Why Latvia
A corporate tax regime built to keep your money working.
Latvia's Corporate Income Tax system is fundamentally different from most of Europe. Instead of taxing profits the moment they're earned, it defers the burden until you decide to distribute them — and leaves reinvested profit completely untaxed.
Population
1.87M
2025 estimate
GDP
€46.3B
nominal, 2025
Active businesses
184,000
registered enterprises
New businesses opened
10,400
newly established companies in 2025
The 20% / 0% profit model explained
Latvian CIT applies to distributed profits (dividends) at a flat 20%. Profits that you reinvest — keep in the business — are taxed at 0%.
Distributed / Dividend model
20%- Flat 20% CIT applies only when profits are distributed
- Applies to dividends paid to shareholders
- No surtax, no additional cascading layers
- You retain full control over when you pay
Reinvested profits model
0%- Profit kept in the business is entirely tax-free
- Fund expansion, acquisitions or working capital
- Defer corporate income tax indefinitely
- One of Europe's most flexible profit-retention regimes
In practice: a company generates 100,000 EUR of profit. Reinvested, the full 100,000 EUR stays in the business — 0% tax. Distributed as dividends, a flat 20,000 EUR CIT applies and 80,000 EUR reaches shareholders. Compare this to a 25–30% tax on earned profit in many neighbouring jurisdictions.
More than just low taxes
Beyond the headline rates, Latvia offers a genuinely business-friendly environment.
EU membership & stability
Member of the EU, Eurozone, Schengen Area and OECD — a predictable legal and monetary environment that businesses trust.
Lowest administration burden
One of the Easiest in Europe to run a business. Fully digital administration, minimal reporting, quick registration.
Growth capital retained
The 0% reinvested-profit regime lets entrepreneurs keep nearly all earnings invested in growth, compounding faster than rivals.
International banking & fintech
Access to EU IBAN accounts and a broad fintech ecosystem — essential for cross-border e-commerce and services.
Explore the company structures available
From 1 EUR capital to full VAT-registered entities — there's a fit for every ambition.
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