WORK IN LATVIA

BANKING MONEY AND TAXES

Latvia is an attractive financial and trading centre to facilitate business operations in this region, due to its location between CIS and Western countries and membership in European Union. The country has highly sophisticated banking system within Eastern Europe.

Banking in Latvia

Latvia said its banking system operations in Euros have been stable and smooth since entering the euro zone and became the bloc's 18th member early Wednesday.Dace Kalsone, a finance ministry official in charge of the euro adoption project, told a press conference that the banking system, including ATM, credit card terminals, and Internet banking, went smoothly in the country's adoption of the euro. Residents can easily swap currencies through the country's banking system, and failure in banking services was not observed, the official said. The whole process of transition of the national currency from Latvian lat to euro will take half a month, and during this dual currency circulation period prices will be indicated in both currencies.

Opening a bank account

There are a number of banks in Latvia, but the main players, and the banks with the most branches are SEB (Swedish), Swedbank (Swedish), DNB (Norwegian), Nordea (Nordic) andCitadele (Latvian). The first thing to take note of is where your nearest branch is, and the bank machines nearby which you are likely to use. Some machines will charge you if you don't do you're banking with that particular bank or its partners.For those in Riga; your likely choice is going to be Swedbank, SEB or DNB. Those three seem to have the largest spread of branches in the city, and Swedbank in particular have quite a presence, with their prominent skyscraper across the Vanšu Bridge from Riga's old town. Most banks in the centre of town will have English speaking assistants. The closer to the old town you are, the more likely that is.

Documents required for legal entities:

  • Original company incorporation documents, including e.g. Incorporation Certificate, Articles of Association, Bylaws etc.
  • Documents, confirming the authority to open and manage company account e.g. a Power of Attorney, Extract from the Enterprise Register, Resolution, and Minutes etc.
  • ID documents: a valid passport or National ID card.
  • Documents, confirming the beneficial ownership.
  • For companies incorporated more than a year ago: Certificate of Good Standing, certified by the Apostille.
For companies incorporated outside Latvia, the information concerning the Apostille, legalization and notary certification of the company documents, is accepted and analyzed on the individual basis depending on the jurisdiction.

TAXES IN LATVIA

The Law on Taxes and Duties, adopted on 2 February 1995, determines Latvia's general taxation principles. This law is applicable generally, unless specific tax laws, such as the Law on Value Added Tax, Law on Corporate Income Tax or any other provide for different rules. If there is a conflict between general principles and specific rules, the specific rules prevail. According to the Law on Taxes and Duties, duties are imposed either by the State or the municipality. The State is entitled to impose duties on a number of different items. These include vehicles, court applications, notary applications, gambling, changes of identification data, and reservation of land in rural areas, transactions with vouchers and bills of exchange, immigration services, business licences/permits, registration of security interests, applications for patents, trademarks or plant protection certificates.

PERSONAL INCOME TAX

Tax payers
Latvian personal income tax payers are Latvian tax residents and non-residents for tax purposes.Pursuant to Latvian legislation, persons are considered to be residents of Latvia for tax purposes, if:

  • Their permanent place of residence is Latvia or
  • They reside in Latvia for 183 days or longer in any given 12-month period commencing or finishing during a taxation year or
  • They are citizens of the Republic of Latvia employed abroad by the Latvian government
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