How Foreigners Can Start a Business in Latvia — Complete 2026 Guide
In 2026, Latvia has become one of the most attractive EU landing spots for international entrepreneurs — especially from CIS countries, Asia, and the Middle East. 0% corporate income tax on reinvested profit, full access to the EU single market, the euro currency, and comparatively low running costs make it a serious alternative to Estonia, Portugal, and Germany. In this guide, we've gathered everything a foreign founder needs to know — from registration to day-to-day operational questions.
Key takeaways
A foreigner can be the sole SIA owner and board member — no local partner or resident director is required, and the founder doesn't need to live in Latvia
Registration state fee: €20 (small-capital SIA) or €75 (standard SIA, share capital from €2,800); accelerated processing (1 business day) costs 3× the state fee for SIAs with several founders — €60 or €225 respectively (a single-founder SIA pays the same base fee)
Since 1 January 2026, EDS access requires secure identification tools, but foreigners with no legal connection to Latvia and no way to obtain a foreigner's eID card can still, as an exception, access EDS with a VID-issued username and password
Any EU eIDAS-qualified electronic signature works for signing documents — not only a Latvian-issued eParaksts or eID
Under the standard corporate tax regime, dividends to non-residents carry no withholding tax (0%), and profit isn't taxed at all as long as it stays in the company
Why Latvia in 2026: the key advantages
Several factors make Latvia especially attractive to international entrepreneurs.
0% corporate tax on reinvested profit. As long as profit stays in the company and is used for its development, no corporate income tax is due. The tax (20% under the standard regime) applies only when profit is distributed — when paying dividends or making deemed profit distributions. In practice, a company can operate, grow, and expand without tax affecting its cash flow.
Full access to the EU single market. A Latvian SIA gives access to more than 500 million consumers across the EU, with no extra customs duties or trade barriers.
100% foreign ownership. Foreigners can be the sole owners of an SIA — no local partner is required, and there's no mandatory requirement for a resident director. The founder doesn't need to live in Latvia.
Euro currency and the Schengen area. Latvia has been in the eurozone since 2014 and the Schengen area since 2007. That means free movement of capital and free movement across Europe.
Digital governance. Company registration happens online, most tax returns are filed through EDS, and public administration overall is among the most modern in the region.
Can a foreigner found and run an SIA?
The short answer: yes, fully. Latvian law doesn't restrict foreigners' rights to found and run an SIA.
Any natural or legal person can found an SIA, regardless of citizenship or country of residence. The founder doesn't need to be an EU citizen, doesn't need to live in Latvia, and doesn't need a local co-owner. A board member can also be a foreigner — a citizen of either an EU or a non-EU country.
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 (small-capital SIA) or €2,800 (standard SIA).
An important nuance: although the law doesn't require a resident director, banks and other business partners may in practice favor companies with a local presence — for example, an accountant or an office in Latvia.
Registration step by step for foreigners
The registration process for foreigners is essentially the same as for residents, but with a few additional nuances.
1. Choosing and checking the name
Check name availability in the Enterprise Register's database. The name may be in the Latin alphabet — in English or another language that uses Latin letters.
2. Preparing the documents
Required documents include:
Application form KR4
Articles of association (standard or customized)
Founding resolution or agreement
Board member's consent to the position
Proof of address
Passport copy (for identifying the foreigner)
3. Signing documents — remotely or by power of attorney
If you're not in Latvia, there are several options for signing documents:
eParaksts, an eID card, or any other EU eIDAS-qualified electronic signature. It doesn't have to be a specifically Latvian-issued eParaksts or eID — under the EU eIDAS Regulation, a qualified electronic signature issued in any EU member state must be recognized as legally equivalent in all other member states, including Latvia.
A notarized power of attorney. You can authorize someone in Latvia (for example, a lawyer or accountant) to sign documents on your behalf. The power of attorney must be notarized in your country and legalized (usually with an apostille).
Remote registration through a service provider. Several Latvian providers offer full remote registration — you submit the documents, and they handle the rest. We run one ourselves for foreign founders, Start in Latvia, which forms the SIA with a qualified e-signature, without a notary visit.
4. Opening a temporary bank account
The share capital must be deposited into a temporary bank account. This step can be more complicated for foreigners — traditional banks (Swedbank, SEB) may require an in-person visit or decline the application if there's no clear connection to Latvia. The timeline is highly individual and depends on the bank, the client's profile, and how complete the documentation is — plan for several weeks, not days.
Alternatives: specialized financial institutions (LPB Bank) that work with non-residents, or fintech solutions.
