longer accepted in 2026 — you must be able to demonstrate verifiable market demand, with bank transactions and payments from real customers.
Proof of financial sufficiency. Your bank account must show a minimum of €8,800 per adult and €2,664 per child to cover living expenses.
A clean criminal record and a valid passport (issued within the last 10 years, valid for at least 3 months beyond the planned return).
Advantages
The minimum investment into the company can officially be €0 — the state does not require a specific capital injection.
Up to 5 co‑founders may apply together under a single project.
Free movement within the Schengen Area.
Possibility of applying for a permanent residence permit after 5 years.
Application Process
Prepare a detailed business plan.
Submit your application through a startup support organisation (e.g. LIAA — the Investment and Development Agency of Latvia).
Pass the innovation evaluation — an expert committee assesses the innovativeness and scalability of the business model.
After a positive evaluation, submit the residence permit application to the OCMA (Office of Citizenship and Migration Affairs).
Working with a Latvian Accounting Firm Remotely
The majority of foreign SIA owners never physically visit Latvia — all communication with the accountant takes place remotely. Modern Latvian accounting firms are well adapted to this.
How It Works
Document exchange. Invoices and receipts are sent electronically — by email, via shared folders (Dropbox, Google Drive), or through specialised accounting platforms.
Communication. Consultations take place remotely — by email, phone, or video call. Many firms offer support in English and Russian — this is particularly important for foreign clients.
Bank account management. The accountant is granted view‑only access to your internet banking so they can track transactions and reconcile payments.
EDS access. The accountant receives EDS authorisation and files all tax returns on your company's behalf.
What to Look for in an Accounting Firm
When choosing an accountant for remote work, pay attention to the following:
Does the firm have experience working with non‑resident companies?
In what languages are consultations provided? (English and Russian are the bare minimum.)
Is it possible to receive management reports — not just the mandatory SRS returns, but also understandable statements on the company's financial position?
How does document exchange work, and how quickly are responses provided?
Frequently Asked Questions — Especially for CIS‑Region Founders
Do I need a visa to register an SIA in Latvia?
No, a visa is not required for SIA registration. You can register an SIA remotely, using a power of attorney or electronic signing tools. A visa is only required if you wish to be physically present in Latvia.
Can Russian/Belarusian citizens set up an SIA in Latvia?
Yes, but you should expect heightened bank scrutiny and longer processing times due to the sanctions regime. It is important to ensure that the company's activities and the source of its funds are fully transparent and comply with EU sanctions requirements.
How long does it take to obtain a residence permit?
Startup visa route: business plan preparation and innovation evaluation (4–8 weeks), residence permit processing by the OCMA (up to 30 days in the expedited process or up to 90 days under the general procedure). Management board member route: you must wait at least one year after the company starts operating in order to demonstrate genuine commercial activity.
Can I use tax relief from my home country?
This depends on the double taxation treaty between Latvia and your country of residence. Most EU countries and many non‑EU countries have a tax treaty with Latvia for the avoidance of double taxation. Consult a tax specialist in your country.
Latvia in 2026 offers a rare combination: EU market access, an advantageous tax regime, and a relatively straightforward registration procedure. For foreign entrepreneurs, it is one of the most accessible and strategically beneficial jurisdictions in Europe — provided the documentation is in order and the bank account issue is handled proactively. Our team supports foreign founders at every stage — from company registration to day‑to‑day remote accounting.
Last updated: April 2026. Information is based on official materials from the Commercial Register, the State Revenue Service, the Office of Citizenship and Migration Affairs, and the experience of international founders.
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