According to the World Bank Group, Latvia ranks 22nd out of 189 countries in terms of the ease of doing business. The country ranks in top 20 for acquiring credit for companies; in top 30 starting a business, constructing and registering real estate, ease and efficiency of paying taxes, international trading, and enforcing contracts; and in top 50 for resolving insolvency and protecting minority investors. The weakest point of Latvian business environment is by far the ease of getting electricity for newly-built real property, for which the country ranks 65th.

Overall, it could be said that Latvia is most favourable for businesses that are not planning to engage in building new infrastructure. The ease of company formation, paying taxes and getting credits make a good combination with cheap but skilled and educated workforce and low infrastructure and facilities cost. Thanks to this, Latvia is a very popular country to start a business at, especially for entrepreneurs outside of the EU, because in total, it takes a lot less investments to open a company in Latvia than in most of the other EU-member states, while the end-result (in terms of quality) is the same. The business risks for such entrepreneurs are comparatively low, provided they take note of the possible competition on the local market.

Legal framework
Since Latvia joined the European Union in 2004, it adopted the majority of the Union's laws and policies. One of the examples is the Schengen area agreement, which allows an unhindered international trade with other EU member-states (more about Latvian market access from EU here).

Latvian policies favour free-market and accordance with EU policies. Some analytics classify Latvian legislation as conservative, meaning that new policies take a long time to be accepted by the government, and they are generally treated with caution. The exception in this case are legislative initiatives proposed by the EU. Latvia strives to be an active member of the European economic area, trying to adapt its policies to European standards.

Business geography
Most of the businesses are concentrated in the capital of Latvia, Riga, and the cities surrounding it. Other major cities are often devoted to a particular market sectors, e.g. the port cities of Ventspils and Liepāja provide ice-free ports (read more about the logistics in Latvia), while Daugavpils is an important railroad hub.

Cities of regional importance also play their part in the economic environment of Latvia. The city of Rezekne, for example, is where the Rezekne Free Economic Zone is located. The FEZ contributes to the development of the region, attracting companies with up to 100% real estate tax relief, corporate tax relief of 80% and the return of investment cost by tax incentives of up to 55%. Rezekne is also an important railroad hub.

The most urbanized regions of Latvia are the central, Eastern and Westerns regions. It must be noted, though, that if the central region is thoroughly urban, the East and the West are urban in the sense that the majority of population lives near major cities, with pockets of rural areas in-between. The Southern and the North-Eastern regions are mostly rural.

Market freedom
Latvia is a free market economy, meaning that economic policies are aimed to lessen government intervention and prevent the creation of monopolies. According to the Wall Street Journal and the Heritage Foundation, Latvia is world's 37th most free economy. Latvia's score in this case is upheld by the high levels of fiscal, trade, investment and business freedoms, but is somewhat dragged down by corruption and government spending.

In Europe, Latvia takes up the 17th place in the rank of market freedom. This position becomes stronger and stronger each year, as Latvia takes steps to integrate into the European economic zone and be on par with major member-states.

United Kingdom of Great Britain and Northern Ireland (UK) is a constitutional monarchy located off the north-western coast of continental Europe. The country includes the island of Great Britain, the north-eastern part of the island of Ireland and many smaller islands of the British Isles. Large portion of the United Kingdom's GDP comes from the service sector. United Kingdom also has a large automotive business, millions of tourists every year and well developed air traffic.

Company formation
When you start a business in the UK you must choose a structure for your business. Most businesses in the UK are: sole traders, limited companies, partnerships. When setting up business in the UK you may need to apply for a licence, depending on what your business is.

Please check the expected company name and address with us to learn if such is available.
Details about company Director and Secretary
Share Capital and Shareholder Details
You must register for VAT with HM Revenue and Customs (HMRC) if your business turnover is more than £79,000.

Maintaining a company
Returns must be filed annually, failure to do so is considered a criminal offence and may result in a fine depending on the company type and duration of delay.
Your Corporation Tax rate depends on how much profit your company makes and may change on 1 April each year.
Corporate tax rate
In United Kingdom corporate main tax rate is changed from year to year in 1st April.

