In accordance with the legislation, the minimum authorized capital of the LLC is – 2 800 euros. It should be noted, that the founders of the LLC must pay at least 50% of the authorized capital before registration, and the rest within a year.
Structure of LLC: participants-at least 1, possibly non-resident, physical or legal person; management Board (Executive body of the company, which directs and represents the company) – 1 or more capable physical persons, possibly non-resident (a member of the Board may not be a member of the Board or auditor of the same LLC.); the auditor (any capable legal or natural person, possibly a non-resident) may not be a participant, a member of the Board or Council of the company, an accountant of LLC or a person who is otherwise interested in the activities of the company;
· Information about the founder( founders), members of the management Board, auditor of the company: full name, date and place of birth, place of residence
· If the founders are legal entities, the statutory documents of the company and the decision to establish a subsidiary / representative office will be required*
· Document on payment of Authorized capital (min. 50% of the criminal code)
· Name of the company to be created
· SIA (LLC) – 7-10 days (from the moment of signature of all documents and payment of Authorized Capital)
· Representative office/branch of a foreign company in Latvia-10-15 days.
Corporate income tax
LLC is required to retain
– 10% of dividends paid to non-residents that are not included in the black list of low and tax-free zones from the Cabinet of Ministers (15% of dividends paid to such countries).
An exception is the European Union (EU) directive on parent / subsidiary enterprises, where a subsidiary resident in an EU country pays dividends to a parent enterprise resident in another EU country.
– 10% of the remuneration for consultations received from non-residents
– 10% on interest payments to related non-resident persons
– 5 or 15% of the fee paid to non-residents, depending on the type of intellectual property – 5% of remuneration for the use of non-resident real estate in Latvia
Mandatory state social insurance contributions and income tax
If the limited liability company (LLC) does not have employees, the Law on Social Insurance establishes that mandatory social insurance contributions are charged and paid to the budget for an official with the right to sign on the basis of the minimum wage in Latvia. Today it is LVL 80 per month, thus, social contributions according to this calculation are LVL 26.47 (33.09% of the minimum wage). Social tax is paid to the budget on time every month, in turn, income tax is withheld and paid to the budget at the time of payment of wages. If the company does not carry out vigorous economic activity, there is a possibility for the LLC to conclude labor contracts, charging remuneration for the actually worked time.