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When doing business in Latvia, companies enter a Northern European market that blends industrial tradition with strong innovation potential. The economy is shaped by key sectors such as manufacturing, pharmaceuticals, logistics, ICT, smart energy and business services, while investment incentives encourage growth in forward-looking areas including bioeconomy, photonics, medical technologies and global service operations.
Latvia offers a transparent and efficient environment for company formation, taxation and VAT obligations, supported by digital public registers and clear procedures for both local and foreign businesses. Labour regulations follow well-defined rules on employment contract types and eligibility for EU and non-EU workers, complemented by a structured personal income tax and social security framework that applies across different categories of income and business activity.
Together, these factors make Latvia an appealing destination for investors seeking opportunities in the Baltic region. This infographic highlights the essential points to review before entering or expanding on the Latvian market.
Our free eBook on international expansion was created in cooperation with our global business community, Accace Circle, providing basic yet valuable information from 17 countries. Breeze through the specifics of doing business across different markets and compare key data that may be crucial for your ambitions of international expansion.
Most common industries:
Industries favoured by investment incentives:
Most common legal form of business: Limited liability company
Required no. of shareholders: at least 1
Required no. of directors: at least 1
Official company registers: www.ur.gov.lv/en/
* When submitted electronically a state fee 75 EUR (expedited registration 225 EUR); if paper-based a state fee and notary/postal costs typically EUR 26 to EUR 100
Who are tax residents: companies that are incorporated in Latvia, have a place of effective management located in the country or have a permanent establishment formed
Tax period: monthly
Due date for CIT return: filed each month if a tax base (i.e., distributed profits) arises. The due date is the 20th day of the following tax period
VAT registration for residents: Mandatory if taxable transactions exceed EUR 50,000/year, if receiving services from abroad, or providing services to VAT-registered EU entities. Register before cross-border transactions. Voluntary registration allowed before threshold.
VAT registration for non-residents: Mandatory for EU businesses exceeding EUR 50,000 in taxable/exempt transactions, over EUR 10,000 in EU goods acquisitions, supplying excise goods, or providing distance/electronic sales beyond EUR 10,000 (unless Union scheme applies). Also required for installing goods or EU-wide supplies over EUR 100,000. Third-country businesses must register if liable for VAT in LV, unless non-Union scheme applies.
Other applicable taxes:
In Latvia, there is no wealth tax or regional income tax.
Who is entitled to work in Latvia:
Types of employment contract:
* 25.5% on annual income up to €105,300 and 33% on the portion of annual income exceeding €105,300
Additional 3% surcharge is applied to total annual income exceeding €200,000
Who are tax residents: Individuals who have a permanent place of residence in Latvia, are present in Latvia for 183 days or more within any 12-month period or are a citizen of Latvia employed by the Latvian government abroad
Tax period: calendar year
Due date for PIT return: for income up to €105,300 the return must be submitted between March 1 and June 1 of the following year, for income above €105,300 – between April 1 and July 1 of the following year
Taxable incomes in Latvia: employment and self-employment income, capital gains, rental and other income, e.g., sale of agricultural products
There are no separate health insurance contributions – a portion of the social security contributions is allocated to healthcare.
Doing business in Latvia can be a smooth process when you have the right support team by your side. Entering the Latvian market brings both exciting opportunities and certain challenges, but with the help of skilled professionals, you can confidently manage any local requirements. Whether you are starting a new business or planning to expand your current company, our experienced Latvian specialists are ready to develop personalized solutions just for you.
Our team delivers a full range of advisory and BPO services in Latvia to help you handle tax, legal and corporate responsibilities, along with accounting, reporting, payroll and HR tasks. We make sure your operations are efficient, accurate and always in line with Latvian laws and regulations.
Market entry support | Tax advisory and compliance | Legal advisory | Accounting and reporting | Accounting portal | Payroll outsourcing | Payroll portal | Attendance portal | HR administration | Transaction advisory | Transfer pricing | Company registration | Corporate and secretarial services | ESG reporting | Online consulting | Fixed service packages
About Accace
Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. Combining smart and streamlined technology with a holistic approach, we provide an all-round care to clients and consider their matters as our own. With over 800 experts and approximately 2,000 customers, we have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.
About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
