Think of Latvia as your Baltic bridge to the EU, where digital innovation meets accessibility.
Latvia offers an attractive business environment with its strategic location in the Baltic region, a favorable tax system, and a streamlined company registration process. As a member of the European Union (EU) and Eurozone, Latvia provides seamless access to European markets, making it an excellent choice for global businesses looking to expand.
This guide outlines the steps to register a company in Latvia, the associated costs, and how an Employer of Record (EOR) can provide a faster, more cost-effective alternative for hiring employees without establishing a local entity.
The business benefits of registering your company in Latvia
Latvia is a strategic gateway to Europe, offering a business-friendly environment and seamless access to key markets.
Key advantages include:
- Seamless entry into the European Union, Eurozone, and Schengen Area.
- 0% tax on reinvested profits supports business growth.
- Digital-first incorporation and efficient regulatory processes.
- Multilingual talent fluent in English, Russian, and Latvian.
- A key logistics hub between Scandinavia, Western Europe, and Russia.
- Government support for innovation and tech businesses.
Do you want to grow your business in Latvia? Understanding the differences between standard company registration and expanding through an Employer of Record (EOR) is key to making the right decision.
What is the difference between standard company registration and expanding through an EOR?
Businesses expanding into Latvia have two primary options: setting up a local entity or using an EOR. While full registration offers complete operational control, an EOR provides a simplified solution for hiring employees without incorporating a legal entity.
Here’s a breakdown:
Aspect | Standard company registration | Employer of Record (EOR) |
Purpose | Establishes a legal entity, granting full control over operations. | Enables hiring in Latvia without setting up a legal entity. |
Control | Full decision-making authority over business activities. | Retains operational control while outsourcing HR, payroll, and legal compliance to the EOR. |
Cost | Requires upfront investment, including registration fees, office setup, and legal maintenance. | Fixed, predictable fees with no entity setup costs. |
Compliance | The company must adhere to Latvian labor laws, tax regulations, and financial reporting. | The EOR ensures full compliance, reducing risk and administrative workload. |
Setup time | Takes 2–4 weeks, depending on business type and approvals. | Fast-track entry, with hiring possible within days. |
Scalability | Best for businesses planning a long-term presence in Latvia. | Ideal for flexible hiring and expansion without committing to a local entity. |
Would you prefer to establish a presence in Latvia without the complexities of company registration? An EOR offers a seamless and cost-efficient solution—begin hiring and operations in days, not weeks.
How EOR simplifies Latvia company registration
Expanding into Latvia doesn’t have to be complicated. With an Employer of Record (EOR), you can hire employees quickly and remain compliant without setting up a legal entity.
Here’s how an EOR makes it easy:
- Begin hiring in weeks, not months.
- Ensure compliant payroll management covering salaries, taxes, and social contributions.
- Avoid upfront incorporation costs or long-term entity commitments.
- Scale your workforce flexibly to match business needs.
- Avoid non-compliance with Latvia’s labor laws and tax regulations.
- Leverage end-to-end HR support, including contracts, onboarding, and benefits administration.
An EOR lets you enter the Latvian market without stressing over legal processes and compliance hurdles. It’s the quickest way to grow your team and reach your goals in Latvia.
However, you must register your company in Latvia if you plan to sell directly, own or lease property, or operate in a regulated industry.
A step-by-step guide to registering a company in Latvia
You can set up a business in Latvia in just 1–3 days, but navigating the legal and regulatory landscape requires careful planning.
Follow these steps for a smooth registration process.
Step 1: Choose a business structure
Select the appropriate legal entity based on your business model:
- Limited liability company (SIA): Most common, €2,800 minimum share capital.
- Micro-capital SIA: Lower capital (€1–€2,799), but with ownership restrictions.
- Joint stock company (AS): Suitable for larger enterprises, €35,000 minimum share capital.
- Individual entrepreneur (IK): Sole proprietorship, simpler taxation.
- Partnerships (PS or KS): General or limited liability partnerships.
- Branch office: Foreign companies establishing a local presence.
Step 2: Prepare incorporation documents
Gather and notarize the required documents:
- Memorandum of association (company details)
- Articles of association (operating rules)
- Shareholder register
- Proof of business address
- State duty & publication fee payment proof
Step 3: Deposit share capital
- Open a temporary business bank account.
- Deposit at least 50% of the share capital before registration.
- Convert the account into a corporate account post-registration.
Step 4: Submit the registration application
- Submit documents in-person or online via the Latvian enterprise register portal.
- Standard processing time: 3–5 business days.
