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Practically the best option is investment in Latvian real estates. In the case of investment in real estate the provisions differ and foreigner only has to pay real estate tax. In addition, it is not mandatory actually to live in Latvia, so the property might be leased and hence the return of investment is possible.
Foreigners usually choose to receive a residence permit by purchasing a real estate (apartment) in Latvia. Frequently the apartment is bought as a joint purchase, especially in cases of family with over 18 year-old children. Latvian Migration Law provides that spouse and juvenile children (children under 18 years) are entitled to residence permit along with the main investor and they do not have to make any additional investment.
The process of obtaining residence permit is relatively complicated and requires knowledge of local legal and procedural matters. Baltic Legal lawyers are experienced in the field and will provide constructive consultations in order to choose best way of investment, as well as take care of preparing all necessary documents before submitting them into Migration Office of Latvia.
What are conditions to obtain residence permit in Latvia through investments in real estates? In order to apply for temporal residence permit in Latvia the foreigner can buy a real estate, for example, an apartment in the city, summer dwelling house near by the seaside, house in the country side, etc.
The investment must fulfil following conditions:appartments in Latvia
the total amount of transactions must be at least EUR 250,000 and total official cadastral value must be at least EUR 80,000; transaction must be realized only through bank transfer; the foreigner does not have and has never had real estate tax debts; the transaction is concluded after 1st September 2014; real estate acquired from a legal person registered in the Republic of Latvia or a natural person who is a Latvian citizen, Latvian non-citizen, citizen of the European Union; real estate registered on foreigner in the Land Register of Latvia. If you are interested in immigration, visit this webpage to find out the necessary documents for application.
If you need guidance on immigration issues or practical opinion on the case, please send us an e-mail (See our contact page). We always appreciate respect and helpful advice, so we will answer you as soon as possible!
Remember, Baltic Legal mission is to assist in the whole process. We can arrange a professional help to find a real estate which suits your needs, as well as prepare the necessary documentation to submit with state authorities. If you are interested in buying an apartment or house in Latvia, probably you would like to arrange a visit first. We will provide the list of necessary documents and information for the invitation request, as well as the place where the client could receive short term visa. In other way, we can act on your behalf under Power of Attorney and settle all formalities without your presence; though on some stages your personal presence will be mandatory.
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Cyprus is currently experiencing economic challenges. Cyprus has taken an international loan of 10 billion euros, mainly to recapitalise its banks, which have been crippled by exposure to crisis-stricken Greece.
Cyprus government has adopted a law that provides taxation of the banks existing deposits over 100 000 euros with one-off tax. Such a move for Cyprus threatens with cash outflow from the state.
From an expert point of view, this situation is beneficial for Latvian credit institutions, especially for those who work with clients from Russia and the CIS. Latvian banks are currently characterized by an influx of depositors.
Depositors and investors choose Latvia because of its taxation policy, favourable tax system, a high level of confidentiality and flexible attitude to financial resources transit. Latvian banks are safe alternative to offshore to store money.
The advantages of Latvian business environment are open markets, resources that are not available elsewhere (land, timber, low labour costs) business culture and mentality, which is close to the European dimension.
Foreign investors also evaluate the experience, noting a number of advantages as business projects, which before attracting investments had made good progress. They point out that Latvia have long traditions of production.
Latvia or Cyprus? The main differences, important for any entrepreneur, who has not decided yet – Latvia or Cyprus.
Latvia is located in Europe, Cyprus is located in Asia. Latvia has an advantageous geographic location close to the former Soviet markets, such as Russia and Ukraine, at the same time- it is part of the European market. Cyprus is a member of Eurozone, Latvia will join Eurozone in 2014. Latvian financial sector does not constitute a basic profit of GDP, as opposed to Cyprus. It points that Latvia is economically more stable. Latvia has a high level of Russian language. The Latvian banking sector has experience working with clients from the former Soviet Union, and the banks are willing to work using Russian language. Starting of 1st January 2013, the dividends are not taxable income in Latvia, if the company – Latvian resident pay out dividends to the non-resident unless it is located, established or founded in low tax or no-tax states or territories. Also, dividends received from the non-resident are not taxable unless it is located, established or founded in low tax or no-tax states or territories. Latvia has concluded a convention with Russia of double non-taxation. This convention significantly reduces the tax burden for entrepreneurs based on Latvia or Russia. Latvia increased its attractiveness for foreign depositors by passing a law in 2009 allowing anyone who invests 100,000 lats (€144,150, or in other specific cases €70,000) to get a residency permit. Residency permit allows them to move more freely around the EU. While Cyprus has professional bankers as well as Latvia has, in Latvia bank services are more cheaply and also companies can be purchased cheaply. Latvia is ranked as 25 in Doingbusiness. Cyprus is ranked as 36 in Doingbusiness. This survey points out that in Latvia is more easy deal with issues such as- Registering Property, Getting Electricity, Getting Credit, Enforcing Contracts and Resolving Insolvency, also Trading Across Borders. Latvia is in upper middle income category. Cyprus is in high income category. That points out lower labour costs in Latvia. Entrepreneurs, which already have chosen Latvia underlines that it is fair, transparent and with a proper legal system.
