Latvia is part of the European Union, Eurozone and NATO. Official language – Latvian.
Due to its favorable geographical location between the Scandinavian countries and the countries of Eastern Europe, Latvia is an excellent place to start a business.
Latvia has signed over fifty double taxation avoidance treaties (DTT). DTT aims to prevent double taxation of income and/or profit or allows to apply a lower tax rate.
The effective corporate tax rate is 25%, but the tax applies only to distributed income. When the income received by the company is reinvested, the tax is not paid.
A company can be established by an individual or legal person, resident or non-resident. Remote company registration is possible, however, at least one visit is required to open a bank account or to meet with tax authorities.
To register for VAT it is necessary to file an application, and in certain cases, an interview at Revenue Service offices. The threshold for the registration of VAT is 40,000 EUR of taxable supplies, the threshold of transactions with EU countries is 10,000 EUR.
Latvian companies must keep accounting records, submit monthly or quarterly tax returns to the Revenue Service, as well as prepare and submit annual financial statements.