Being a part of the EU, Latvia has a very open economy. Traditional types of craftsmanship, such as woodworking, metalworking, and technical manufacturing, are well developed in the region because Latvia is rich in natural resources. The transport and logistics sectors are also highly popular, along with IT, energy, water, modern food production, and creative industries. Latvia might be a great place to start your own business. The most suitable form for starting your business in Latvia, also the easiest to establish, is a sole trader (individuālā komersanta).
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole trader in Latvia
A sole trader is a natural person conducting business, responsible for their own obligations with the property. To become a sole trader in Latvia, you have to be registered in the Commercial Register. You have an obligation to apply for the registration if you comply with any of the following criteria:
- The annual turnover from the business exceeds € 284,600
- The business complies with the activity of a commercial agent or a broker
- The annual turnover from the business exceeds € 28,500, and you employ more than five employees simultaneously;
You may apply for registration in the Commercial Register, even if you do not comply with all the criteria described above.
Registration process of sole traders in Latvia
- Before you register, you will have to choose your business name. A firm name is a name you will enter in the Commercial Register and used in its commercial activities, in transactions, and when signing. The name has to include a reference to its legal form sole trader (individuālais komersants) or its abbreviation "ST" (IK) at the beginning or in the end. The name must unique and not already registered with the Commercial Register.
- Next, you will have to verify your business address with the State Address Register. You will later need to enter the address.
- After all is set and done, fill the application form KR2.
- To obtain the status of a micro-enterprise taxpayer, note it in the KR2 form, section 8. Along with that, fill out the application for micro-enterprise taxpayer. More information can be found here.
- When submitting the documents, it is necessary to certify the signatures on the application form KR2. It can be done by a notary or online.
- The last step before submitting the documents is paying the fees. There are a number of fees to be paid:
- The State fee - €30,00 (Treasury)
- The fee for publication in the official gazette "Latvijas Vēstnesis" - €18,50 (VSIA Latvijas Vēstnesis)
- Production of a derivative of a document to be submitted - €3,15 (Commercial Register);
- The fee for the submission of the application for registration - €4,00 (only if you're applying in person; Commercial Register)
All the fees have to be paid two days before the submission of the application documents.
- Finally, the application submission can be made. You can do it in three ways:
- In-person, at the Regional department of the Enterprise Register
- Via the e-service, on the Public administration services portal. All documents must be signed with an e-signature.
- By mail; Signed documents, along with fees attached, can be sent to the Commercial Register regional branch.