Registering a business in the Baltic States is a cost-effective option for you. This article provides the information on the general structure of entrepreneurial activity in the Baltic countries.
To establish a commercial enterprise in Latvia. A general information about the country:
- A North European state;
- Neighbors are: Estonia, Belarus, Lithuania and the Russian Federation;
- It is washed by the Baltic Sea;
- Latvia is divided into 110 municipalities, 9 cities;
- The main administrative center is Riga;
- The national language is Latvian;
- Euro (EUR) is the national currency.
- Transport, information technology, financial services contribute to the rapid growth of the economy;
- The construction, woodworking, food, light industries and tourism are developing rapidly;
- The official language of documents is Latvian.
Form of incorporation of companies:
- a SIA (an analogue of LLC) is the most popular type;
- an individual entrepreneur;
- the AO;
- a partnership;
- a representation.
Our experts will provide recommendations on registering a legal entity in Latvia.
- The equity is divided into shares.
- Shareholders are not personally liable for obligations of the company.
- A Board of Directors is required;
To open a Latvian LLC:
- A registered capital up to 2800 euros;
- Sharers are responsible for the missing capital;
- Founders are only individuals; their maximum number is 5;
- The company must invest 25% of its income each year, so that the share capital is closer to 2800 euros.
- An initial contribution is half an authorized capital, a balance is paid during the year.
Latvian taxation for microenterprises:
- If an annual income is less than 100,000 euros, then a rate of turnover is 15%.
- Startups with the authorized fund of 30,000 euros receive a government support for 5 years, after a registration.
- SIA tax number is required (it matches the registry number, but with the prefix “LV”).
- If there are activities carried out outside Latvia, then a VAT is not paid in this country. Businesses in the territory of this jurisdiction are taxable at a rate of 21%.
- A retained corporate income is not subject to a VAT. Exceptions apply to capital gains, shares, securities. A sale of real estate by non-residents is not included in a list of exceptions. This tax regime is available for permanent missions, resident enterprises, residents.
- Resident companies are subject to an income tax (25%) in this.
Lawyers of IQD Consulting will prepare draft documents for founders of legal entities, including foreign parent companies, who wish to establish branches in Latvia.
To register a company in Lithuania
- This country is a member of the EU, a Schengen Agreement, this contributes to a development of a favorable fiscal policy;
- A well-trained workforce, a rich infrastructure and natural resources, the application of special economic measures for technological investors increase an interest to this country.
Legal forms of enterprises in Lithuania:
- an Individual Entrepreneur;
- a Public LLC;
- a Private LLC;
- a Full Partnership;
- an LLP.
Advantages of legal forms:
- Registering a Lithuanian PLC (UAB) is a successful option for small/medium-sized businesses. It provides high profits with minimal registration requirements. The liability of founders is limited by their contributions. The maximum number of shareholders is 249. Shareholder meetings are required.
- Lithuanian LLC is typical for large organizations, whose capital is from 40,000 euros. There is no maximum number of shareholders. Shares may be registered in the stock market. Members’ liability is limited to their contributions. Meetings of shareholders and the Board of Directors are required.
- The simplest form of Lithuanian business is a Sole Ownership, which is formed by 1 entrepreneur.
- A Full Partnership consists of at least two entrepreneurs. A shareholder liability is not limited. In the event of bankruptcy, participants’ personal assets are not protected.
- The General Partner is fully responsible for actions of the organization. The liability of a limited partner depends on the contribution.
Legal forms for a foreign organization:
- a subsidiary is an independent organization, may be registered as LLC;
- the branch depends on the parent company;
- a representative office serves as a communication channel between the parent company and clients/partners in Lithuania.
Request a personal consultation on registering a company in Lithuania, and experienced IQD Consulting lawyers will help you to choose the type of organization.
To open a commercial enterprise in Lithuania. Steps:
- a registration/verification of a unique name of the enterprise;
- a certification of constituent documents, a certificate, confirming a bank deposit;
- the Board of Directors should register with the State Tax Inspectorate, a Council of a State Social Insurance Fund;
- to open a corporate account in Lithuanian bank;
- to get a seal.
Lithuanian tax policy
- an income tax is 15%;
- a VAT is 21%.
- Documents must be notarized in Lithuanian (if necessary, they can be stored in two languages).
Lawyers of IQD Consulting will provide related services at all stages of setting up a company in the Republic of Lithuania.
To open a business enterprise in Estonia. Advantages of the country:
- a liberal business environment;
- EU membership;
- a calm environment for an international community.
Thanks to these and other features, a country is actively attracting investors, who can order professional legal advice on registering commercial organizations in Estonia.
- a Public LLC (AS):
- Obligations of founders are limited by the amount of a paid-up share capital.
- A public share capital is EUR 25,500 with a minimum par value of EUR 1.
- Founders must be registered in a Central Register of Securities, they are not liable for obligations.
- A Supervisory Board is required (organizes a management).
- A local office is required.
- a PLC
- To open a PLC in Estonia for foreign investors, you should join the e-residency program.
- A minimum authorized fund is 2550 euros, a minimum nominal value is 1 euro.
- Shareholders are not individually liable.
- Board of Directors is required.
- A registered office is recommended.
A legal environment for those, who decide to register a company in Estonia
- It offers a liberal foreign trade regime without tariff barriers.
- Estonian kroon (EEK) is pegged to a euro, it is fully convertible.
- A free repatriation of a capital and income.
- There is no currency control.
- An amount of a foreign capital is not limited.
- 100% foreign ownership.
A value added tax
A tax is managed by the Estonian Tax and Customs Board. For shipments worth more than 16,000 euros, the company must register to pay a VAT.
- A basic VAT rate is 20%, a reduced is 9%;
- A corporate tax is 20%;
- A financial report/audit are required.
We provide assistance in choosing a taxation system and registering an enterprise with the state fiscal service.
How to register a company in the Baltic States?
If you plan to establish an enterprise in the Baltic countries, contact IQD Consulting. Our lawyers will provide business registration services and help in opening an account in the Baltic countries.