About small capital SIA company
A Latvian private limited liability company (SIA) is a limited liability legal entity with unlimited number of shareholders. This form of business is often chosen due to its flexibility and lower personal liability, and it is also considered reliable both in Latvia and internationally. The are only few differences between full capital company and small capital companies. If the capital is lower than 2.800 EUR, so the owners of this company have an oblilgation to cover the loss of creditors up till full capital amount. Also, the juridical persons cannot become owners of that company, as well as board members have to beshareholders of the company.
One of the biggest challenges is the initial capital requirement. In addition, foreigners seeking to establish a joint stock company are subject to additional checks when opening a capital accumulation account with a bank or other financial institution, which lengthens the process. If you are from none EU country, you will probably fail in this process, so the only way for non-EU nationals to run business in Latvia, would be registration of a Latvian branch of you domestic company.
If you have any questions, do not hesitate to contact us – we will provide professional advice on the establishment and operation of a joint stock company.
A few facts:
- Authorized capital – from 1 – 2,799 EUR;
- The name must be unique;
- The board must have at least one member;
- The concept of “CEO” does not exist in Latvia;
- The closest concept to the “CEO” will be the chairman of the board or simply the board member;
Service price: 300 EUR + VAT.
The price includes:
- Preparation of the registration form for submission to the Latvian Registers Centre;
- Preparation of the Articles of Association;
- Preparation of the Memorandum of Association;
- Preparation of the registration form for submission to the Latvian Registers Centre.
Documents are prepared within 1–3 business days from the payment for the service and receipt of all necessary information.
Despite the fact, the capital may be as low as 1 EUR, after preparing the incorporation documents, one anyway must open capital accumulation account in the bank or other financial company and pay in the capital by a bank transfer. Document, proving capital payment is required for the successfull incorporation of the company.
Even if a company has only one shareholder, its board must consist of at least one person. If there is only one actual board member, he automatically also acts as the chairman of the board and acquires the right to represent the company and sign documents on its behalf.
Other authority structures are also possible – for example, the right to sign can be granted to each or several board members together. Unlike in some countries, in Latvian companies the position of CEO is not registered in the register, therefore third parties are not aware of the existence of such a person. But it is always possible to appoint a chairman of the board.
Board meetings must be held regularly and properly recorded.
A shareholder has a significant influence on the company’s activities: he appoints board members, sets strategic directions at the shareholders’ meeting that the board must implement, and appoints an audit firm. The auditor checks not only the financial statements, but also the board minutes.Small companies are usually exempt from the audit obligation.
