As much as we would like to postpone this moment, because any changes frighten at first, Latvia will join Euro zone as of January 1, 2014. It is advisable to get prepared to Euro adoption and understand the procedure thereof in order to avoid unexpected surprises. Several stages await us relating to Euro adoption. First significant date is October 1, 2013. This is the start of simultaneous price indication in both currencies – Lats and Euro. This stage will last 9 months until June 30, 2014. Within said period receipts and invoices issued to private individuals, total transaction amounts shall be specified both in Lats and Euro. Information on goods and services’ prices the seller will have to specify in both currencies: Lats and Euro. Therefore, consumers (private individuals) upon receiving a service or goods will see the price of the goods in Lats and Euro. This stage may be referred to as getting used to Euro. Second significant stage is a period of simultaneous circulation of Euro and Lats commencing as of January 1, 2014 and lasting for two weeks till January 14, 2014. Exchange of Lats to Euro awaits us within this period. When paying for goods and services with Lats, the change will be issued in Euro. This may cause panic at first. One of the ways out could be paying with bank cards instead of cash and you may avoid the risk of mistake. One shall also think of cash savings in Euro to avoid unpleasant situations. Try to get used to the Euro currency beforehand, i.e. the appearance and distinctive features thereof. Circulation of counterfeit Euro is not as small as one would think, therefore the flow of counterfeit money is quite possible, especially within the period of new currency adoption because people aren’t used yet to Euro and most probably will not learn so fast how to distinguish true money from counterfeit. Some companies and private individuals will definitely consider buying currency testing devices. As of January 1, 2014 all money means deposited at bank accounts in Lats will automatically be converted to Euro at the rate of 0,702804 Lats for 1 Euro. If you own two bank accounts for settlement in Lats and Euro, then within two months of Euro adoption you may address the bank with request to close one of the accounts without additional fees. The period for exchange of Lats into Euro is not limited, however, it may be performed free of charge:
- within 3 months as of Euro adoption at any post offices of Latvian Post;
- within first 6 months – in all branches of commercial banks and Bank of Latvia.
After July 1, 2014 Lats will be exchangeable at the Bank of Latvia without time limits, however, in consideration for a certain fee. Expenses relating to Euro adoption entrepreneurs will have to incur at their own expense. Exclusion will effect only state institutions; Latvian Post will also get compensation from the state budget for exchange of Lats into Euro in cash. What else should the entrepreneurs keep in mind? All agreements entered into prior to January 1, 2014 in Lats will remain in effect and will not require amending. Besides if the equity capital of a company is registered in Lats, then within 30 months of Euro adoption (i.e. 01.01.2014) an application to the Enterprise Register shall be submitted for purpose of making amendments in Articles of Association to re-register the nominal value of equity capital from Lats to Euro. Newly established companies 6 months prior to Euro adoption, i.e. as of July 1, 2013, may register the equity capital in Euro. On January 1, 2014 a conversion of all records in bookkeeping registers from Lats to Euro (at the rate 0,702804 for 1 Euro) shall be made, records in all documents as of January 1, 2014 shall be made in Euro. Annual account for the year 2013 shall be made in Lats, amounts in annual account for the year 2014 will already be specified in Euro only. All tax payments as of Euro adoption shall be made in Euro. In summary it shall be noted that there’s no need to panic beforehand, everything will be back in its place and we will get used to Euro just like once got used to Lats. More confident will be the one who will beforehand get prepared to the forthcoming changes. Law office INLAT PLUS is always ready to help you in that.
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