5. Submitting the application to the Enterprise Register
The application can be submitted electronically through the UR portal. State fee: €20 (small-capital SIA) or €75 (standard SIA, share capital from €2,800). Accelerated processing (1 business day) costs three times the state fee for SIAs with several founders — €60 or €225 respectively; a single-founder SIA pays the same base fee.
6. VID registration
After registering with UR, the company is automatically registered with VID. You also need to register separately as a VAT payer (if turnover exceeds €50,000) and as an employer (if you have employees).
The bank account: an honest look for foreign owners
This is the area where foreign founders run into the greatest difficulty. Latvian banks have significantly tightened their KYC (know-your-customer) requirements in recent years, and opening an account for a non-resident-owned company can take several weeks — the exact timeline varies considerably depending on the bank, the client's profile, and the quality of the documentation, so it's better to plan with a buffer than to rely on a specific number of weeks.
The main challenges:
Traditional banks (Swedbank, SEB) favor clients with a clear connection to Latvia — employees, an office, or at least contracts with local partners.
Fintech solutions (Revolut Business, Wise) are usually faster, but they scrutinize the business model carefully and may decline high-risk industries.
Banks compare the declared type of activity against the actual business model — a mismatch leads to a decline or account freeze.
Solutions:
Start with a fintech provider (Revolut Business) — usually faster, with lower requirements than traditional banks.
Establish a connection to Latvia: sign a contract with an accounting firm, rent a virtual office with mail forwarding.
Prepare a detailed business description and proof of the source of funds — the clearer the documentation, the better your chances.
EDS and VID: how to manage things as a non-resident
EDS (the Electronic Declaration System) is mandatory for all taxpayers in Latvia. Foreigners have two ways to access EDS:
1. Standard access with an e-identity. Since 1 January 2026, EDS access is only possible with secure identification tools — Smart-ID (the qualified version), an eID card, or eParaksts. A username and password are no longer valid for most users.
2. An exception for foreigners. Foreigners who have no legal connection to Latvia and no way to obtain a foreigner's eID card may still use a VID-issued username and password even after 1 January 2026. This exception is confirmed in VID's official announcements and remains in effect — contrary to some inaccurate claims circulating that this option has been closed to everyone.
In practice: most foreign SIA owners work through an accountant. The accountant is granted EDS authorization and files all returns. The owner personally may not need EDS day to day, but it's worth keeping access for viewing reports.
Source: VID — From 2026, EDS login is only possible with secure electronic identification tools
Tax residency: where do you pay taxes?
This is one of the most common questions: if I live abroad but my SIA is in Latvia, where do I pay taxes? The answer depends on several factors.
Individual tax residency
Latvia determines an individual's tax residency based on several criteria:
The 183-day rule. If you stay in Latvia 183 days or more in any 12-month period, you're a Latvian tax resident — regardless of your citizenship or other circumstances.
Declared place of residence. If your declared place of residence is in Latvia, you are a Latvian tax resident (Article 14(2) of the law "On Taxes and Fees").
A Latvian citizen employed abroad by the Latvian government. For example, a diplomat or another person posted abroad in state service.
Important: Latvia doesn't tax based on citizenship alone (unlike, for example, the US). A Latvian citizen who lives abroad, has no declared residence in Latvia and does not spend 183 days here is generally not a Latvian tax resident — even if they work remotely for a Latvian company. Where two countries are involved, a bilateral tax treaty may also decide residence.
Corporate tax residency
A company is considered a Latvian resident if it is, or should be, registered in Latvia. Latvian resident companies are taxed on distributed profit from worldwide income. Non-residents' permanent establishments are taxed only on profit earned in Latvia.
Dividends and personal income tax for foreigners
Under the standard corporate tax regime (the 20/80 formula), dividends are taxed only at the company level — an individual (including a non-resident) pays no additional personal income tax. There's also no dividend withholding tax — 0%, regardless of the recipient's country of residence.
Under the alternative regime (15% + 6%), the 6% personal income tax on dividends is payable in Latvia; whether and how it can be credited in your country of residence depends on that country's law and the bilateral tax treaty — check this with a tax specialist.
The startup visa: what it offers and who can apply
Latvia's startup visa is legally 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 up to 3 years.
Key requirements
An innovative, technology-based, scalable business model. For example, SaaS products, fintech solutions, artificial intelligence, data analytics, cybersecurity, deep tech, clean energy initiatives.
The company must meet the startup definition. LIAA assesses whether the planned activity meets the startup definition and whether real business activities are planned for the next 3 years; its criteria also cover the case where the foreigner only plans to establish the startup.
