Starting a business in Latvia

The Baltic countries create favorable conditions for foreigners to do business. Our compatriots are especially attracted by Latvia, known for its low tax rates, loyal attitude towards investors and fast company registration. Therefore, more and more often, the views of small and large entrepreneurs lie to the borders of this country.

General information about business immigration in Latvia

Latvia is very interested in migrants who are able to invest in the country's economy.

Therefore, it creates conditions for their attraction:

• Forms special economic zones;
• Simplifies the legal framework;
• Introduces support programs for entrepreneurs.

What is business immigration

Business immigration of Russians to Latvia is the relocation of active and enterprising citizens to permanent residence in order to conduct business outside their homeland. Most often, our compatriots plan to open their own company in Latvia, but sometimes they transfer an already established business from Russia.

What is a business visa and what type of visa you can get in Latvia

Latvia is a member of the European Union, and Russians cannot enter the country without first obtaining a visa. It is necessary to take care of all the paperwork at home, given the fact that an ordinary tourist visa does not give the right to work and engage in commercial activities in the territory of Latvia.

For business purposes, foreigners need to apply for a business visa. Its distinctive features are:

• Multiple entry permit;
• Registration for 12 months;
• Ability to visit other Schengen countries.

The permitting document will have a category "C".

It is impossible to extend a visa while in the territory of Latvia. To do this, you will have to temporarily return to Russia and again submit documents to the embassy.

What type of business is more profitable to open in Latvia

Over the past 2 years, more than half of all companies opened in the country have been registered by foreign businessmen. Statistics show that large, small and medium-sized businessmen feel equally well in Latvia.

Some Russian entrepreneurs come to the country and start up industrial enterprises, while others open small beauty salons. Both are treated equally in the country.

The interests of business immigrants most often lie in the following spheres:

• Hotel industry;
• Services;
• Catering;
• Construction.

The tourism business is of great interest to foreigners. He gives 70% Latvia's GDP, therefore, projects in this area always bring the maximum profit.

Conditions of immigration to Latvia for entrepreneurs

Latvia is a hospitable country, but being on its territory requires a number of paperwork.

Choosing the required visa, conditions for obtaining it

To conduct business on the territory of the country, a foreigner needs a permit document of category "C".

It is issued according to a standard package of securities, but has a number of restrictions on the period of stay in Latvia:

• A foreigner can live directly in the country for 180 days a year;
• There cannot be more than 90 such days in 6 months.

A business visa is suitable for those entrepreneurs who do not plan to permanently reside in the territory of Latvia. If it will be enough for them to periodically come to the country to conduct business, then this type of permitting document can be drawn up.

There are no special requirements for an applicant for a business visa. Every applicant can get it.

Conditions for obtaining a residence permit, permanent residence, citizenship

Businessmen who need a permanent residence in the territory of Latvia need to apply for a residence permit. This happens through financial investments in the economy of the state.

Entrepreneurs are offered one of the following options to make investments:

• Register the company in the form of LLC or JSC with authorized capital at 35,000 euros;
• Invest in the country's banking system at least 280,000 euros;
• Purchase a property with a total value 250,000 euros.

A residence permit is issued for a period of 5 years, subject to the fulfillment of one of the above conditions.

Businessmen who decide to use the first method should take into account that a residence permit can be issued only a year after the opening of the company and payment of all taxes. The payment amount will be 40,000 euros.

After 5 years of residence in Latvia, foreigners have the right to apply for permanent residence. An important condition for obtaining this status is permanent residence in the country. Annual absence is allowed for a period not exceeding 2 months.

The applicant for the assignment of the permanent residence status must pass the language proficiency test. Absolutely all foreigners pass it, with the exception of persons suffering from serious health problems.

These may include:

• Decreased vision;
• Cerebral circulation disorders;
• Head injuries and so on.

A certificate of exemption from the exam is issued on the basis of an examination carried out by a rehabilitation physician.

After another 5 years, an entrepreneur gains the right to apply for citizenship by naturalization.

The applicant must meet the following requirements:

• Be over 15 years old;
• To live in the country without leaving for at least 5 years;
• Show good command of the language;
• Know the history of the country;
• Study the main legislative acts;
• Submit a bank statement and indicate the source of income.

Russians must renounce their citizenship of the Russian Federation without fail. They add a statement to the package of documents for citizenship with an official renunciation of Russian citizenship.

Buying a ready-made business and starting from scratch

In Latvia, registering your own business is as simple as possible, so most migrants prefer to start a business from scratch. The easiest way is to entrust this process to a specialized design company. For their services, they charge an average of about 1000 euros.

This amount includes:

• Collection of all necessary papers;
• Translation of documents into Latvian;
• Submission of papers to government agencies.

A ready-made business in Latvia is also in demand among our compatriots. The advantages of such a purchase include:

• Fame;
• Established connections;
• Transparent history;
• Confidence of counterparties.

Before acquiring a company, Russians assess its potential. For these purposes, it is recommended to form a commission of Latvian and Russian specialists. But some immigrants turn to the services of special bureaus. They own a list of firms for sale and provide advice on the activities of the companies.

What business options in Latvia are most common among Russian immigrants

Our compatriots are interested in the same types of business that generate income for Latvians.