According to official figures, around half of the EUR 17 billion worth of deposits in Latvian banks come from non-residents, and they grew by more than 20% in 2012. According to the International Monetary Fund (IMF), up to 90% of that comes from Russia and other CIS states.
In the same way, there is no truth in statements that Latvia could become Cyprus number two and will experience such economic challenges because of banking sector as the size of both countries financial sectors and their significance to the economy are very different.
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Any person may apply for a residence permit in Latvia as long as it is based on one of the legally valid reasons for requesting a residence permit. Basically a residence permit is needed if you wish to reside in the Republic of Latvia for a period of time exceeding 90 days within half a year as from the first day of entry. In the absence of other reasons entitling to a foreigner to a residence permit under the law, a foreign national may apply for the residence permit in Latvia on the grounds of business and investment:
Residence permit based on investment in real estate, for example, purchase of an apartment or a plot of land. Read residence permit based on investment in real estate Residence permit based on the investment in subordinated capital of a credit institution. Read residence permit based on bank deposit Residence permit based on investment in the share capital of a company in the status of a shareholder, for example, company formation and registration or acceding to an existing company with a significant investment. Read residence permit based on business investment Residence permit for a company executive, for example, a Managing Director, Chief Executive Officer, Board Member, Proxy (read more) See next entry - How to apply?
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Latvia is a country in Eastern Europe and one of the Baltic countries - the three countries located on the eastern coast of the Baltic Sea: Latvia, Lithuania and Estonia. In the past, Latvia has been a part of numerous other political entities, including the Old Livonia, the Polish-Lithuanian Commonwealth, The Russian Empire and the USSR. Eventually, the country achieved its independence in 1991.
Since the 13th century Latvia has been an important trading hub and a bridge between the Eastern Europe and the rest of the continent, also being a major member of the Hanseatic League, dominating the Baltic sea maritime trade up until the 16th century. Nowadays Latvia is a market in its own right and an important economic player in the Baltic region.
Economy In the last decades Latvia has enacted a number of reforms to support trade and the domestic market, and they turned out to be successful, making the business environment better. The amount of foreign investments and domestic consumption has increased over this time (except for a setback during the crisis of 2008 - 2009), which shows that both Latvian residents and foreign investors place their trust in the current economic environment of Latvia.
The crisis of 2008 - 2009 mentioned previously was heavily influenced the economy of Latvia, as it did in many other countries. There was a drop in GDP of 17% and a peak of unemployment of 17% (more than 20% by some estimates), and the situation has reached its worst in 2010, just in the aftermath of the crisis. The economy entered the phase of contraction, during which the so-called shadow economy or underground/unofficial economy took up approximately 40% of all the Latvian economy.
From 2010 to 2012 Latvia has been implementing various economic reforms and projects in order to restore the damage economy. Eventually, with the help of international funds, the country announced in 2012 that the economy is steadily growing again. This claim was also approved by the International Monetary Fund (IMF). The GDP, export and domestic consumption grew, and unemployment declined to about 9.5% in 2016 (almost twice as low compared to the crisis period).
Economy sectors Traditionally, there are four economic sector: agriculture (including mining and together extraction of natural resources), industry and manufacturing, services, and informational technologies (and other knowledge-based areas). Latvia, along with the majority of the world's most developed countries, is reliant on the tertiary and the quaternary sectors, namely services and knowledge-based industries.
Agriculture in Latvia The agricultural sector takes up 4% of Latvia's GDP and provides jobs to approximately 7.7% of the population. The major industries within the agricultural sector is grain production, cattle, potatoes, sugar beets and other vegetables. The main agricultural export product is timber, as Latvia is abundant with forests, and the forestry industry is generally well developed in the country. Other than that, however, Latvia's resources are scarce are thus not very developed. This particularly concerns energy-related resources - these and their products are mainly imported from abroad.
Industry in Latvia The industrial sector is the second most developed economy sector in Latvia. It contributes 24% of the country's GDP, and approximately 28% of the working population is employed in the sector. The most developed industries within are metalworking, food processing and construction, Lately, the high-tech industry also undergoes a significant development, and, although not a major branch right now, this area is expected to become a major contributor to Latvian economy.
