Comparison of business types in Latvia - Company Registration Latvia (2024)

In Latvia, there are different ways to run a business. The main things that make them different are the amount of equity, the liability of the company, and how profits are shared. This means that businesses are put into groups based on how they are different.

Legal Person

In every business, there is a legal person. The limited liability company (SIA) with reduced equity, the joint-stock company (AS), and the individual merchant are the legal entities involved (IK).

Number of Owners

The numbers of owners of companies in all the types of businesses include

1. Limited liability Company (SIA) with 1 or more
2. Limited liability Company (SIA) with reduced equity 1 to 5
3. Joint-stock company (AS) with 1or more
4. Individual merchants (IK) have only 1 natural person

A legal person & Non-resident are considered to be owners of

1. Limited liability company (SIA)
2. Limited liability company (SIA) with reduced equity
3. Joint-stock company (AS)
4. Individual merchant (IK)

Equity

The equity of each of these company are as follow

1. Limited liability company (SIA) is ≥ 2800 EUR
2. Limited liability company (SIA) with reduced equity ≥ 1 EUR
3. Joint-stock company (AS) ≥ 35 000 EUR
4. Individual merchants (IK) do not measure their equity.

Annual turnover

The annual turnover of the companies is:

Limited liability company (SIA)

Limited liability company (SIA) with reduced equity <40 000 EUR

Joint-stock company (AS)

Individual merchant (IK) – ≥ 284 600 or ≥ 28 500 and ≥ 5 employees

Property Ownership

The owner is liable to own property most especially/

Individual merchant (IK)

Vat payer

1. Limited liability company (SIA)
2. Limited liability company (SIA) with reduced equity
3. Joint-stock company (AS)
4. Individual merchant (IK)

The following companies are Subject to corporate income tax:

1. Limited liability company (SIA)
2. Limited liability company (SIA) with reduced equity
3. Joint-stock company (AS)

Subject to personal income Tax and MSSIC

Individual merchant (IK)

May pay micro-enterprise tax

1. Limited liability company (SIA)
2. Limited liability company (SIA) with reduced equity
3. Individual merchant (IK)

Profit distribution

1. Limited liability company (SIA): a part is paid as dividends
2. Limited liability company (SIA) with reduced equity: a part is paid as dividends
3. Joint-stock company (AS): a part is paid as dividends
4. Individual merchant (IK): the owner retains the entire profit

Management

Each of the companies is managed as follows:

1. A limited liability company (SIA) is managed by shareholders’ meetings and the board
2. A limited liability company (SIA) with reduced equity is managed by shareholders’ meetings and the board
3. Joint-stock company (AS) is managed by shareholders’ meetings, the council, and the board
4. Individual merchant (IK) is managed by the owner who takes decisions unilaterally.

State fee for registration

The state fee registration for each company is as follows

1. Limited liability company (SIA) is 150,00 EUR
2. A limited liability company (SIA) with reduced equity is 20,00 EUR
3. Joint-stock company (AS) is 350,00 EUR
4. Individual merchant (IK) is 30,00 EUR