After more than 300 consultations with new entrepreneurs, we have noticed one pattern: people ask the same questions. Not because they aren't smart, but because Latvian legislation is scattered across dozens of portals, and straightforward answers are hard to find. In this article, we have gathered more than 75 questions real clients have asked us — from registration to liquidation. Every answer is verified against current legislation as of June 2026.
Registration Questions
How long does SIA registration take?
Usually 1–3 working days under the standard procedure. Expedited registration (24 h) costs more — a fee of €225 with e-signature.
Can I register an SIA remotely?
Yes. Using an e-signature (eID, Smart-ID, or eParaksts), the entire process can be completed online via the Commercial Register portal. Without an e-signature, a notarised power of attorney is required.
Can a foreigner be the sole owner of an SIA?
Yes. Latvian law permits 100% foreign ownership with no requirement for a local partner or resident director.
What is a low-capital SIA (mazkapitāla SIA)?
A low-capital SIA (previously called a micro SIA) is an SIA with share capital between €1 and €2,799. It is simpler and cheaper to set up, but comes with restrictions — for example, dividends cannot be paid out until the equity reaches €2,800.
What is the difference between a low-capital SIA and a standard SIA?
The main difference is the share capital (up to €2,799 vs. €2,800+) and the associated dividend restrictions. A standard SIA can freely distribute dividends from the first profit, whereas a low-capital SIA must first accumulate at least €2,800 in equity.
What documents are needed to register an SIA?
Application form, foundation resolution (or agreement, if multiple founders), articles of association, shareholder register excerpt, board member's consent to take office, and address confirmation. All documents can be signed with an e-signature.
How much does SIA registration cost?
State fee: €150 for standard processing, €250 for expedited (paper); or €20 (low-capital SIA) / €75 (standard SIA) via e-signature. Plus potential notary fees (€0–150), legal address (€300–600/year), and accounting setup (€100–300).
Do I need a legal address, or can I use my apartment?
An apartment address may be used if you are the owner or have the owner's written consent. An alternative is a virtual office (from €10–30/month).
How much does changing a legal address cost?
The state fee for changing a legal address is €20 (electronically). Documents must be submitted within 14 days of the decision.
Can I change the SIA's name?
Yes. Amendments must be filed with the Commercial Register. The state fee is €20 for a single change or €40 for two or more simultaneous changes. Register processing — 1–3 working days.
How many NACE codes can I list?
There is no strict limit, but it is advisable to list all codes matching your planned and potential activities. Too narrow a list will mean having to amend the articles of association later.
Do I need to be physically present at the Register to file documents?
No. Documents can be submitted electronically via the Register portal using an e-signature. A physical visit is only necessary if you do not have an e-signature.
Tax & Accounting Questions
What is the VAT registration threshold?
€50,000 over a rolling 12‑month period. If this amount is exceeded, you must register as a VAT payer within 15 days.
Can I register for VAT voluntarily?
Yes, any business may register voluntarily regardless of its turnover. This is advantageous if you have large initial investments and wish to recover input VAT.
What happens if I miss the VAT registration deadline?
The SRS (VID) can assess VAT retroactively. Every invoice issued during the intervening period becomes subject to 21% VAT, and you bear the cost. Amounts range from €2,000 to over €15,000 depending on the length of the delay.
What is the CIT (UIN) rate?
Under the standard regime — 20% on distributed profits (calculated using the 20/80 formula). Under the alternative regime — 15% CIT + 6% PIT on dividends. As long as profits are not distributed, CIT is 0%.
Do I pay CIT if I don't pay out dividends?
No, under the standard regime, CIT only arises when profits are distributed. However, be mindful of deemed profit distributions — non-business expenses, representation cap overages, and bad debts that may trigger CIT liability.
What is the alternative CIT regime?
From 1 January 2026, companies whose shareholders are exclusively natural persons may choose to pay 15% CIT on distributed profits, plus 6% PIT on dividends. This regime is more advantageous if you plan to distribute most of your profits (above 75–80%).
What are the most important tax deadlines to remember?
Employer report — by the 17th
VAT return — by the 20th
Social contributions and PIT payment — by the 23rd
CIT return — by the 23rd (only in months where a liability arises)
When must the annual report be filed?
Micro and small companies — by 31 May (if the reporting year matches the calendar year). Medium and large — by 31 July.
What happens if I don't file an annual report?
The SRS may impose a fine of up to €600. If the report remains unfiled for more than 8 months past the deadline, the Register may initiate forced liquidation.
Do I have to file an annual report if the SIA had no transactions at all?
Yes. Even a completely inactive company must file an annual report. The deadline is the same as for active companies.
Can I file the annual report myself, without an accountant?
Technically — yes. However, preparing an annual report requires specific accounting knowledge, and EDS only allows it to be filed once — if there is an error, it cannot be corrected. Most companies use an accountant's services.
What is the minimum wage in 2026?
€780 per month under the general regime. In the construction sector — €1,050.
Must a board member receive at least the minimum wage?
If the board member is in an employment relationship and this is their only workplace, the salary must be at least the minimum wage. If the board member also works elsewhere where social contributions are already paid on at least the minimum wage, the SIA may pay a smaller amount.
What is the representation expense cap?
5% of the previous year's total gross wages. Any excess is subject to CIT.
Can I use an SIA car for personal purposes?