Services in Latvia Services, such as market entry legal support, and knowledge-based industries, such as internet technologies, are the primary economic sectors of Latvia. They take up approximately 72% of the GDP, and more than 63% of Latvians are employed in the sector. Specialists of the country are especially proficient in legal services and internet technologies, as well as a number of other industries.
International relations Latvia is an active international player, being a member of the EU, the United Nations, WTO (World Trade Organization). OECD (Organisation for Economic Co-operation and Development) and many other economical and political organizations. Latvia is located near Lithuania, Estonia, Belarus, Russia and Scandinavian countries (especially Sweden and Finland). The country maintains active economical and trade relationships with most of them, making international trade from Latvia an advantageous undertaking.
Foreign Direct Investment Since 2004, when Latvia joined the European Union, the flow of Foreign Direct Investments (FDI) has increased significantly. Besides that, the majority of FDI comes from reinvestments and merger-acquisition operations. Looking at the industries of the FDI, the main ones are made in telecommunications, real estate, banking and retailing.
The amount of FDI dropped somewhat during the crisis of 2008 - 2009, but since the period of economic revival (around 2010) they have increased again. Out of all the foreign investors, the biggest ones are Estonia, Denmark, Sweden and Germany. The government of Latvia especially promotes investments in high tech industry, which further strengthens the positions of this developing area of business.
Foreign Trade Foreign trade is one of the major contributors to Latvian GDP - its share is approximately 80%. Latvia exports a number of agricultural and resource extraction products (timber, oil, iron, coal), as well as electronic equipment and metalworking products. Latvia mainly exports to Lithuania, Estonia and Germany.
As for the import, Latvia mainly buys machinery, chemicals, fossil fuel, electricity and vehicles. The main import partners are Lithuania, Russia, Scandinavian countries (particularly Finland and Sweden), as well as Poland, Germany and Estonia.
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Centre of Registers and Information Systems (RIK) RIK is a state agency operating under the authority of the Ministry of Justice.
The main purpose of RIK is to ensure an innovative and integrated environment of e-services for more efficient implementation of public administration and application of laws and jurisdiction. RIK is one of the largest IT organisations in Estonia.
It develops and manages different registers and information systems. Among these are the Commercial Register, e-Notary, Land Register and information systems of other areas (the court information system, e-Files etc.). There are around 50 registers under the RIK's supervision.
The Commercial Register of Estonia(a place for company registration in Estonia) operates since 1 September 1995.
The portal of the Commercial Register of Estonia is considered unique in Europe because of the fast and convenient establishment of companies that it ensures. For example, it is possible to register a limited liability company in just a few hours by using an ID-card without even leaving one's house. In addition, apart from searching for companies, the portal of companies can be also used to modify the registration details of a company and to submit annual reports electronically.
The Commercial Register of Estonia provides the following services.
Company Registration Portal (CReP - online site for company formation in Estonia) It is a portal for entrepreneurs by the help of which it is possible to contact registration departments of courts, as well as for the Central Commercial Register so it can perform different duties in this portal.
In this portal, entrepreneurs may submit an entry application, a list of members of a supervisory board with their personal details and relevant modifications, contact details, information on relevant modifications and annual reports.
Residents of Estonia may access the portal by using an ID-card, Mobile-ID or by authenticating through an internet bank.
Residents of Portugal, Finland and Belgium may access the portal by using an ID-card, but citizens of Lithuania - by using a Mobile-ID.
Information system - the Central Commercial Register It is an online service provided by the Centre of Registers and Information Systems, and this register is based on the database of the registration departments of courts.
This central database comprises digital data from the Commercial Register, Register of Non-profit Associations and Foundations and the Commercial Pledge Register. It is a paid service with a monthly subscription fee of EUR 10 plus the inquiry fee.
By paying the subscription fee, a person can access the information included in the Land Register, Trade Register, Register of Non-profit Associations and Foundations and Commercial Pledge Register.
A Value Added Tax (VAT) payment is added to the service fee. In their turn, users of the Commercial Register can search for information on their related companies, non-governmental organisations and foundations for free.
In order to access this information, a user has to get authorised with an ID-card.
European Business Register (EBR) It is an online service joining together 24 national business registers in Europe.
This information system is available in English, and thus ensures easy access for most of interested persons.
The service offers searching for companies, information on companies and their profiles. Furthermore, some of the countries provide extensive information on companies, such as annual reports, articles of association, balance sheets, profit and loss statements, extracts from the Trade Register and information on annual profit.
In order to become a user of this service, a contract has to be signed with a service provider from the respective country. The fee for viewing a profile of an Estonian company is EUR 2.75, for viewing its annual report - EUR 6.50, but for viewing its financial data - EUR 12.50.
