Latvia, Legal Counsel, Legislation, Markets and Companies
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Friday, 11.10.2024, 21:04
Holding companies in Latvia
When choosing a country to create a holding
organization, it is necessary to take into account a valid income tax imposed
on companies. After some amendments of the law On Enterprise Income Tax were made in 2013, holding companies in
Latvia began to develop faster than ever. Comfortable conditions for business
sector had been made; as a result, additional investments were attracted.
It’s necessary to bear in mind, that since 1st
of January 2018 the new Enterprise Income
Tax Law came into force, which also regulates activities of holdings
companies in Latvia. That’s why it is crucial to know about recent changes in
legislation. Law firm INLAT PLUS international
lawyers will help you in organizing a holding structure in view of valid regulation.
For what purposes
holding companies are created?
Holding company is created to effectively
administrate a group of companies in order to:
● Keep an accounting system of mutual
parts of authorized capital;
● Optimize financial flow of
subsidiary companies;
● Financially support subsidiary
companies;
● Expand market and increase
capitalization;
● Attract loan capital on best
conditions.
Tax privileges for
holding companies in Latvia
Due to ES jurisdiction, favorable conditions of
organizing a holding company will give an opportunity for entrepreneurs to decrease
taxes for selling authorized capital parts of subsidiary companies by the
amount of earnings. Income tax for dividends also can be decreased by the
amount of obtained dividends from VAT taxable person in another country. There
is also a government-supported financial support for companies connected to
agriculture – income taxes for receiving support are only 50% of the amount. Latvia
also signed conventions for the avoidance of double taxation with more than 50
countries, including Russia, Belarus, Ukraine, United Kingdom, USA and others.
To register a holding
company in Latvia you need to keep in mind these factors:
● A number of founders and
shareholders is unlimited;
● An authorized capital of a company
can be minimal;
● A director of a holding structure
can be resident or non-resident of Latvia;
● Holding structure can be registered
in Latvia in a week.
It also should be noted that Latvian
legislation is under EU jurisdiction, that’s why there are no limits on
shareholder’s country of residence, doing business with private persons, buying
licenses and other business activities connected to managing holding organization.
What makes Latvia so
attractive for holding company registration?
In contrast to other countries, Latvia has lots
of advantages in terms of holding registration:
● Latvia’s advantageous geographic
location gives opportunity for partnership with EU counties, as well as Russia
and Commonwealth of Independent States;
● Advanced transport and
telecommunication infrastructure;
● Favorable investment climate;
● Popularity of Russian and English
language in Latvia;
● EU jurisdiction and euro as national currency;
● Low-cost specialists of high
qualification;
● Advanced banking sector;
● Low-cost registration and managing a
holding organization;
● Financial privileges for holding
development.
For holding company registration in Latvia it
is important to have legal support in order to avoid needless expenses and use
privileges granted by law. Law firm INLAT
PLUS international will provide necessary legal support and help to solve
all problems with registration.
Contact information
In order to get a consultation and additional
information you can contact us by phone, email or coming to our INLAT PLUS international office:
Office phone number: (+371) 672 997 76
Mobile phone number: (+371) 296 216 15
E-mail: [email protected]
Address: Krišjāņa Valdemāra iela 38-612, Riga,
Latvia