According to the Commercial Law of Latvia, in order to establish a company, the share capital must be fully paid up prior to its registration in the Register of Enterprises.
The standard minimum share capital for a company is 2,800 EUR.
The standard procedure involves opening a temporary account in a credit or payment institution in the name of the company being established and depositing funds into it. Unfortunately, recently, third-country nationals (non-EU citizens) have encountered difficulties opening such temporary accounts: banks’ AML procedures have become so strict that the founders of a future company must spend considerable time and money to successfully comply with them. This is especially true when the founder does not have a temporary residence permit in any EU country.
As an alternative solution, we suggest considering another method of paying up the share capital, namely: payment by property investment.
According to the Commercial Law, share capital is paid for in cash or with a property contribution. A property contribution may be a tangible or intangible asset that can be used in the company’s commercial activities, as well as securities and even crypto-assets. However, we advise caution when investing in securities and crypto-assets during company incorporation, as their value fluctuates constantly. If their value declines before company registration, the difference will need to be paid in cash, and we’ll have to reopen the account. Intangible assets include, for example, intellectual property: trademarks, design samples, inventions, various works (such as paintings), and so on—in short, anything that can be valued in monetary terms, with the exception rights of claims.
First, the property to be contributed must be valued. Previously, founders could perform such valuations themselves, but currently, this right belongs exclusively to certified appraisers, with few exceptions.
Thus, the general procedure for paying up share capital via property investment may look like this:
(a) the founder acquires, for example, computer equipment or furniture to be used for the company’s operations;
(b) a certified appraiser performs a valuation and issues an opinion;
(c) the founder transfers the property to the company being established by deed.
Thus, when establishing a company, it is not necessary to open a bank account; this can be done later, after registering the company and obtaining, for example, a temporary residence permit in Latvia for a non-EU resident founder through this company. The acquired residence permit will facilitate the successful opening of a corporate bank account in one of the Latvian banks or another payment institution.
The law office Inlatplus, with its extensive practice and expertise in corporate and immigration law, is ready to provide all necessary legal support in the process of establishing a company in Latvia and, if required, in obtaining temporary residence permits for its founders.
Recent News