The most popular forms of enterprise in Estonia are the following:
joint stock company; limited liability company. It is also possible to register the following forms of enterprise: general partnership; foundation; non-governmental organisation; trade association; limited partnership; branch of a foreign company.
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Gibraltar is one of the British Overseas Territories we recommend for an offshore company. Gibraltar is located on the southern end of the Iberian Peninsula on the Mediterranean. Gibraltar is known for its rock with a densely populated city area on the foot of the rock. Official language of Gibraltar is English, but Spanish and Llanito are also widely spoken.
Company information The type of company is Non Resident, meaning that the director of the company doesn't need to be local, the board meetings and shareholder meetings must be held within Gibraltar. The key corporate features in Gibraltar:
Company formation (registration process in Gibraltar takes around 5-8 days Minimal share capital of 1.21 EUR, and usual authorised share capital of 2,420 EUR At least one director and one shareholder are required A local qualified company secretary is required. Filed accounts are not publicly available An office must be maintained within Gibraltar Company formation To maintain a Non Resident company in Gibraltar the following is required:
filing annual returns preparing and filing accounts a minimum annual license fee of 55 EUR Tax system Gibraltar does not have Double Taxation Treaties with any country and has no corporate tax. Only the annual license fee has to be paid. Also there is no wealth tax, Capital Gains Tax, gift tax or Value Added Tax in Gibraltar.
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According to Latvian Immigration Law, a foreigner has the right to request a temporary residence permit in accordance for the time period of studies of educational establishments accredited in the Republic of Latvia or full-time students.
Under Latvian Immigration Law, a residence permit gives a foreigner the right to reside in the Republic of Latvia for a specified time period, for example, students may reside in Latvia for the time period of studies.
Visa certifies that a person has requested an authorisation to enter and reside in the Republic of Latvia or in any Schengen Agreement Member State for the period of time indicated in visa and for the number of times indicated therein.
Practically, in the case of studying abroad, a student arriving from third countries (residing outside Schengen Area) a residence permit is more suitable instead of student visa.
In order to receive a residence permit in the Republic of Latvia in connection with studies at an accredited higher educational establishment or participation in studies programme you shall present at embassy of Republic of Latvia a valid travel document admitted in the Republic of Latvia (passport) and submit the following documents:
filled application for a residence permit request; a photography; a statement on punishability issued by a competent institution of the citizenship or the host country, if a foreigner has resided in that country longer than 12 months a document confirming the necessary subsistence - EUR 285 per month (12x 285EUR = 3415 EUR a year). In this regard you should present a statement from bank indicating that you own at least 3415 EUR; a document confirming the envisaged place of residence in the Republic of Latvia and the rights to stay there; a document confirming state duty payment; an agreement on studies in the Republic of Latvia; Documents confirming that you have acquired the necessary education to start the studies. Before the submission of the documents your inviter shall approve the call at the Office of Citizenship and Migration Affairs Foreigners Service Centre or at a territorial office. Probably the invitation would be granted by the particular educational institution concerned. The Inviter shall require the invitation at Migration Office in Latvia and afterwards the invitation shall be sent to the embassy by post. Invitation is mandatory document in the process of obtaining visa.
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Area: 64,589 sq.km or 24,937 sq.miles. Regions: Kurzeme, Zemgale, Vidzeme, Latgale. Total national border length: 1,862 km. Length of Latvia's Baltic coastline: 494 km. Population: 2,272,300 Borders with:Estonia, Russia, Belarus, and Lithuania.
Short history of Latvia The Republic of Latvia was founded on 18 November 1918 (18 November is a national holiday and the day of proclamation of Latvia's independence). Following the end of the fight for freedom in 1920, several countries recognised Latvia's independence de jure, and 16 foreign missions were established in Riga. Latvia lost its independence in 1940 after the beginning of the World War II. It was first occupied by the Soviet Union (from 1940 to 1941). Then the occupation by Nazi Germany (from 1941 to 1945) followed. However, the Soviet Union regained the power and occupied Latvia again (from 1945 to 1991). As a result of Gorbachev's reforms, on 21 August 1991 Latvia declared restoration of its independence de facto. It restored the international diplomatic relations and joined the United Nations (UN).
The name Latvia originates from the ancient Latgalians which was one of the four Indo-European tribes that together with Semigallians, Couronians and Selonians was involved in the ethnogenesis of Latvians.
