LLC or joint-stock companies are registered in Latvia as commercial companies. The most popular of the forms is limited liability company, hereinafter referred to as LLC. A subsidiary is a commercial company or a cooperative company registered in the Republic of Latvia, a European group of economic interests registered in the Republic of Latvia, a European cooperative company or a European commercial company, or a commercial company registered in another foreign country controlled by its parent company.

In accordance with the general procedure, a legal liability division principle s applicable in Latvia (Sec. 137 of the Commercial Law), i. e., that a company is liable for its obligations with all its property, therefore, the company is not liable for the shareholder's obligations and the shareholder is not liable for the company's obligations, or, in other words, the parent company is not liable for obligations of the subsidiary, and vice versa.

However, division of legal liability is not a sufficient reason to not apply the liability to the parent company for the subsidiary's violations of competition law. Thus, on 17 May 2018, the Supreme Court of the Republic of Latvia adopted a judgment solidifying in Latvian competition law that parent companies may be jointly liable for the violations of competition law committed by subsidiaries. This means that the Competition Council (CC) in cases of competition law violations will be entitled to apply to parent companies the liability for competition restrictions allowed by subsidiaries also in future.

LLC is registered by the Register of Enterprises within 5 working days. LLC is managed by and liable for its activities is the Board. Its members may be both residents and non-residents. There are no restrictions in the commercial activities of LLC, including in choice of types of activities.

Most important aspects

Can carry out commercial activities, is a legal person, must submit an annual report.

Reports and Tax

LLC must submit all tax reports provided for in the law in accordance with general procedure:

• social tax (hereinafter referred to as SOC) and individual income tax (hereinafter referred to as IIN) report (if employees are employed); 
• value added tax (hereinafter referred to as VAT) report, if registered;
• annual report must be submitted;
• LLC is a payer of the enterprise income tax (hereinafter referred to as EIT);
• as well as other tax reports depending on the field of activities of a specific company, e. g., natural resource tax report, excise tax report, etc.

Why choose Latvia:

• Opportunity to register a representative office in Europe as Latvia is an EU member state;
• Centre of the Baltic States, extensive network of logistics centres;
• Simple tax and accounting legislation;
• Understanding and accommodating attitude from authorities incl. from the State Revenue Service towards entrepreneurs;
• CIT rate of 0% on reinvested profits: It is cost effective to register an LLC if the company plans to invest in further development of the LLC. Latvia is popular among investors in the IT industry;
• Short and simple legal person registration process (within 5 days);
• VAT number in Europe. Latvia has concluded 62 conventions on the avoidance of double taxation and the prevention of fiscal evasion.

Why choose Euroaudit:

• More than 20 years in the accounting market;
• Staff of 20 qualified accountants and consultants;
• We speak fluent Latvian, Russian, and English;
• Full accounting cycle (document processing, verification, entry into accounting program, preparation and submission of reports);
• In working with clients, we extensively use export of large amounts of data (Excel, XML);
• Extensive experience in VAT accounting in Latvia for foreign companies;
• Civil liability insurance;
• Large network of partners: Tallinn, Vilnius, Kiev, Baku. We cooperate on dealing with various matters on behalf of our clients.
• The right choice if you need a branch in Europe.

Euroaudit is your Representative in Latvia providing tax consultancy, accounting and legal person registration services. Please contact our specialists by phone +371 25900918 or e-mail: info@euroaudit.lv