Rate From 1 April 2014
Profits £300,000 or less (small profits rate) 20%
Profits above £300,000 (main rate) 21%

The Baltic Sea region is the fastest growing business region in Europe. The trade flow among the states in this region has been steadily increasing year by year. The taxation system of Estonia is considered one of the most liberal taxation systems in the world. In 2000, Estonia implemented a comprehensive tax reform with an aim to create the simplest, most comprehensible and most convenient taxation system possible. The main advantage of Estonia is the low-tax system that can be described as a simple system with no hidden surprises and that was basically established to promote business and increase profits.

The taxation system of Estonia includes state taxes stipulated by the tax legislation and local taxes imposed by local governments or city councils in the respective territories according to laws and regulations.

The state taxes are the following:

excise duty;
income taxes;
gambling tax;
value added tax;
land tax;
social tax;
customs tariffs;
heavy goods vehicle tax.
Corporate income tax
As a result of reforms, the main benefit of entrepreneurs was the exemption from the corporate income tax in the event of reinvesting the profits. Thus, Estonian enterprises must pay the income tax only on their distributed profits, namely, dividends. The corporate income tax (tax on distributed profits) is 21 % of gross dividends.

This taxation system is conceptually different from the classic income tax system, because the tax is levied on distributed profits (also hidden distributed profits) instead of company profits.

Value added tax (VAT)
The value added tax payers are enterprises the taxable supply (except for import) of which does not exceed EUR 16,000 during a calendar year. The tax is levied on transactions with goods and services in Estonia and on the import of goods. The tax rate is 20 % of the taxable value.

The taxable period is one calendar month, and the value added tax must be paid into the state budget by the twentieth day of each month. The tax is fully paid into the state budget.

The registration of enterprises is carried out by the Tax and Customs Board also administering the VAT levied on domestic goods and services.

Personal income tax
In 2010, the tax rate is 21 % of taxable income, and residents must pay the tax on their income received both inside and outside Estonia. The taxable income includes the income from employment (salary, wage, bonus and other remunerations), business income, interest, royalties, rent, capital gains, maintenance support, pensions, scholarships (except for scholarships paid from the state budget or pursuant to law).

Social tax
This tax is imposed to ensure state pensions and health insurance. It is paid by legal persons, natural persons and non-residents with regular income. The tax rate is 33 % of the taxable amount. The tax must be calculated monthly, and a corresponding amount of money must be transferred no later than by the tenth day of each month.

Since 1 January 1999 the social tax payments have been personalised, and they form pension funds which will be considered in each specific case. The tax is accumulated in a special account of health and pension insurance funds within the state budget.

Excise duty
In Estonia, the excise duty is levied on tobacco, alcohol, fuel, packaging and vehicles.

The excise duty helps to control the amount of a specific product or provision of a specific service seeking to adjust the consumption of domestically sold goods.

Like value added tax revenues, also excise duty revenues are affected by changes in domestic demand, increase in imports of excise goods, as well as changes in excise duty rates.

Gambling tax
The gambling tax is levied on income from games of skill, totalisators, betting and lotteries, as well as gambling tables and machines used for organising games of chance in licensed places. The tax is based on payments out of which the winnings are paid. The taxable period for organising lotteries, games of chance and skill is one calendar month. The taxable period for totalisators is the period during which the betting is organised (it must be within the same financial year).

Tax rates are the following:

EUR 447 per one gambling machine;
EUR 1278 per one gambling table.
The tax rate on betting is 5 %, on totalisators - 5 %, on games of skill - 18 %, and on lotteries - 18 %.

Land tax
The tax rate is 0.1-2.5 % of the taxable value. The tax on land where the economic activity is restricted has been determined by the decision of Estonian government in the amount of 25 %, 50 % or 75 % of the tax rate. The land tax is paid three times a year - by 15 April, 15 July and 15 October.

The national land tax is paid on all land except:

land where economic activity is prohibited;
land adjacent to buildings or parts thereof of diplomatic missions and consular representations of foreign states;
cemeteries and land under churches and temples of congregations;
land in the use of a foreign state or international organisation. In addition, the municipal land tax is not paid on land in municipal ownership or land in public use based on the decision of the local government.
The value of land is stipulated by the Land Valuation Act. There are exemptions which are the following: the rate of land tax for areas under cultivation and for natural grasslands and forest land is 0.1 % to 2.0 % of the assessed value of the land annually.

Recipients of pensions may be exempted from the obligation to pay land tax on up to 0.1 hectares in cities and 1.0 hectare in rural municipalities on the condition that the applicant for the tax exemption uses the land for living and does not receive rent on the basis of the right of use of land.