Flag of Latvia The flag of Latvia with three horizontal stripes the colours of which are maroon and white is one of the oldest flags in the world dating back to the events in the town of Cēsis in the 13th century. According to the legend a fatally wounded military leader together with its sword was wrapped in a white sheet and the blood stained both edges of the sheet. After the leader's death this sheet was used as a flag in the next battle which led Latvians to a victory. The design of Latvia's flag is officially adopted and provided for under the Constitution of Latvia – Satversme.
Geography of Latvia and neighbouring countries Latvia is the central country of the Baltic States and is situated in the Northeastern Europe. Latvia's territory the terrain of which formed in the ice age consists of rich lowlands in the plains and moderate hills. The most of it is lower than 100 metres below sea level. Latvia has a vast network of rivers and lakes consisting of more than twelve thousand rivers and approximately two thousand lakes. There are pine forests, dunes and white-sand beaches all over Latvia. The sea along Latvia's coastline is very shallow, and the Gulf of Riga is no deeper than 26 metres. The highest mountain in Latvia is Gaiziņkalns (312 m). The neighbour countries of Latvia are Estonia, Latvia, Russia and Belarus, and the strategic location of Latvia facilitates the development of trade and culture.
Climate of Latvia Latvia lies in the temperate climate zone, and its climate is affected by the proximity of the sea and air masses from the Atlantic Ocean. Latvia has four distinctive seasons. Summers are mild, but winters – moderately cold; the humidity level is relatively high, and there is frequent rainfall. The average temperature in summer is 15.8°C and in winter – -4.5°C. Temperature records have been accordingly 36.4°C and -43.2°C. Latvia's weather is marked by frequent change of air masses due to 170 fronts crossing the territory in February, July and October. These fronts are accompanied by strong winds which are responsible for the maximum occurrences of snowstorms in February, for the high level of rainfall and thunderstorms in July and for the strong winds, even storms, in October.
Nature of Latvia With more than 44 % of its territory covered by forests and the vast network of rivers and thousands of lakes, Latvia is one of the best preserved sanctuaries for various wild animals. More than 27,000 of flora and fauna species live under natural conditions in territories that are still relatively untouched by humans. Many rare species, for example, black storks and lesser spotted eagles live in their habitats which are mixed forests, swamps and meadows. Latvia is also densely populated by otters, beavers, lynxes and wolves, as well as large number of deer, elks, foxes and wild boars. It is an interesting place for ornithologists and other birdwatchers, especially the coastline and wetland zones during the migration periods, as well as for hunters during the official hunt periods.
Population of Latvia The indigenous population of Latvia is Latvians and Fenno-Ugrian Lives (Livonians). The existing ethnic composition is the result of post-war massive migrations. The following comparison can be made – 77 % of the population were Latvians in 1935, whereas in 1989 this number had decreased to 52 %. Population was 2,248,374 in 2010, and the population dispersal is the following: 68 % live in cities and towns and 32 % – in rural areas.
Latvian language Latvian is a Baltic language belonging to the Indo-European language family. The only language closely related to the Latvian language is Lithuanian. Latvian has been recognised as one of the most ancient and relatively unchanged languages in the world. It is the native language of approximately 1.5 million people. Russian and English are also quite common in Latvia, but German, French and Scandinavian languages are rather rare. Latvian is the only official language in Latvia; however, there are several mechanisms in place to provide people who do not know Latvian language with effective legal protection. The ethnic composition of Latvia is the following: 59.4 % are Latvians, 27.6 % – Russians, 3.6 % –Belarusians, 2.5 % – Ukrainians, 2.3 % – Poles, 1.3 % – Lithuanians, 3.3 % – other nationalities.
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Illegal immigration is travelling to or staying in a country without the approriate documents, entering at an inappropriate place or by an inappropriate method. Usually illegal immigrants try to enter a wealthier country, with a better quality of life, leaving a poorer country behind. There are three main factors which provoke illegal immigration: economic factors, criminal evasion or socio-political environment – effectively anything that can provide enough pressure such that a person is willing to break the law.
In the imagination of many, the mind of an illegal immigrant may seem to be very devious and cunning – while this is not universally true, it is an understandable perception given the tactics that many such desperate people employ. Immigrants have devised more than 30 ways to cross borders illegally. While some try to use more traditional methods, such as presenting falsified documents at the border or crossing border on foot in the middle of a desert, others act like a true inventors. Some immigrants hide themselves inside car seats, some vault over a border fence with a pole, some even try to hide in a suitcase at the airport. According to statistics, chances for the success are very small, because countries, which are primary targets for illegal imigrants, usually conduct serious border control procedures, including constant border patrols and fence building, but these individuals are often desperate, so if there is a way through – they will find it.
