Holding companies in Latvia
Holdings Latvijā, Photo by krakenimages on Unsplash
Building a holding structure in Latvia is a great way to expand and develop your business. The main goal of creating a holding company is to unite a group of companies in order to administrate a mutual financial flow and assets. Thus, you can grow your market place, increase capitalization and the value of your company.
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.
In order to get a consultation and additional information you can contact us by phone, email or coming to our INLAT PLUS international office:
Mobile phone number: (+371) 296 216 15
Address: Lāčplēša iela 41, 2.stāvs, Rīga, Latvija, LV-1011