A lot of positions fall into the TOP:

• Hotel business;
• Banking business;
• Food industry;
• Woodworking;
• Transportation of goods.

Russians planning to do business in Latvia for a long time are advised to consider the woodworking industry. It promises big prospects for businessmen due to the abundance of resources. Furniture manufacturing will be successful in this area. Investments in such companies pay off in 3-4 years.

Cargo transportation is also one of the most promising areas. The economy of Latvia is actively developing, therefore, companies engaged in the transportation of goods in different directions are never left without work. The increased interest in the country from tourists also contributes to the growth of the client base of such companies.

Another industry where Russians prefer to invest is construction. On the rise are:

• Individual residential construction;
• Commercial construction.

Business ideas with minimal investment

It is beneficial to open small establishments with wide functionality in Latvia. For example, with limited financial resources, you can open a mini-studio for sewing clothes, and next to it place a store with sewing accessories and fabrics. With a good choice and pleasant design, the business will bring a stable income.

Tourists from all over the world flock to Latvia, and the guest house will be profitable even in the off-season. This business does not require large investments. The only problem will be the choice of a place in the resort area - the best ones have long been occupied by large hotels and boarding houses.

Latvians monitor their health very closely. Therefore, a fitness club, open on a small area, will be in demand among local residents. Especially if in an advertising company you position it as a closed club with a limited number of seats.

The minimum investment is required:

• Mobile cafe;
• Vending machines selling chocolate and snacks;
• Express delivery.

Real-life examples of doing business

Our compatriots are actively developing in Latvia and are not afraid to invest in the country's economy. For example, not so long ago Andrei Beskhmelnitsky came to the Latvian market. He purchased a dairy plant in Riga, which he is currently modernizing. In the future, the entrepreneur plans to use only local raw materials in his work and export products to European countries.

Alexander Gusakov bought a sanatorium in a Latvian resort. After financial injections, it turned into a luxury spa hotel, which attracts tourists from all over Europe.

Legal nuances

Doing business abroad requires legal literacy from a businessman. Without knowledge of the nuances and subtleties of Latvian legislation, an entrepreneur will have a difficult time even at the initial stage of work.

Business registration

The following forms of ownership are available to foreigners in Latvia:

• LLC (SIA) - the opening takes place in 4 working days and does not require the presence of a person with EU citizenship among the founders;
• JSC (AS) - the authorized capital of the company is 35,000 euros;
• Individual merchant (Individuālais komersants) - all responsibility for the activity is borne by the individual who established the company;
• Branch of a foreign company - the director makes decisions independently, but all activities are controlled by the parent company;
• Representation of a foreign company - this form does not give independence and does not allow commercial activities.

On average, opening a company takes 12-14 working days and takes place in 4 stages:

1. Preparation of samples of signatures of founders (each must be notarized);
2. Opening a bank account and depositing the authorized capital on it (you will need an account statement for registration);
3. Submission of papers to the Register of Enterprises of Latvia (registration takes 4 days);
4. Registration of the certificate with the State Revenue Service (about 10 days).

An approximate package of documents for opening a company is as follows:

• Application certified by a notary;
• Charter;
• Establishment agreement;
• Bank statement;
• Confirmation of payment of state duty (about 142 euros);
• Receipt of payment for publication (information about new companies should be posted in the official newspaper Latvijas Vēstnesis);
• Information about the legal address (it can be rented, since the address must only be Latvian).

If a businessman wants to speed up the registration process, he can pay a threefold fee.

Taxation

The tax base in Latvia is considered one of the most convenient for entrepreneurs:

• Income tax - 15%;
• Dividend tax - 10%;
• VAT - 21%.

When hiring workers, insurance premiums are added to the list - a little more 34%.

Other nuances

Many activities require a license. This category includes:

• Catering business;
• Trade in tobacco and alcoholic beverages;
• Building.

All documents for registration of a company must be translated into Latvian. For these purposes, you will have to turn to professional translators.

The choice of the company name is limited to words in Latvian.

Advantages and Disadvantages of Doing Business in Latvia

Business immigration to Latvia has its pros and cons. Entrepreneurs consider the following obvious advantages:

• Low taxes;
• Developed infrastructure;
• An extensive transport network;
• Lack of pressure from the state;
• Access to the European market.

The disadvantages include:

• Generally negative attitude towards Russian migrants;
• The high cost of labor;
• All papers are kept in Latvian.

Advice for Latvian business immigrants and examples of failed business attempts by Russians in Latvia

Entrepreneurs successfully doing business in Latvia recommend to their compatriots:

• Start small business;
• Do not avoid lending - the country has developed financial support for novice businessmen;
• Use government programs to provide start-up capital to start a business.

Not all of our compatriots succeeded in getting things right in Latvia. For example, a group of Russian journalists who decided to open a bistro here suffered a crushing fiasco. With an initial investment of 8000 euros the institution brought only losses every month - up to 1000 euros... In order not to fall into the abyss of debt, the bistro had to be closed.

Of all the Baltic countries, Latvia is the most attractive for foreigners to do business. They receive many advantages, but migrants will also have to face difficulties every day. Therefore, before moving to Latvia and starting a business, entrepreneurs should live a little in the country in order to clearly understand what awaits them.