Latvia

Business Environment

Business practices

Closed hours and days: 8.30 or 9 AM to 12.30 AM or 1 PM and 1.30 or 2 PM to 4.30 or 5 PM. However, on Friday, offices close at 3 or 3.30 PM.

Public holidays

Compensation day

Periods when companies usually close

Standards

National standards organizations
Integration in the international standards network: It is advised to write the products labels in the official language : the country of origin must be mentioned along with the ingredients of the product and additives.
Products marking is obligatory, especially for alcohol and tobacco.
Anything concerning standards and certificates is under the responsibility of the Department of Trade policy in the Ministry of Economy.
Classification of standards
Online consultation of standards
Certification organizations

Legal framework

Independence of justice: Constitution of the country provides an independent judiciary and the government generally respects it. But judicial reforms in the country have been slow and prone to corruption.
Equal treatment of nationals and foreigners: Foreign nationals can expect an impartial trial from the country’s judicial system.
The language of justice: The judicial language in the country is Latvian.
Having recourse to an interpreter: Having an interpreter is possible.
Sources of the law and legal similarities: Latvia is a Republic state based on parliamentary democracy. Latvia (official name: Republic of Latvia) gained its independence in 1991 after disintegration of the Soviet Union.
President is the chief of state and is elected by the parliament in a separate election for a four year term. President is the commander-in-chief of the armed forces. President appoints the Prime Minister as head of the government who in turn has to receive a confidence vote by the parliament and serves a four year term. Prime Minister enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs.The Council of Ministers is nominated by the Prime Minister and appointed by the Parliament.
The legislature in Latvia is unicameral. The Parliament consists of 100 seats; its members are elected by direct popular vote to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Legislative power is vested in both the government and the parliament. The government does not have the power to dissolve the parliament. The people of Latvia enjoy considerable political rights.
Constitution of the country provides an independent judiciary and the government generally respects it. But judicial reforms in the country have been slow and prone to corruption. The main source of the law in the country is the constitution of 1922 (amended in 1998); legal system is based on civil law system. Latvia being a member of the European Union (joined EU in May 2004), the national law in the country has to comply with the conditions of the Community legislation. The judicial language in the country is Latvian; having an interpreter is possible.
Latvia is ruled by law. Foreign nationals can expect an impartial trial from the country’s judicial system. A high degree of corruption exists in the country as compared to other EU members. Latvia is the most corrupt among the Baltic states, particularly effecting politics and corporate sector. However, the government has adopted various anticorruption measures.
Consulting national laws online

Intellectual Property

National organizations: The application for the grant or registration of a patent can be done in the language of the country, in English, in Russian or in German. These applications have to be addressed to the patents office in Latvia, either directly or through the intermediary of a legal representative. The related law of patents was voted in 1993 and as for trademarks, the law was passed in the same year.
The Latvian law is very similar to the French Law but the protection of intellectual property rights will be consolidated in the near future.

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	Patent Law March 30, 1995	20 years, renewable for a period not exceeding 5 years
Trademark			Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design	Law on Industrial Design Protection May 4, 1993	5 years, renewable for two further 5-year periods
Copyright
Industrial Models

Tax rates

Consumption taxes

Tax rate: 18%
Reduced tax rate: There are two lower rates.
A 5% tax rate applies to certain services, such as hotel services, veterinary services, and water and waste collection.
A 0% tax rate applies to the export of goods and related services, and supplies and maintenance relating to vessels used by international shipping lines.
Other consumption taxes: >> To get further information on VAT rates, please check the list of VAT rates applied within the European Union

>> More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate taxes

Tax rate

Capital gains taxation

Capital gains are included in the taxable income of the Companies operating in Latvia.
For non-resident companies without a permanent establishment, a final withholding tax at a rate of 2% is assessed on proceeds received on sales of Latvian real estate.

Other corporate taxes

Individual taxes

Tax rate

Allowable deductions and tax credit

Are exempt:
- income from investments in private pension funds and insurance indemnities,
- gain on the sale of personal property.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the convention signed on the website of the Ministry of Foreign Affairs.
Whithholding taxes
Bilateral agreement

Sources of fiscal information

Tax Authorities: State Revenue Service of Latvia
Other domestic resources

Accounting rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting regulation bodies
Professional accountancy bodies
Accounting news