Another type of illegal immigration, which does not involve illegal border crossing, is overstaying an otherwise valid visa. In this case immigrants arrive in the host country on a legal basis, but they stay after their visa expires or perform work or other activities that might not be permitted by their visa. This method of illegal immigration requires a lot of effort, since you are forced to evade authorities who might discover your true immigration status. This means you can be scared to involve yourself in any kinds of legal action or participate in any form of legal agreement, this can limit your ability to do such simple things as bank payments, use of credit cards, legal, taxed employment etc. As a result, this approach can be very tiring and mentally exhausting. The legal consequences illegal immigrants who get caught vary from country to country. Usually the measures vary from deportation to jail terms.
Statistics provided by the International Organization for Migration, show that almost 15% of the world's total 214 million immigrants are illegal. For the last few decades the USA has experienced one of the largest influxes of illegal immigrants in human history. The biggest problem being the US–Mexico border, which is used by many thousands of illegal immigrants each year, this in spite of all the measures taken by the US government. Currently, the number of illegal immigrants, residing in the USA, is estimated to be around 15 million people. The largest amount of illegal immigrants reside in the state of California – 2,930,000 people, which is 25% of total population of California. Technically, it means, that each fourth person you see in the street there – is an illegal immigrant! According to the data provided by the Center for Immigration Studies, 56% of illegal immigrants are from Mexico, 22% from other Latin American countries, 13% from Asia, 6% from Europe and Canada, and 3% from Africa.
The European Union suffers from illegal immigration as well. According to data provided by the BBC, 80% of illegal immigrants pass through Grece – many of them through the border with Turkey. Lack of cooperation between Greek police, coast guard and the Turkish army (which is responsible for border control) makes this situation even worse. The majority of the rest of the illegal immigrants to the EU sneak in through the United Kingdom, entering using valid visas, but then overstaying those visas and disappearing into the general population. Currently in the UK, it is estimated. resides between 550,000 and 950,000 illegal immigrants from Africa and Asia.
It is worth mentioning, that because of illegal immigration - legal immigrants are also made to suffer. The Constant flow of illegal immigrants and an inability to properly control it, leaves the host country no other choice, but to take measures to make its immigration policy stricter which in turm makes things harder on legal immigrants as well.
Historical Perspective From a historical perspective, modern immigration started in the 18th century, accelerated by the slave trade and industrialization. At this time three main types of immigration began to appear: labour migration, refugee migration and urbanization. Because the USA gained independence in the year 1776, while in Europe imperialism was still dominant, at the beginning of 19th century many people immigrated to the USA, which was considered the land of opportunity.
The begining of the 20th century with the fall of the large colonial empires and World War I had it's impact too, as people were immigrating from Europe, driven by the fear of war and violence. The aftermath of World War I was the fall of colonialism and establishment of the League of Nations. At this point, an influx of immigrants from the former-colonies started, which resulted in a large amount of immigrants from the newly independent countries of Africa the former colonies of France, Great Britain, Spain, and the Netherlands.
The League of Nations failed to prevent World War II. The birth of national-socialism in central Europe in 1930s played crucial role in immigration, as many jews started migrating from Europe before the outbreak of World War II. After World War II the United Nations organization was established, which is a sentinel of peace in all the world since then. The roots of the European Union also date back to the late 1940s, when the Paris Treaty was signed.
Since then – the principle of freedom of movement have developped quickly. The newly established Schengen area in Europe allowed the citizens of its member states to move free without any border controls. The United Nations and many countries ratified treaties on freedom of movement and provision of asylum for refugees. However, for the last three decades governments have become very concerned with the problems of terrorism, people trafficing and the drug trade. Therefore, many countries had to reduce the simplicity in their immigration policies in order to improve their homeland security.
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As of 1 January, the Latvian banking system is a part of the Eurosystem, therefore the principles of Eurosystem apply.
In order to achieve the price stability objective, the Eurosystem uses a set of monetary policy instruments and procedures. The strategy targets the level of money market interest rates required to maintain price stability in the medium term, while the operational principles outline the means of achieving the particular interest rate level by applying the available monetary policy instruments and procedures. The ECB steers the short-term money market rates by its decisions regarding the key ECB interest rates which reflect the monetary policy stance of the ECB and affect the free liquidity on the money market.
Based on the available information about the latest economic developments, the ECB has to evaluate their implications for future risks to price stability. The monetary policy strategy pursued by the ECB in analysis of the macroeconomic developments is based on two pillars.
The first pillar includes an analysis of many economic and financial variables with potential short-term or medium-term price stability implications. The second pillar includes an analysis of monetary aggregates pointing to the leading role of money supply in maintaining price stability and focusing on a longer-term perspective. Both Eurosystem's strategy pillars are designated to ensure a deep analysis of the monetary, economic and financial developments in the whole euro area. This detailed analysis enables the ECB to set the key ECB rates at a level best suited to promote the overall euro area price stability.
