Question 1

Q: If I invest in a Latvian company, will I get my capital refunded after five years?

Accepted Answer

Ans : It all depends on the company you choose to invest into and how much capital are you capable of brining in.

However, a successful company owner would ask "What's in it for me" ??

Why should I become responsible for certain mandatory annual taxes, settle you and your family into Latvia and at the end of it all, give all your money back to you ??

Why don't you just come and start your own business, bring Euro 50,000 capital and pay Euro 40,000 in annual taxes from year one ?? If you are not capable of doing this, then you must empower a running company that is capable of meeting the mandatory conditions.

Theoretically,  a successfully running, high margin Latvia based business, with a clear strategy to remain profitable, is capable of generating enough profits to give back all or at least partial capital back to you, after five years.

However, at a small and bare minimum investment of Euro 50,000, it would be difficult for any business.

We have a few companies,  with  a clear investment recovery mechanism in place, however, at the bare minimum of Euro 50,000, these do not make sense for the company owner.  Such owners would be able to structure a deal to return all your capital, if you are able to invest at least  Euro 100,000 or more.  This the market trend I have seen in 2024 onwards.

If your capital is too expensive and complicated to get, owner would  reject you as an investor, take a local bank loan at 12% and tell you to invest within your own country, or buy some real estate worth Euro 250,000 to qualify for Latvian residency.

The idea is to incentivize the Latvian business with capital at lower cost to the owner, to make sense of sponsoring you and your family into Latvia.

Owner must focus on continuing to pay those taxes, that are essential for safeguarding your residency status.

Think again carefully, what is your focus ? Residency rights in Latvia, or business income or capital back guarantee ? You must then choose your investment wisely. You may wish to check out the categories of business you can invest in.

If you are low or zero risk appetite investor,  perhaps you consider the property purchase route instead and not invest in the capital share program at all. However, the property value must be Euro 250,000 or more.  While the capital investment starts from Euro 50,000.

Note that additional fees, and overheads on all types of investments connected with residency in Latvia. These can be Euro 25,000 ore more and must be kept in your budget.

Question 2

Q: Will the Latvian company offer  some profit on my capital share investment ?

Accepted Answer

Ans: In short, some companies do offer some return, some do not offer anything at all. This depends on the type of business that you invest in. Please read this section about different categories of business (https://www.proserve.lv/the-latvian-capital-share-investor-visa-residence-permit-by-investment)you wish to invest into.

Question 3

Q: What happens to my residence permit if Latvian company does not comply with the mandatory annual tax payments of Euro 40,000 ?

Accepted Answer

Ans: You can lose your residence permit as a Capital Share Investor in Latvia, if the business you are investing into, does not fulfill its annual tax obligations at Euro 40,000 per year, minimum.

This is the reason, why we carefully examine the company we recommend.  No business is  risk-free. However, you can reduce your risk by understanding the business mode, its tax history and future prospects. While we do not guarantee that company will never be in trouble, we are usually confident that company will continue to pay its mandatory taxes.

Different types of terms can be agreed with the company owner in terms of a partial refund of invested capital, in case the company cannot maintain your residency for tax reasons.

Depending on the category of business, your risk exposure can be mitigated.

Question 4

Q: Can I qualify for Latvia residency permit by investing capital into my own business ?

Accepted Answer

Ans: Yes. You can incorporate your own company, bring in Euro 50,000 or more capital into your own business and request a residence permit as the Capital Investor.

However, after getting your residence permit, you must also appoint yourself as a Director / Manager of your own business,  or hire another person to work in the business.

You will pay your own taxes and for anyone you hire to work in the business.

These and any other taxes, annually, from first year, should be Euro 40,000 or more.

If you have a clear business plan for Latvia, you can come and execute this plan. However,  the Euro 40,000 per year tax requirement should be met every year, until you become a permanent resident.

If you feel you cannot, then its best to invest into another successful company that is capable of meeting these requirements due to a number of years of business experience and turnover.

We understand that trusting another business owner is difficult.  We have done our best to match and refer our clients to good businesses, where we know the owners for the past 8-10 years and have carried out our due diligence.

This is the reason that you hire Proserve, to help you connect the right dots.

Question 5

Q: If I get a residence permit as a Capital Share Investor in Latvian company, can I do my own business on the side ?

Accepted Answer

Ans: If you have invested capital into a running business in Latvia, a company that pays the Euro 40,000 in taxes annually, you will be granted residency permit.

You residence permit cards mentions, "free to work without restrictions"

What this means is that you can either find employment or work for your own business, based on a work contract with any Latvian employer or your own company. Or you can register yourself as a Self Employed person, after understanding the tax requirements of each of these options available to you, from a public accountant and tax advisor. We can refer you to one, once you have secure a residence permit.

Question 6

Q: As a capital share investor in Latvia, what do I need to know about maintaining and upgrading my residency status in Latvia?

Accepted Answer

ANS: Once you have secured a residence permit in Latvia as an investor in any type of eligible investment route,  understanding the residency requirements in Latvia is crucial for your business and personal planning.

There are two aspects to understand here.

First, to maintain your temporary residency status, you must visit Latvia once every year to get a new residence card. This renewal process typically takes three working days and must be repeated annually.

Second, if you aim to upgrade to permanent residency, both the investor and each dependent family member must move permanently to Latvia.

During the next five years, you are allowed a total of 365 days of absence, however never exceeding 183 days at a stretch. That means, ok for annual trips to meet the grand parents, but not for long.

A Latvian language exam at level A2 must also be passed and a certificate attached to your application for permanent residence, along with a bank balance certificate showing enough  subsistence funds for at least one year, or proof of income within Latvia.

Proserve can assist you in meeting these requirements smoothly, ensuring compliance and a seamless transition to permanent residency.

Question 7

Q: As a Latvian capital share investor, is my family and I eligible for Government health care and free education for children's ?

Accepted Answer

Ans: A Capital Share investor or any other type of investor, is not necessarily a Tax Payer in Latvia. A tax payer in Latvia is eligible for national healthcare services and free schooling up to higher secondary level.  However, an investor is not automatically a tax payer.

Once must become a Tax Payer, and this can be achieved by setting up a business or self employment in Latvia, getting a salary and paying all applicable taxes. Even at the minimum level.

Proserve is not a Accounting Firm or a Tax Planner.  This answer must not be construed as Tax Advice. However, we are able to refer you to our associated Tax Advisors to help you understand this aspect better and make the best of the Latvian support system.

Question 8

I have more questions

Accepted Answer

We suggest a private consultation with one of our experts.

Trusted Consulting in Latvia since 2018