LatviaCompany formation, tax and banking
Estonia-style 'no tax until you pay out' rules, with Baltic banks and EU access.
Latvia copied the Estonian model in 2018: company profits aren't taxed until they're paid out, when 20% applies on a 0.8 gross-up basis (worked out as if the payout were 80% of a larger amount). For groups that reinvest, the company becomes a way to grow money inside the EU without tax along the way.
Latvia's banks were cleaned up after the ABLV bank failed in 2018, and they're now much cleaner and much stricter. Business from people living abroad is taken on selectively and with real paperwork, which has done a lot for the country's reputation.
Why people choose Latvia
- No company tax on profits kept in the company
- Payouts taxed at 20% on a grossed-up basis, 25% of what's paid
- No tax kept back on dividends to most countries
- Gains on shares held more than 36 months are mostly exempt
- Stricter, cleaner banks that work well for real, physical businesses
Where Latvia fits
- EU holding companies
- Trading operations
- Reinvestment vehicles
Where Latvia fits in a structure
Typical role · EU trading or holding company that reinvests
The Latvian company trades or holds shares inside the EU and keeps its profits working. Nothing is taxed while profits stay in the company; when they're paid out, tax works out at 25% of the amount actually paid. It relies on being managed and controlled in Latvia, ideally with real operations, staff or clients there.
What it depends onThe tax office actively challenges companies run from abroad, banks mostly turn away shell companies owned from abroad, and shareholders and real owners are public on the Enterprise Register.
A simplified picture to explain the idea, not a recommendation. General information, not tax or legal advice.
Opening a bank account
Swedbank, SEB and Citadele dominate business banking. Since the reforms, shell companies owned from abroad are mostly turned away; companies with Latvian operations, staff or clients open accounts normally. EU payment firms cover businesses that only trade across borders.
How tax works here
0% company tax on profits kept in the company. Payouts are taxed at 20% on a grossed-up basis (20/80), which works out at 25% of the amount actually paid. No tax kept back on dividends to most countries. Gains on selling shares held for more than 36 months are mostly exempt.
Real presence, and who can see the owners
Company information, including shareholders and real owners, is public on the Latvian Enterprise Register — one of the most open in Europe. A company is taxed where it's managed and controlled, and the tax office actively challenges companies run from abroad.
When to choose it
Choose Latvia for an EU trading or holding company that reinvests its profits, especially where Baltic or nearby trade routes matter and you're comfortable with owners' names being public.
You get a written comparison, not a sales pitch.
Every Latvia recommendation comes as a written comparison with the alternatives — whether the setup will stand up to scrutiny, how easy banking will be, which tax treaties apply, who can see the owners, what it costs to run each year and the risk to your reputation — so you can see the trade-offs before you commit.
Considering Latvia? Get a written comparison first.
Answer six questions and our team will come back with a shortlist, rough costs and where you could bank.
Questions we hear on every Latvia intake.
- How does Latvia differ from Estonia?
- Both only tax profits when they're paid out. Latvia's rate on payouts works out slightly higher; Estonia is better online and has e-Residency. Latvia's banks are stronger for real, physical businesses.
- Is Latvian banking safe after the ABLV collapse?
- Yes. The sector was restructured under European Central Bank and MONEYVAL supervision and shell-company business from abroad was mostly removed, which is why standards are now high.
- Are Latvian company owners public?
- Yes. Shareholders, directors and real owners can be searched publicly on the Enterprise Register.
What we typically deliver in Latvia
Corporate Structuring
Groups of companies across several countries: holding companies, companies that own your IP, joint-venture companies, and moving a company to a new country.
BankingInternational Banking
Personal introductions to 25+ private and business banks that are actively taking clients — UK, EU, Gulf, Asia, Caribbean, US.
StructuresOffshore & Onshore Company Formation
We set up companies in the BVI, Cayman, the UAE, Singapore, the UK, Delaware and 55 more places — ready for a bank account, with proof that the company is genuinely run where it's registered.
ComplianceFiduciary & Compliance
Independent directors, anti-money-laundering procedures, proof of real presence, and the day-to-day admin that keeps companies in good standing.
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