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According to the World Bank Group, Latvia is among the top 25 countries where it is easiest to do business. Latvia's performance in starting a business is similar to that of the Netherlands, Ireland and Sweden, all highly respected jurisdictions with developed economic and business environments.
Procedure for setting up a business On average, opening a company in Latvia requires 4 procedures. Here, the word "procedure" refers to an interaction with a relevant government agency or other institution, be it a business register or a bank to open a corporate bank account in Latvia. Although the exact number of procedures may change depending on the circumstances, in general these are:
Preparation and certification of all necessary documents Opening a Latvian corporate bank account Company registration and registration for taxes Registration of employees for state social security It is worth noting that some of these procedures, e.g. Registration for state social security, can be completed online. However, the Latvian company registration procedure is not a so-called “one-stop shop”. This means that opening a company in Latvia requires interaction with several different institutions and it is not possible to register everything in one place.
Time required to start a business How long it takes to incorporate a company in Latvia depends on which country you open the company in. Opening a Latvian company from Latvia takes about 6 business days on average. If you are incorporating a company from other European countries or Central Asia countries, it may take up to 10 business days. For countries classified by the OECD (Organization for Economic Co-operation and Development) as high-income countries - around 8 business days.
The longest procedure is usually company registration and registration for taxes, it takes about 60% of the total time required to set up a company in Latvia. The preparation of the documents and the opening of a bank account each take about 20% of the total time. Enrolling workers for National Social Security is an online process, so the time required is negligible as enrollment is done on-site.
Company density While store density does not directly affect store opening procedures, it is a reliable indicator of the process. The more companies there are in the country, the easier it is to start a business, although this does not necessarily mean that a small number of companies means more difficult procedures. As of 2016, there are about 14,000 new companies that have only recently registered. This roughly corresponds to a number of newly founded companies in Estonia or Denmark. However, measured by the number of businesses per 1000 working-age inhabitants, Latvia is one of the most active countries in Europe. Currently (2016) there are about 10.6 businesses per 1000 working-age population, which is more than in Germany, France, Italy and many other European countries, only after the UK.
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Center for Registers and Information Systems (RIK)
RIK is a government agency that reports to the Ministry of Justice. The main purpose of RIK is to ensure an innovative and integrated environment of e-services for more efficient implementation of public administration and application of laws and jurisprudence. RIK is one of the largest IT organizations in Estonia.
It develops and manages various registers and information systems. This includes the commercial register, e-notary, land register and information systems from other areas (court information system, e-files, etc.). Around 50 registers are under the supervision of the RIK.
The Commercial Register of Estonia (a place for the registration of companies in Estonia) has been in operation since September 1, 1995. The portal of the Estonian Business Register is considered unique in Europe as it ensures quick and convenient establishment of companies. For example, it is possible to register a limited liability company in just a few hours with an ID card, without leaving home. In addition to the company search, the company portal can also be used to change a company's registration data and transmit annual reports electronically.
The Commercial Register of Estonia offers the following services. Business Registration Portal (CReP - Online site for business formation in Estonia)
It is a portal for entrepreneurs, with the help of which the registration departments of courts as well as the Central Commercial Register can be contacted, so that it can carry out various tasks in this portal. In this portal, entrepreneurs can submit an application for membership, a list of the board members with their personal details and relevant changes, contact details, information about relevant changes and annual reports. Residents of Estonia can access the portal using an ID card, Mobile ID or authentication through an Internet bank. Residents of Portugal, Finland and Belgium can access the portal by using an ID card, but citizens of Lithuania - by using a Mobile ID. Information system - the central commercial register It is an online service of the Center for Registers and Information Systems and this register is based on the database of the courts' register departments. This central database includes digital data from the commercial register, the register of non-profit associations and foundations and the commercial register of liens. It is a paid service with a monthly subscription fee of 10 EUR plus the request fee. By paying the subscription fee, an individual can access the information contained in the land registry, the commercial registry, the registry of non-profit associations and foundations, and the commercial pledge registry. A value-added tax (VAT) payment is added to the service fee. For their part, users of the Trade Register can search for information about their affiliated companies, non-governmental organizations and foundations free of charge. To access this information, a user must authorize themselves with an ID card.
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The labor force of Latvia is 1,271,040 people, about 64% of the total population. This includes anyone between the ages of 15 and 64. Of these, 61%, i.e. 775,334 people, are employed. Total unemployment in Latvia is 9.5%.
