Latvian Holding
Main advantages of Latvian holdi
ngs
Latvian holding company has no restrictions on the percentage of participation, holding period, the activity of subsidiaries, etc. (this does not apply to income earned and paid in tax-free countries of the so-called "black list" of the Cabinet of Ministers of the Republic of Latvia) . In addition, Latvian Holdings:
- Since 2013, are not subject to income tax from the sale of shares of capital stock and,
- Dividends received.
- Since 2013 is not taxed at the source of payment of dividends to the foreign companies.
- Since 2014 is not taxed at the source of payment of interest and royalty payments to the foreign companies.
- No duties on capital increase and re-share capital
- There are no rules on controlled foreign companies
- One of the lowest rates of corporate tax in Europe - 15%.
- Geographical position at the crossroads of transport routes.
- The necessary infrastructure and availability of skilled personnel, speaking Russian and English;
- Ability to attract financing from European funds for the organization of production and business in the service sector, including foreign investors.
Entered into force, the agreement on avoidance of double taxation between Latvia and Russia, provides the following benefits for the Latvian holding companies:
- More favorable conditions for permanent establishments.
- Charges for international transportation or rental vehicles used in the transportation of this type will not be subject to 10% withholding tax in Russia.
- Other business profits and capital gains (other than the use and sale of real estate and shares of the company owning real estate) will not be taxed at source.
- Independent and dependent personal services shall be exempt from the source in another country, if the work does not take place on its territory, or a natural person is not there more than 183 days.
- Opportunity to reduce (set off) tax payable in Russia on the amount of tax paid in Latvia.
Main conditions of the Latvian holding company:
- The minimum capital requirement for Latvian Holding - LVL 2000 or ~ 2850 EUR.
- The founders / participants of the Latvian Holding may be legal and natural persons, residents and non-residents of Latvia, their number is not limited.
- Director of the Latvian Holding Company can only individuals, both residents and non-residents of Latvia, the number is unlimited.
- Time for registration of the Latvian Holding 2 working days, if the founder individual arrives in person, up to 10 working days if the company is registered remotely and founder is a foreign entity.
- Registering Holding as a VAT payer takes 10 working days
The procedure of registration of the Latvian Holding
- Very simple and fast. The client is required to:
1. Provide information on:
- name;
- data of the founder / s (copy of passport or notarized, legalized and translated into Latvian copies of statutory documents if the founder is a foreign legal entity);
- sharing arrangement, if a few of the founders;
- Director’s data (copy of passport indicating the place of residence);
- registered address (we can provide if nessesary).
2. Sign prepared articles of incorporation.
3. Pay in the share capital of the company
The cost of maintenance of Latvian holding company
The cost of maintenance of Latvian holding company is very stable and predictable. In most cases, costs of holding Latvian company are competitive in comparison with other European countries where there is a holding regime. To calculate the total cost and additional details, please contact us.
And finally - the general features to choose the Latvian Holding
Introduced in Latvia in 2013, favorable treatment for Latvian holding companies and amendments to the Law "On Corporate Income Tax" put Latvia on the same level with traditional centers of global investment activity as Cyprus, Malta, the Netherlands, and Luxembourg. However, presenting all the advantages of the old Europe, including political and economic stability and good reputation in the international business community, Latvia benefits accessibility, friendliness and, as virtually the entire population speaks Russian, financial services to Russian here - not a privilege for the few, but the usual ordinary phenomenon.
Directives on EU Parent-Subsidiary relations, on interest and royalties, as well as a wide network of agreements for the avoidance of double taxation (with 51 countries, including almost all European countries, USA, Canada, China, Belarus, Ukraine, Kazakhstan, Uzbekistan, Azerbaijan, Russia) allow the Latvian holdings to avoid or reduce withholding taxes from dividends, interest, royalties and other income paid to Latvia and to provide the functionality of a holding regime.