Yes, but you must be able to separate the proportion of business use. Without such separation, input VAT is only deductible at 50%, and personal use may be treated as a deemed profit distribution.
How long must accounting documents be kept?
At least 10 years. This applies to all primary documents, accounting registers, and annual reports.
Shareholder & Board Questions
What is the difference between a shareholder and a board member?
A shareholder is the SIA's owner — they hold capital shares. A board member is the SIA's executive body — they manage the company, sign contracts, and are responsible for its operations. One person may be both a shareholder and a board member.
Is a shareholder liable for the SIA's debts?
No, a shareholder's liability is limited to their invested share capital. The exception is where the shareholder has given a personal guarantee (e.g. for a bank loan).
What is a board member's liability?
A board member is responsible for the SIA's operations and may be held civilly, administratively, and criminally liable. This is especially the case if they failed to file for insolvency in a timely manner or if the SIA has not paid its taxes.
Can a board member be a foreign national?
Yes, without restriction. A board member does not need to be a Latvian resident.
How many board members can there be?
At least one. There is no upper limit.
How do I change a board member?
Convene a shareholder meeting, adopt a resolution to remove the board member and elect a new one, and file an application with the Register (form KR13). State fee — €20 (electronically).
Can a board member also be an employee?
Yes. A board member may be in an employment relationship (receiving a salary) or receive compensation solely as a board member (without an employment contract). The tax regime differs in each case.
What is the ultimate beneficial owner (UBO)?
The natural person who directly or indirectly owns more than 25% of the SIA's capital shares or who directly or indirectly controls the SIA. The UBO must be registered with the Commercial Register.
Can I sell my SIA shares?
Yes, capital shares may be sold, gifted, or otherwise transferred. The transaction must be in writing, and the changes must be registered with the Commercial Register.
How are the articles of association amended?
A shareholder meeting must be convened, a resolution adopted by at least a 2/3 majority, amendments to the articles prepared, and filed with the Register within 14 days of the resolution.
Can I pay myself dividends every month?
Yes, technically dividends may be distributed at any frequency, but each distribution must be based on a shareholder resolution and comply with the restrictions of the Commercial Law. From 2026, extraordinary dividends are also possible.
Bank & Payment Questions
Is it mandatory for an SIA to have a bank account?
Yes, an SIA must have a current account. Using a personal account for SIA transactions is not permitted.
How long does it take to open a bank account?
Usually 2–4 weeks. Some banks (especially fintechs — Revolut Business) can open an account in 2–10 days. The process may take longer for non-residents.
Why did the bank refuse to open an account for me?
The most common reasons: unclear business model, inability to prove the source of funds, high‑risk industry, or an SIA with no genuine connection to Latvia (especially for non-residents).
Which banks in Latvia serve SIAs?
Swedbank, SEB, Citadele, Luminor, LPB Bank (specialises in non-residents), and Revolut Business (LT IBAN). Each has its own advantages and disadvantages.
Can I use Revolut Business for my SIA?
Yes. Revolut Business provides a Lithuanian (LT) IBAN that works fully within the SEPA zone. Advantages — fast opening, low costs, excellent app. Disadvantages — no cash operations, no loan products.
Can I receive payments from foreign clients into my SIA account?
Yes, without restriction. SEPA payments in euros are fast and cheap. Payments outside SEPA or in other currencies may incur higher fees.
What should I do if the bank freezes my account?
Contact the bank immediately to understand the reason for the freeze. It is usually related to a KYC update or a suspicious transaction. Prepare the requested documents as quickly as possible.
Closing & Restructuring Questions
How do I close an SIA if it is no longer needed?
Two options: voluntary liquidation (a formal process involving a liquidator, a creditor period, and final tax clearance) or selling the SIA to another person.
How long does an SIA liquidation take?
The minimum timeline is approximately 4 months (including the mandatory 3‑month creditor period). In practice, the process can take 5–8 months.
How much does SIA liquidation cost?
State fee — approximately €30 for the application and the publication in Latvijas Vēstnesis. Plus accountant's fees for preparing final accounts (€200–500) and potential liquidator costs.
What happens if I simply "abandon" the SIA?
The SIA continues to exist, tax debts accumulate (even without any activity), and after 8+ months without an annual report, the Register may initiate forced liquidation. The board member may become personally liable for tax debts. Never leave an SIA unattended.
Can I sell an SIA rather than liquidate it?
Yes, selling capital shares is a common alternative to liquidation — especially if the SIA has value (licences, contracts, name).
What is a liquidator, and who can serve as one?
A liquidator is the person who manages the SIA's closure process. This may be a former board member, a shareholder, or an external specialist (lawyer, accountant).
Am I liable for the SIA's debts after it is closed?
As a shareholder — no (unless you gave a personal guarantee). As a board member — possibly, if the SRS proves the board failed to act with due care.
Can an SIA be converted into a different business form?
Yes, an SIA may be reorganised — merged with another SIA, divided, or converted into a joint-stock company. The process is more complex than a straightforward liquidation.
This article is regularly updated to reflect the latest legislative changes. If you have a question not answered here, contact us — we will add it in the next update.
Last updated: June 2026. Information is based on the Commercial Law, the Corporate Income Tax Law, the Value Added Tax Law, the Labour Law, and official Register/SRS materials.
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