Proof of financial security. You must be able to show sufficient means of subsistence (per month at least the minimum wage — €780 in 2026 — per adult and 30% of that per child; for permits tied to business activity, twice the average gross wage may be required). Check the exact amount and procedure with PMLP before applying.
A clean criminal record and a valid passport (issued within the last 10 years, valid for at least 3 months after your return).
Advantages
The minimum capital investment can officially be €0 — the state doesn't require a specific amount in the company.
Up to 5 co-founders can apply together for one project.
Free movement within the Schengen area.
The possibility of applying for permanent residence after 5 years of continuous residence — you also need sufficient means of support, Latvian language skills at A2 level and a course on Latvian culture and history (Immigration Law, Article 31).
Application process
Prepare a detailed business plan.
Submit the business plan for evaluation to LIAA (the Investment and Development Agency of Latvia) or an authorized startup support organization.
Undergo the innovation assessment — an expert panel evaluates the business model's innovativeness and scalability and issues a confirmation.
Only after a positive LIAA assessment, submit the residence permit application to PMLP (the Office of Citizenship and Migration Affairs) — LIAA's confirmation is a mandatory precondition for the PMLP application, not a parallel process.
Working with a Latvian accounting firm remotely
Most foreign SIA owners never physically visit Latvia — all communication with their accountant happens remotely. Modern Latvian accounting firms are well set up for this.
How it works
Document flow. Invoices and receipts are sent electronically — by email, through shared folders (Dropbox, Google Drive), or via specialized accounting platforms.
Communication. Consultations happen remotely — by email, phone, or video call. Many firms offer support in English and Russian — especially important for foreign clients.
Bank account management. The accountant is given view-only access to online banking, to track transactions and reconcile payments.
EDS access. The accountant receives EDS authorization 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:
Does the firm have experience working with non-resident-owned companies?
What languages are consultations offered in? (English and Russian are the minimum.)
Can you get management reports — not just the mandatory VID filings, but clear reports on your company's financial position?
How does document flow work, and how quickly do they respond?
In 2026, Latvia offers a rare combination: EU market access, a favorable tax regime, and a comparatively simple registration procedure. For foreign entrepreneurs, it's one of the most accessible and strategically advantageous jurisdictions in Europe — provided the documentation is in order and the bank account question is handled proactively. Our team helps foreign founders at every stage — from company registration to day-to-day accounting, remotely. Get in touch, or see our company registration services.
Frequently Asked Questions — especially for CIS entrepreneurs
Do I need a visa to register an SIA in Latvia?
No, registering an SIA doesn't require a visa. You can register remotely using an authorized representative or electronic signing tools. A visa is only needed if you want to physically stay in Latvia.
Can Russian/Belarusian citizens found an SIA in Latvia?
Yes, but expect stricter bank scrutiny and longer review times due to the sanctions regime. It's important to ensure the company's activity and the source of funds are fully transparent and comply with EU sanctions requirements.
How long does it take to get a residence permit?
The startup visa route: preparing the business plan and the LIAA innovation assessment, then PMLP's residence permit review. The total process often takes several weeks to a few months, depending on how ready the documentation is and how complex the case is — always check current timelines with LIAA and PMLP. Unlike the startup visa, a board member's residence permit has no statutory mandatory waiting period after the company starts operating, but Article 27, part 1, point 9 of the Immigration Law (in force from 15 September 2026) provides for a temporary residence permit of up to 2 years on conditions: the company must pay at least €25,000 in taxes in each reporting year and an SIA's paid-up share capital must be at least €2,800. Each case is assessed individually against PMLP's criteria.
Can I use my home country's tax benefits?
That depends on the bilateral tax treaty between Latvia and your country of residence. Most EU countries and many non-EU countries have a double taxation treaty with Latvia. Consult a tax specialist in your own country.
Does my signature have to be a Latvian-issued eParaksts?
No. Any qualified electronic signature issued in another EU member state (under the eIDAS Regulation) works — it must be recognized as legally equivalent in Latvia. If you don't have one, a notarized and legalized power of attorney is the alternative.
See also: opening a business bank account and legal address in Latvia.
Legal sources and references
State Revenue Service (VID) — tax registration and EDS account management
Office of Citizenship and Migration Affairs (PMLP) — residence permit issuance, including the startup visa process
LIAA / business.gov.lv — business support options, including the startup visa innovation assessment
Regulation (EU) No 910/2014 (eIDAS) — the EU regulation on electronic identification and trust services, which establishes mutual recognition of qualified electronic signatures
Accounting Law — sets the bookkeeping requirements for companies registered in Latvia, regardless of the owner's citizenship
Last updated: September 2026. Information based on the Enterprise Register, VID, PMLP official materials, and international founders' experience.
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