Education and skills Primary education is a general requirement (both social and professional) for the Latvian workforce, which is why the primary education rate is 98%. The Latvian primary education system consists of 4 grades of primary education, 5 years of lower/incomplete primary education and 3 grades of either primary education or vocational/technical education. About 40% choose to enroll in a vocational/technical institution and receive basic vocational/technical education. The other 60% opt for a normal primary education. Vocational/specialized primary education is available in cities with a developed specialized industry, e.g. Railway industry jobs in Daugavpils, a major railway junction between the EU and Russia.
Higher education is not a general requirement for the Latvian workforce, but is required to engage in specialized, skill-based and academic jobs. Higher education is achieved by 21% of Latvians. It is offered by 58 universities and vocational training institutions. Of the total working-age population, 40% have a high level of technical or academic skills, while 87% have intermediate qualifications.
Wages The minimum wage in Latvia is EUR 370/month before taxes (gross salary). According to various estimates, the average gross salary is around EUR 800/month. The Latvian Central Statistical Office estimates the average gross salary at EUR 818/month. Statistics show that starting in 2012, average wages in Latvia will increase by about 3-7% every year.
Net salary generally accounts for about 55% of gross salary. That is, 45% of gross wages are paid by the employer as taxes, and the employee receives 55% of their wages “on paper”. This also means that a minimum wage of EUR 370 costs the employer EUR 457.64 and earns the employee EUR 272.24. However, these calculations do not take into account variables such as tax credits for dependents in the worker's family. For each family member supported, the assessment basis is reduced by EUR 175 (2016), e.g. The minimum wage of EUR 370 now generates EUR 312.49 for the worker who has 1 dependent, EUR 331.15 for 2 dependents, etc. To learn more about how wage taxes work in Latvia, please read this article on the Corporate Taxation in Latvia.
Working time Latvian legislation provides for different types of working hours: normal working time, reduced normal working time, part-time work, shift work, night work and combined working time. A reduced working time is the one that is shorter than the standard working week. Day and night shifts and the summarized work schedule can be applied when the work process cannot be stopped or the rule schedule cannot be enforced. In any case, the working time must be mentioned in the employment contract and the working time should be calculated and documented by the employer.
Normal working hours in Latvia are 8 hours a day and 40 hours a week. The usual working week is Monday to Friday, but this is not mandatory as some companies, such as B. Shops are also open on Saturdays and Sundays. The total working hours cannot exceed 160 in 4 weeks - this allows for shifts of over 8 hours a day and 40 hours a week while ensuring that employees are not overworked.
Overtime Overtime is permitted under Latvian law, but must comply with the following principles. First of all, this must be agreed in writing between the employee and the employer. The agreement should include the amount of overtime and remuneration. According to the Labor Code, the number of overtime hours cannot exceed 144 hours in 4 months. In addition, Section 68 of the law stipulates that the employer must pay at least 100% of the regular hourly, weekly or piecework wage for overtime.
It should be noted that if an employee works more than contractually agreed but on a reduced schedule, such additional work does not count as overtime work. Nevertheless, in this case, the employee is entitled to claim compensation for more work, but the amount of compensation is not regulated by law.
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As in any country, Latvia's human resources are defined by its population. The total population of Latvia is approximately 1 986 000 people. Of them, the working-age population, ie people aged 15-64, accounts for about 64% - 1 271 040 people. About 14% are children under the age of 15 – 278 040 people. The rest of them, 22%, are retired or pensioners - 436 920.
The unemployment rate in Latvia is around 9.5% (2016). This means that out of 1,271,040 people, 90.5% are working - 1,150,291 people. These are the same people who could be considered the consumers with the greatest purchasing potential. 120 749 people (this 9.5% of the unemployed) are potential workers or workers. The under-15s are potential workers (looking ahead) but unlikely consumers. In Latvia, state pensions are not high, making pensioners more likely to be potential customers and an unlikely labor force.
Languages The official language of Latvia is Latvian, so all official documents (e.g. when founding a company) must be submitted in Latvian. Most contracts are also signed in Latvian, although certified translations are often available when dealing with foreign clients or partners. Latvian is also a primary language for transactions and marketing.
Another important language is Russian, due to the historical connections between Latvia and Russia. Although it is not recognized as a minority language and is not used officially (e.g. on most price tags), it is recommended to use Russian as an adjunct to Latvian advertising, as the Russian-speaking population accounts for about 39% of the total population - a significant number of Customers.
Public holidays Latvia has 14 public holidays, two of which always fall on Sundays and are not deducted from the working week. This number of public holidays is roughly in line with the European average, and due to the common culture they are also mostly the same: Christmas Eve, Midsummer, Easter, etc. As in other European countries, Latvian customers tend to make a lot of purchases before the public holidays, especially before more traditional public holidays like the midsummer festival.
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23.03.2025 11:59