The tax is fully paid into the municipal budget of the local government at the primary level. The tax is administered by the Tax and Customs Board.

The Denmark embassy in Riga is located in the city center. The Embassy's working hours are from 09:00 to 17:00 (Monday - Thursday) 09:00 to 16:00 (Friday) by local time. National Day is the 5th June.

Address of the embassy
Location of embassyThe Denmark embassy in Latvia is located at Pils street 11 in Riga. The Embassy's postal code is LV 1863.

The Republic of Latvia was proclaimed on November 18, 1918. The next steps that the new state took were the creation of the financial system and the introduction of the national currency of Latvia.

On November 2, the Bank of Latvia issued temporary banknotes in the denomination of 10 lats – 500 ruble notes with overprint. The Bank of Latvia included both the functions of a central bank (issuing currency, controlling currency hedging and cash circulation) and a commercial bank (lending to and financing public and private companies, institutions and individuals).

The structure of the bank was worked out in 1924 as follows: a head office (2A K. Valdemara Street, Riga), eight branches, which handle all banking business, and fourteen branches, which act as treasury and accept deposits. This was the structure of the bank until 1940.

The law nationalizing banks and large industrial companies was passed on July 25, 1940. The nationalized credit institutions were merged and reorganized into branches of the Bank of Latvia.

On March 2, 1990, the Supreme Council of the Latvian SSR (then entity of the USSR) passed the Law on Banks and the Resolution on the Bank of Latvia.

Latvia joined the IMF on May 19, 1992. The legal basis for cooperation between Latvia and the IMF is the Law of April 15, 1992 on the Accession of the Republic of Latvia to the International Monetary Fund (IMF). The International Monetary Fund is an organization of 188 countries working to promote global monetary cooperation, ensure financial stability, facilitate international trade, promote high employment and sustained economic growth, and reduce poverty around the world. In 1992 there were 50 active banks, with the number of active banks increasing to 80 the following year.

The 2008 Latvian financial crisis, which emerged from the 2008–2009 global financial crisis, was a major economic and political crisis in Latvia. Interestingly, despite the crisis, the number of officially registered banks in Latvia has increased from 28 to 29. The crisis was triggered by a bursting of the easy credit market, which led to an unemployment crisis and the bankruptcy of many companies.

Economic activity has recovered since 2010 and Latvia's rate of economic growth in the first three quarters of 2012 was the fastest among EU Member States. 29 active banks resumed their activities on Latvian territory in 2012. On October 12, 2011 the Bank of Latvia opened its annual conference on economic development. This year it was entitled Global Challenges and Local Opportunities: Achievements and Prospects in the Baltic States.

In early July 2013, EU finance ministers approved Latvia as the 18th member of the eurozone, a formality that put the country on track to use the currency on January 1, 2014.

The business register offers the following services:
The business register has a power to register businesses or companies (names of companies are subject to special regulations. For example, it is necessary to draw up a name that does not contain misleading information about important conditions of entrepreneurship, in particular, the legal form of a company (an enterprise) or business volume. It should also be noted that the name is not translatable.), mass media, commercial liens, significant influence, marital property, representative offices and missions abroad companies and organisations, European companies, European cooperatives and public and private partnership agreements;
The business register is authorized to ensure the maintenance of the following registers of entities: the register of public organizations, the trade register, the trade union register, the register of associations and foundations, the register of European economic interest groups, the register of arbitral tribunals, the register of political parties, the insolvency register and registers of religious organizations and their institutions;
The Business Register has the authority to receive and examine the documents to be submitted for registration from legal persons and facts referred to in laws and regulations, and stores these documents;
The business register has the authority to certify signatures (signatures are certified only by natural persons registered in Latvia and representatives of legal entities whose rights of representation are registered in the Latvian Public Register.
When confirming an individual's signature, a business registry officer verifies the identity and legal capacity of the signer. The business registry officer who certifies a person's signature is not responsible for the content of the documents.);
The business register has the power to verify the names (companies) entered in the registers maintained by the business register and the relevance of this information;
The business register has the authority to examine and prepare responses to the submissions and requests for information received, prepare derivations of registration files and official business register documents and provide interested parties with the opportunity to access the registration files;
The business register has sanctioning powers defined by international organizations and deals with cross-border mergers of corporations.