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EU Baltic state with 0% tax on reinvested profits
Region
EASTERN EUROPE
Corporate Tax
20%
Setup Time
1 weeks
Currency
EUR
Latvia, the middle Baltic state, offers EU membership with lower costs than Western Europe. The country's digital-friendly company registration supports business setup for businesses seeking Baltic or EU positioning.
With a population of 1.9 million, Latvia offers compact European living. Latvian is the official language, with Russian widely spoken and English growing among younger people. Riga provides historical charm with modern amenities.
Healthcare is available through mandatory insurance, with quality improving. Safety is good. The cost of living is low for the EU, making Latvia accessible.
The Art Nouveau architecture, forest landscapes, and cultural heritage create distinctive appeal.
Corporate tax applies only on distributed profits at 20%. Personal income tax is progressive to 31%. VAT applies at 21% standard rate. The distributed-profit model strongly benefits reinvesting businesses.
Latvia uses the Euro. The economy has diversified from transit-dependent to services and tech. Startup ecosystem has emerged.
Company registration through the Register of Enterprises is increasingly digital. The SIA (limited liability company) is the standard vehicle. Foreign ownership faces no EU restrictions.
Company formation takes approximately 1-2 weeks. Minimum capital is EUR 2,800 for SIA. At least one board member is required. Annual compliance includes financial statement filing.
Latvia has implemented virtual asset service provider registration under AML frameworks. The approach follows EU standards, with MiCA implementation upcoming.
The Lotteries and Gambling Supervisory Inspection regulates gambling. Online gambling licensing exists with established compliance frameworks. The market is regulated but accessible for qualified operators.
The small population limits domestic market opportunities. Emigration has affected workforce availability. Russian-speaking market connections have geopolitical sensitivities.
Banking access is available through Latvian and EU banks. Professional services are developing. Latvia offers EU access at Baltic costs.
Latvia suits cost-conscious EU market entry, tech operations, and businesses benefiting from distributed-profit taxation for their business setup.
Local: SIA
Local: AS
Local: Branch
| Corporate Tax Rate | 20% |
| Personal Income Tax Rate | 31% |
| VAT / Sales Tax | 21% |
| Capital Gains Tax | 20% |
| Withholding Tax | 0% |
| Reduced Corporate Tax Available | Yes |
| Non-Resident Withholding Exempt | No |
| Tax Treaty Network | Yes |
| Banking Access | MEDIUM |
| Financial Privacy | LOW |
| Currency Controls | NONE |
| Local Bank Account Required | Yes |
| Non-Resident Bank Account Allowed | No |
| Physical Presence for Banking | Yes |
| Banks Restrictive (High Risk) | Yes |
| AML Officer Required | No |
| MLRO Required | No |
| Compliance Officer Required | No |
| Data Protection Officer Required | No |
| Bookkeeping Frequency | Annual |
| Local Bookkeeping Required | Yes |
| Mandatory Audit | No |
| License Required | Yes |
| Local Director Required | Yes |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $50,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | EU Travel Rule / FATF |
| Business Plan Required | Comprehensive business plan with financial projections, risk management, IT security details required |
| Personnel Required | CEO, Compliance Officer, MLRO, at least 2 management board members (1 must be Latvian resident) |
| Insurance Required | No |
| Remote Incorporation Possible | Yes |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 2 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | Public register maintained by Latvijas Banka |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Quarterly |
| Accounting Audit Mandatory | No |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | Yes |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Latvijas Banka (Bank of Latvia) |
| Licensing Fee | $2,500 |
| Licensing Fee Details | Application fee €2,500; Annual supervision fee €5,000 plus up to 0.6% of gross revenue |
| Permitted Business Models | Exchange, Custody, Transfer, Advisory, Portfolio Management, Trading Platform |
| Permitted Activities | Crypto-to-fiat exchange, crypto-to-crypto exchange, custody and administration, transfer services, investment advice, portfolio management |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | Yes |
| Derivatives Allowed | No |
| RWA Tokenization Allowed | Yes |
| App Store Listing Allowed | Yes |
| Crypto Custody Allowed | Yes |
| License Required | Yes |
| Local Director Required | Yes |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $1,400,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | N/A |
| Business Plan Required | Development plan including gambling operations, expected revenue and expenditure required |
| Personnel Required | Casino/gambling hall administrator, responsible gambling officer |
| Insurance Required | No |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | No |
| Min. Shareholders | 1 |
| Min. Directors | 1 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | Lotteries and Gambling Supervisory Inspection maintains public register |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | Yes |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | No |
| Regulators | Lotteries and Gambling Supervisory Inspection (Izložu un azartspēļu uzraudzības inspekcija) |
| Licensing Fee | $427,000 |
| Licensing Fee Details | Land-based casino: €427,000 initial + €37,000 annual renewal; Online gambling: €200,000 initial + €37,000 annual renewal; Additional fees per table/machine |
| Permitted Business Models | B2C, B2B (with separate licensing) |
| Permitted Activities | Casino games, slot machines, bingo, totalizator, sports betting, online gambling, lotteries |
| Restricted Activities | Foreign shareholders limited to 49% unless EU/EEA/OECD resident; Minimum gambling age increasing to 21 |
| Cross-Border Service Allowed | No |
| Physical Inspection Required | Yes |
| Player Fund Segregation | Yes |
| B2B/B2C Separate Requirements | Yes |
| License Required | Yes |
| Local Director Required | Yes |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $350,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | FATF compliant / PSD2 |
| Business Plan Required | 3-year business plan with financial projections, target market, organizational structure required |
| Personnel Required | At least 2 directors with relevant financial services experience, Compliance Officer, AML Officer |
| Insurance Required | Yes |
| Insurance Details | Professional indemnity insurance required |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 2 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | Latvijas Banka maintains public register of licensed institutions |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Latvijas Banka (Bank of Latvia) |
| Licensing Fee | $7,000 |
| Licensing Fee Details | EMI license application fee; Additional annual supervision fees based on revenue |
| Permitted Business Models | EMI, Payment Institution, Investment Firm |
| Permitted Activities | Electronic money issuance, payment services, e-wallets, payment card issuance, money remittance |
| Restricted Activities | Banking services require separate credit institution license |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | Yes |