Quick answer
A Latvian SIA is Latvia’s limited liability company and the form most businesses there use. It needs share capital of at least €2,800, or as little as one cent in the small-capital version, which allows up to five individual shareholders. The register approves a new SIA in one to three working days, and foreigners can own and manage it without living in Latvia.
SIA is short for sabiedrība ar ierobežotu atbildību, the Latvian limited liability company. A Latvian SIA plays the same role as an OÜ in Estonia or a UAB in Lithuania: the owners risk only the money they put in, and the company is a separate legal person that signs contracts, hires staff and pays tax in its own name.
What a Latvian SIA Is
An SIA is a private company: its shares are not traded publicly, and shareholders can be individuals or companies from any country, with no limit on foreign ownership. A management board of one or more individuals runs it, and the shareholders’ meeting takes the big decisions. Board members need no formal qualifications and do not have to live in Latvia; there is no company secretary, and a supervisory council is optional. Latvia’s other limited-liability form, the joint-stock company (AS), needs €35,000 in capital and a mandatory council, so almost every small and medium-sized business is an SIA. Both are governed by the Latvian Commercial Law.
Limited liability protects the shareholders, not automatically the board. A board member who breaches their duties is personally liable for the loss caused to the company, and in an insolvency or a large tax debt the creditors and the State Revenue Service can also turn to the board members personally.
Standard SIA or Small-Capital SIA
Latvian law offers the same company in two sizes. The small-capital version lets people start with almost no money and has become the usual choice: in 2024, close to 80% of newly registered companies were small-capital SIAs or SIAs with a single founder, according to the Ministry of Justice.
| Standard SIA | Small-capital SIA | |
|---|---|---|
| Share capital | €2,800 or more | From €0.01 to €2,799.99 |
| Founders and shareholders | Individuals and companies, any number | Individuals only, up to five |
| Board members | Any individuals | Shareholders only |
| Capital paid before registration | At least half, the rest within a year | In full |
| Mandatory reserve | None | At least 25% of each year’s profit until capital reaches €2,800 |
| State fee | €75, or €225 for one-day review | €20, or €60 for one-day review |
One further limit applies to the small-capital SIA: a person may be a shareholder in only one such company. Accounting and taxes are the same for both, so the choice comes down to the owners and their plans. A small-capital SIA suits one or a few individuals starting small. A standard SIA is needed when a company will be a shareholder or there will be more than five owners. It also makes sense if you plan to pay out profit early, because the mandatory reserve holds back a quarter of it.
How to Register an SIA in Latvia
A Latvian SIA is registered online through the portal of the Register of Enterprises. The founders file a decision on founding, articles of association, a shareholder register, each board member’s consent, a statement on the legal address with the building’s cadastral number, and a declaration of beneficial owners. The address must be real premises, with the owner’s consent if they belong to someone else. Every document must be in Latvian, and a VAT number can be requested in the same application. A single founder who will also be the only board member and beneficial owner can let the system generate every document in a few minutes.
Before filing, the founders open a payment account in the name of the future company at a bank or a licensed payment institution and pay in the share capital, in full for a small-capital SIA and at least half for a standard one. Once the company is registered, that money belongs to it and the board can spend it on the business; nothing has to stay frozen.
Latvia has no scheme like Estonian e-Residency, so signatures are certified either with an EU qualified electronic signature or by a notary, and foreign documents must be legalised and translated. The state fee is paid in the portal, and the register reviews the file within one to three working days, not counting the day of submission. For a founder abroad, collecting signatures, opening the account and translating documents usually stretch the whole process to two to four weeks.
What Running an SIA Involves
Registration is the easy part. Bookkeeping and filings with the State Revenue Service start on the day of registration, not with the first invoice. Since the register and the tax authority work only in Latvian, a local accountant is needed from the first month. The registered address must stay valid, which usually means paying for a lease or an address service. A business account with a Latvian bank often takes longer to open than the company takes to register, so apply early, even if the capital went into a payment institution.
Taxes, Reporting and the Board Member’s Pay
An SIA pays corporate income tax only when it distributes profit: 20% of the gross amount, which equals 25% of what the shareholders actually receive. Profit kept in the company is not taxed. The details, including the alternative regime for companies owned by individuals, are in our article on corporate income tax in Latvia.
VAT registration with the State Revenue Service becomes compulsory once taxable turnover passes €50,000 in a calendar year; registering earlier is allowed. Every SIA files an annual report, and micro and small companies have five months after the financial year end to submit it. The company must also keep its beneficial owner data up to date. The micro-enterprise tax regime is not open to an SIA; it exists only for sole traders and self-employed individuals.
One rule catches many first-time owners. A board member need not receive a salary, but if in a month the company’s turnover exceeds five minimum monthly wages and nobody is paid at least the minimum wage, the tax authority treats the director as earning it and charges income tax and social contributions on that amount. The rule does not apply in the year of registration, but from the second year a growing SIA with an unpaid director needs a plan.
How to Check a Latvian SIA
Before signing with an SIA company from Latvia, look it up in the public register at info.ur.gov.lv. Registration number, address, board, shareholders, beneficial owners and status are shown free of charge. A VAT number can be verified in the EU VIES database. If the status is anything other than active, or the board changed last week, ask questions before paying an invoice.
An SIA in Latvia or a Company in Estonia?
If your customers, staff or premises are in Latvia, an SIA in Latvia is the natural choice, and the small-capital version keeps the start cheap. If you only need an EU company you can run from anywhere, compare the options first.
One point we hear from Latvian clients: the State Revenue Service answers slowly and applies the rules strictly. It is a common reason why Latvians themselves choose an Estonian company even though both countries tax only distributed profit. We do not register Latvian companies, but we set up and maintain Estonian ones for founders from Latvia and elsewhere. See our comparison of Estonia and Latvia and the guide for Latvian residents with an Estonian company, or send us a request.
Frequently Asked Questions
It is the legal form, written in front of the name much as “Ltd” follows a British one. “SIA” tells you the company is a Latvian limited liability company entered in the commercial register, and its letters and invoices show an 11-digit registration number.
Yes. One individual can be the only shareholder and the only board member, in either a standard or a small-capital SIA, and can be of any nationality and live anywhere. This is the most common setup and the one the register’s automatic document service is built for.
Yes. Increase the share capital to €2,800 or more and register the change; the five-shareholder limit, the individuals-only rule and the mandatory reserve then no longer apply.
The seller and buyer sign a transfer agreement, the board updates the register of shareholders and the change is filed with the Register of Enterprises. Unless the articles of association say otherwise, the other shareholders have a right of first refusal, so check the articles before agreeing a price with an outsider.
The shareholders decide to liquidate and appoint a liquidator, the liquidation is announced and creditors get at least one month to submit claims. After debts are paid and a final report goes to the State Revenue Service, the company is struck off. A company that cannot pay its debts goes through insolvency instead.
