The latest changes in company registration processes in Latvia: what entrepreneurs need to know in 2025
Latvia is traditionally considered one of the most attractive jurisdictions for starting a business in the Baltics. However, from 2024 to 2025, important changes in legislation regarding the registration and operation of enterprises entered into force in the country.
If you are planning to open a company in Latvia or already do business here, get acquainted with the latest innovations to avoid mistakes and penalties.

📌 Main changes in company registration in Latvia in 2025

1. 🆔 Mandatory electronic registration using eSignature and eAddress
Since 2024, the mandatory requirement to register new companies only in electronic format using the Latvija.lv platform or the website ur.gov.lv — Registration Office has come into force.
Innovations:
* All founders must have an electronic signature (eSignature, eID or Smart-ID)
* Each company is automatically assigned an official electronic address (e-mail address) for communication with the country
* Submission of documents in paper format is allowed only in exceptional cases (for example, for foreigners without eSignature)
📍 The changes are aimed at digitizing document flow and speeding up processes.

2. 💶 Minimum share capital — only from 1€, but with conditions
To create a limited liability company (LLC), it is still possible to register with a minimum share capital of €1, but now there are strict restrictions:
What has changed:
* A company with a share capital < €2800 must comply with the following requirements:
* it must not have more than 5 participants, only natural persons
* may not pay dividends until the capital reaches 2800€
* Such LLCs must make reserves every year until the full amount of capital is reached
📌 This is done to strengthen the financial responsibility of small businesses.

3. 🔍 Stricter checks when registering foreign founders
Since January 2025, the requirements for verifying the identity and origin of funds of foreign founders have been strengthened:
* Mandatory Beneficiary (UBO) Verification
* When registering a company with foreign founders, it is necessary:
* Submit translated and certified copies of passports
* Specify the source of funds
* Confirm business reputation
❗️ If the founder is from a “risk country” (e.g. sanctions jurisdictions), registration may be refused or additional documents may be requested.

4. 📊 Uniform Classification of Activities (NACE 2.0)
Since 2025, when registering a legal entity, it is necessary to accurately indicate the code of the main activity (NACE) corresponding to the EU classifier. Why is it needed:
* Tax Service (VID) and other authorities now automatically determine tax and reporting obligations depending on NACE
* Clarification of codes helps to avoid problems with licensing and VAT registration

5. 📈 VAT (VAT) registration updates
Previously, it was possible to register a company, and later - to apply for VAT registration. Since 2025, this process has become stricter:
* Registration is possible if there is evidence of real activity (contracts, customers, office, website)
* For Foreign Founders — Proof of Tax Residency and Business Purpose Required
📌 VAT registration without economic justification may be refused.

6. ⚖️ Mandatory disclosure of information of beneficial owners (UBO)
This requirement is currently under strict control and testing:
* UBO data must be submitted immediately after registration
* Any changes - mandatory notification within 14 days
* Failure to provide information - fine up to 1400 euros

7. 🚨 Penalties for fictitious companies and nominal directors
As of 2025:
* The registry is authorized to delete inactive companies that have not submitted reports for more than 2 years
* Hundreds of cases of use of nominal directors have been identified - such schemes are now under special supervision
* The State Revenue Service (VID) and the police carry out checks if there is a suspicion of fictiousness
📌 This is especially true for companies registered to circumvent visa or tax restrictions.

8. 🕒 Registration rules and state fees
SIA electronic registration: 1-3 business days, from €20
Registration of LLC with share capital from: €2800, 1-2 days €150
Voluntary VAT registration for up to 10 working days, free of charge
✅ Recommendations before registering a company in Latvia
1. Prepare documents in advance: passport, address, business plan
2. Get an eSignature or Smart-ID — this will speed up the process
3. Choose the right NACE code — it affects taxes
4. Decide from the outset whether VAT registration is necessary
5. Ensure that beneficiaries and sources of funds are legally clean

⚖️ How Lex&Finance can help
The law firm ILEX&Finance provides a full range of services for company registration in Latvia:
* Consultations on the choice of business form and taxes
* Preparation of constituent documents
* Support for submission to UR and VID
* Receiving an eSignature and Opening an Account
* VAT registration and assistance with tax planning

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Let us provide reliable legal support basis for your business in Latvia, taking into consideration all current changes.
📞 Contact us to open a business without risks and bureaucracy.