Understand the Jurisdictions Setup Requirement Before Proceed Your Company Incorporate in Latvia
Many investors are flocking in Latvia because it is a member of the European Union (EU). Being part of one of the major economic blocs, the country has access to diverse and big markets, making it attractive to company incorporate in Latvia.
Apart from market access, the country also has other advantages when it comes to doing business. It offers a booming business environment and competitive tax perks, which the investors are always looking for.
The World Bank placed Latvia among the top 15 per cent across the world in terms of ease of doing business. It excels in providing credit for firms, helping to start a business, register real estate, ease of paying taxes, and international trading, among others.
The country is a free market economy. What does this mean? Their economic policies are implemented to decrease government intervention and to prevent monopolies across different industries. Latvia is the world’s 37th most free economy, according to a report by the Wall Street Journal and the Heritage Foundation. They considered the following factors: fiscal, trade, investment, corruption level, and government spending.
Looking Into the Economy of Latvia
Let us take a look at the country’s economy. After all, you will have to understand the business environment first before you company incorporate in Latvia.
The country has been exhibiting a stable economic growth pace. It is even surpassing the average growth in the EU region. The gross domestic products (GDP) growth of Latvia has averaged at 3.5 per cent annually from 2011 to 2018.
In 2017 and 2018 alone, GDP rose by 3.8 per cent and 4.6 per cent, respectively. The improvement in employment and wages, along with a better external environment, pushed the fast-paced economic growth.
Latvia recorded a lower economic growth of 2.5 per cent in 2019. The decline was amid the controversial Brexit or Britain’s exit from the EU and the weaker economic performance from fellow EU members.
In 2020, economists are expecting the country to record a plunge in the economy. Focus Economics, to be more specific, is anticipating the GDP of Latvia to contract by 5.2 per cent in 2020 as the world struggles because of the coronavirus pandemic. The pandemic has caused a massive lockdown across the world, prompting the economy to suffer as well.
In 2004, Latvia joined the EU. The country is trading freely among EU member-states under the agreement.
Sectors to Consider When You Company Incorporate in Latvia
When you company incorporate in Latvia, you should look first at the promising sectors. These are your compass toward the allocation of your investment. Know which industries are likely to give you a quick return on investment.
Latvia is enjoying its fertile soil and accommodative climate for agriculture. This sector is showing a great deal of traditional trade of the Latvians. A big portion of the sector is composed of grains. Meanwhile, Latvia is exporting high-value items such as dairy products and honey.
Specially trained human resources are serving as the backbone of the chemical industry. Latvia is manufacturing and exporting pharmacy, environment-friendly chemicals, and bio cosmetics, among others. Local experts are producing research to develop the industry more. They understand that more money should be put into these studies to grow the sector.
Given the geographic location of Latvia, the country has established a thriving logistics sector. Its ports, rails, and roads are linking Europe to other nations as well. Some 25 million customers are being reached in the Baltic region next to Latvia within 48 hours only. Truly, the infrastructure of Latvia is allowing the sector to operate smoothly.
Forests are covering half of the country. Moreover, a portion of the trees is cut down and exported. Lumber and processed wood products are some of the note-worthy Latvian exports. To ensure a balance between business and mother nature, the government is putting up natural reserves for robust forestry. Indeed, they are making sure that the environment is not sacrificing itself just for the money.
Electronics and Information Technology
If you still do not know yet, Latvia is taking big strides toward technology to remain competitive. It is producing high-tech electronics and information technology tools, among others, to supply the demand from the world markets. With this, the government and companies are investing for much-needed infrastructure in logistics and communications to boost the sector and economy.
How Are You Going to Company Incorporate in Latvia?
When your company incorporate in Latvia, there are many things you should remember. Let us discuss them.
Selecting the Type of Business
In Latvia, investors have different paths to choose for the type of business. It can be a sole tradership, joint-stock company, and branch or representative office. However, the common type is a limited liability company.
Limited liability means the investors are only liable up to the extent of their contribution to the company. When settling company liabilities, the business cannot go against the personal assets of the investors.
A limited liability company can have share capital amounting to as much as €2,800. Individual investors are setting up this kind of business, and not another legal entity. In addition, it can have as much as five founding members.
Accomplishing the Required Documents
Investors are filling up numerous forms when the company incorporated in Latvia. Good news is all these are available at the country’s Enterprise Register website. You can sign documents digitally with the help of an electronic signature.
Opening a Bank Account
Of course, the company needs to have its own bank account. Moreover, such a process is done quickly in Latvia. You can deposit the initial capital immediately upon opening the account.
Submission of Documents to the Enterprise Registry
Following this, submit all the required documents to the regulator. The Enterprise Registry is going to check them and verify the authenticity of the documents. After that, you are paying the fees to set up your company.
The Enterprise Registry will give you the notice regarding the approval of your company. If there are no concerns with your application, you can secure the approval and begin operations.
Professional Guide to Build Your Company
3E Accounting offers a wide range of products and services, including accounting, taxation, advisory, and other types of business support. If you need help to company incorporate in Latvia, do not hesitate to reach out. Contact us and our team will help you right away.