- Expedited processing is available (1 business day for an additional fee).
Step 5: Register for taxes
- Tax Identification Number (TIN): Issued by the State Revenue Service (SRS).
- VAT registration: Required if annual turnover exceeds €50,000.
Step 6: Obtain business licenses (if required)
Some industries require special permits:
- Financial services: Financial and capital market commission.
- Healthcare & pharmaceuticals: Health Inspectorate.
- Construction & real estate: Municipal authorities.
Step 7: Register employees & payroll
- Register employees with the State Social Insurance Agency (SSIA) before their first workday.
- Employers must comply with labor laws and pay social security contributions.
Next steps: Explore the costs of registering a company in Latvia and see how an EOR like Multiplier can simplify your expansion.
The real cost of registering a business in Latvia
Beyond the initial setup, registering a business in Latvia involves many financial considerations. Understanding these costs, from government fees and licensing costs to ongoing compliance expenses, is essential for strategic financial planning.
Below is a verified breakdown of key expenses:
1. Registration costs
- State registration fees
- Limited liability company (SIA): €150 (standard processing, 3 business days)
- Expedited processing (1 business day): €450
- Micro-capital SIA (small SIA with capital below €2,800): €20
- Individual entrepreneur (IK): €30
- Farm registration: €30
- Publication fee: €27.03
- Notary fees: €26–€100 (depending on complexity)
2. Share capital requirements
- Limited liability company (SIA): Minimum €2,800 (50% payable before registration)
- Micro-capital SIA: €1–€2,799 (but has ownership restrictions)
- Joint stock company (AS): Minimum €35,000
3. Taxes & operational costs
- Corporate Income Tax (CIT): 20% only on distributed profits (undistributed profits are tax-free)
- Payroll taxes (Employer contributions):
- Social security contribution: 23.59%
- Employee contribution: 10.5%
- Value-Added Tax (VAT):
- Standard rate: 21%
- Reduced rate: 12% (certain goods/services)
- Mandatory VAT registration threshold: €50,000 annual turnover
- Other potential business taxes (industry-specific):
- Real estate tax
- Natural resources tax
- Excise tax (for applicable industries)
- Lottery & gambling tax
Note: The costs above are indicative and may vary based on your business needs. Talk to our experts to get a clearer estimate tailored to your expansion plans.
Cost comparison: Standard registration vs. EOR
Setting up a company in Latvia can involve significant upfront investment and administrative work. An Employer of Record (EOR) offers a faster, low-risk way to enter the market:
Below is a cost comparison of the typical costs associated with both options:
Aspect | Standard registration | Employer of Record (EOR) |
Entity setup | Required | Not required |
Time to start operations | 3–5 weeks | Few days |
Upfront costs | Share capital, registration, legal & tax setup fees | Monthly service fee |
Compliance & payroll | Full responsibility for legal & tax obligations | Managed by EOR |
Hiring & onboarding | Self-managed | Fully handled by EOR |
Risk & liability | High (must comply with Latvian laws) | EOR ensures compliance |
Traditional registration involves upfront investments and ongoing administrative management, making it a better fit for long-term, large-scale operations. In contrast, an EOR offers a more streamlined, cost-effective alternative.
With predictable fees covering compliance, payroll, and other operational needs, an EOR like Multiplier is ideal for businesses that want to enter the Latvian market swiftly, safely, and efficiently.
Take the stress out of your Latvia expansion with Multiplier
Multiplier’s Employer of Record (EOR) solution allows you to hire employees in Latvia quickly and compliantly—without the hassle of entity setup.
Why choose Multiplier for your Latvia expansion?
Hire in Latvia without an entity.
Skip the lengthy, expensive incorporation process—Multiplier helps you legally onboard employees in Latvia within days.
Payroll & tax compliance covered
We manage payroll processing, tax deductions, and social security contributions while ensuring compliance with Latvia’s employment regulations.
Seamless HR management
From employment contracts to leave management and expense approvals, handle everything in one platform.
100% legal compliance
Latvia has strict labor laws—Multiplier ensures full compliance, reducing risks and administrative burdens.
Competitive benefits to attract talent
Offer locally compliant benefits such as health insurance, paid leave, and pension contributions—managed seamlessly by Multiplier.
Expert support & secure operations
Our dedicated support team ensures smooth operations while maintaining the highest compliance and security standards.
With Multiplier, you can enter the Latvian market, hire top talent, and manage payroll and compliance—without the hassles, risks, and costs of setting up a legal entity there.
Book a demo today to see how we can help your business grow in Latvia.
