Why Latvia
Latvia is an EU member with a tax system similar to Estonia's: 0% tax on retained profits and 20% only when dividends are distributed. Riga is the business and financial capital of the Baltics with a developed banking infrastructure.
Tax System
| Type | Rate |
|---|---|
| Corporate tax (retained profit) | 0% |
| Corporate tax (distribution) | 20% |
| VAT (turnover > €50,000/yr) | 21% |
| Personal income tax | 20–31% (progressive) |
Who It Is For
- IT companies and startups that need EU status
- SMEs focused on the EU market
- Companies with reinvestment-first models
- Trading companies in the Baltic region
Cost & Timeline
| Item | Amount |
|---|---|
| SIA registration | €140–400 |
| Annual maintenance | from €500/yr |
| Share capital | from €1 |
| Registration time | 3–7 business days |
| Bank account | 2–4 weeks |
Pros & Cons
Pros:
- 0% tax on retained profit
- EU status and access to EU single market
- Lower cost than Estonia for similar tax treatment
- Stripe, Wise, PayPal — fully supported
- Riga — developed business infrastructure
Cons:
- 20% on dividend distribution
- Strict bank KYC after 2022
- Notarisation required for registration
- Local address mandatory
FAQ
How does Latvia differ from Estonia for business?
The tax regime is nearly identical. Latvia is slightly cheaper to maintain but has a less advanced digital government infrastructure. Estonia is the e-government pioneer; Latvia offers a more traditional path.
Can a non-resident open a Latvian bank account?
Major banks (Swedbank Latvia, SEB) are cautious with non-residents. Fintech (Wise Business, Revolut) is the preferred starting point.