Starting a business in
🇱🇻Latvia
Checked November 4, 2026 · How we score
Corporate tax
20%
Top income tax
33%
Setup from
$1,000
all-in, first year
Time to form
5 days
can be done remotely
Taxes in Latvia
| Corporate income tax | 20% 0% on retained and reinvested profit; 20% on distributed profit (calculated on the gross amount, i.e. 20/80 of the net dividend). From 2026 companies owned only by individuals can opt for 15% CIT plus 6% PIT withholding on dividends (combined about 21%). |
|---|---|
| Personal income tax (top) | 33% 25.5% up to EUR 105,300 and 33% above; an additional 3% applies to total annual income above EUR 200,000 (first applied in 2026 for tax year 2025). Wage-linked rates differ from earlier years; confirm with the SRS. |
| Tax system | Worldwide income |
| Capital gains tax | 25.5%Capital income and gains are taxed at 25.5% (cryptocurrency results must be netted separately). |
| Dividend withholding (non-residents) | 0% |
| VAT / GST | 21% |
| Social security | Employee about 10.5%, employer about 23.59% (VSAOI) with an income cap. No WHT on dividends to non-residents except those in low-tax jurisdictions (20%). |
Forming a company in Latvia
| Usual entity | SIA (limited liability company) |
|---|---|
| Minimum capital | $3,200 |
| Setup cost (all-in) | $1,000–$2,800 |
| Annual running cost | $1,600–$4,000 |
| Time to incorporate | 5 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | No |
| Business banking for non-residents | Hard |
Residency and visas
Digital nomad visa needs about EUR 2,850 monthly income and a remote employer or clients abroad. Business-based permits require a Latvian company with employees. The real-estate investor permit has been restricted in recent years.
| Digital nomad visa | Latvia Digital Nomad Visa, $3,300/month income |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 3/5 (1 = easiest) |
Special tax regimes
Distributed-profit CIT (Estonian model)
No corporate tax until profit is paid out; 20% (gross) on distribution.
Alternative 15% CIT + 6% PIT regime (2026)
Individual-owned companies can pay 15% CIT on the gross-up and have 6% PIT withheld on dividends.
Micro-enterprise tax
Simplified tax on turnover for very small businesses (limits apply); check current rate.
Pros and cons
Why founders pick Latvia
- 0% tax on retained profit
- Optional 15% + 6% regime from 2026
- Lower costs than Western Europe
- EU and euro member with a digital economy
Watch out for
- High personal income tax of 25.5%/33% (+3%) for residents
- Latvian banks apply strict AML scrutiny to non-residents
- Minimum capital of EUR 2,800 for a SIA
- Smaller startup ecosystem than Estonia
- Rates changed in 2025–2026; check current legislation
Best for: Companies reinvesting profit (Estonian-style CIT) · Founders targeting the Baltics and Nordics · Fintech and logistics companies
Latvia: common questions
How does corporate tax work in Latvia?
A company pays no CIT until it distributes profit; when it does, 20% is charged on the gross amount (20/80 of the net dividend). From 2026 individual-owned companies may opt for 15% CIT and 6% PIT on dividends.
Can a foreigner open a company in Latvia?
Yes. A non-resident can register an SIA with the Enterprise Register in about 1–3 days using a qualified e-signature or a notary with a power of attorney. Minimum capital is EUR 2,800 (a EUR 1 capital option exists with restrictions), and you need a Latvian legal address.
What is the personal income tax in Latvia?
25.5% up to EUR 105,300 and 33% above, plus an additional 3% on total annual income above EUR 200,000. Capital gains and interest are taxed at 25.5%.
Does Latvia have a digital nomad visa?
Yes, for non-EU remote workers earning about EUR 2,850 per month. It is valid for one year and renewable, but does not itself decide tax residency.
Is Latvia better than Estonia for a company?
Both tax only distributed profit at 20%. Estonia has better digital infrastructure and e-Residency; Latvia has lower start-up capital for some structures but fewer remote services and stricter banks.
Sources
- State Revenue Service of Latvia (VID)
- Register of Enterprises of Latvia
- PwC Worldwide Tax Summaries – Latvia
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.