Open Subsidiary vs. Branch Office in Latvia

Foreign investors choosing to establish their business operations in Latvia may open new companies or branch offices. Our lawyers in Latvia will provide relevant information about the possibilities each of the two types of companies offers. This article presents updated information about branches and subsidiaries in Latvia.

Requirements for opening a subsidiary in Latvia in 2026

Foreign investors may choose to register a subsidiary in Latvia in the form of a limited liability company. One of the greatest advantages of opening subsidiaries in Latvia is the limited liability of the shareholders, but also the taxation system that does not impose taxation of dividends, interests, and royalties when they are repatriated to the parent company.

A Latvian subsidiary will also have its own management compared to a branch. As mentioned before, subsidiaries will be incorporated as limited liability companies that in Latvia can be private or public. No matter the type of limited liability company foreign businessmen decide to register, there are minimum share capital requirements for both types. The most employed type of structure will usually be the private one, as it requires a start-up capital of EUR 2,800.

Compared to the Latvian branch office, the subsidiary is required to have a certain form of management that will include a director or board of directors and a supervisory board in the case of public limited companies. Subsidiaries are also required to register for taxation purposes and with the State Revenue Service if hiring personnel.

If you want to open a company in another country, such as the UAE, we can put you in touch with our partners who are specialists in company incorporation in Dubai. The incorporation of a company in Dubai takes 1-3 weeks compared to 4 weeks in Latvia.

The branch office in Latvia

Compared to the subsidiary, it is less demanding to set up a branch office in Latvia in 2026 because branches are not deemed legal entities. Branch offices in Latvia will depend on the parent company, which means the mother company will be held liable for the branch office’s liabilities.

Branches are not allowed to carry out any business operations in Latvia unless they register with the Companies Registrar.

Once the branch office registers with the Trade Register in Latvia, it will have to register with the tax authorities as well. Branch offices may hire personnel and conduct business operations just like the subsidiary, with the only difference the branch office is an extension of the foreign company.

Other considerations about branches and subsidiaries in Latvia

Branches in Latvia present varied advantages because the country is a member of the European Union and Organization for Economic Cooperation and Development, and the World Trade Organization. International entrepreneurs can confidently establish branches and subsidiaries in Latvia and develop their economic activities in a safe and stable business climate.

Foreign entrepreneurs from non-EU countries interested in incorporating a branch in Latvia must consider the immigration requirements. In this sense, the type D visa should be attained if the business extends for more than just 3 months in Latvia. This is a national long-stay visa, not a Schengen (type C) visa, which grants free travel throughout the Schengen area.  

Business updates for Latvia in 2026

If you want to start a subsidiary or a branch in Latvia in 2026, it is good to be up to date with the latest news in the business climate. Here is what to keep in mind this year if you are an entrepreneur:

• Starting in 2026, enterprises in Latvia with only individual shareholders will pay a new voluntary tax. This is set at 15% CIT and imposed on distributed profits. Moreover, a 6% PIT will apply in 2026 to dividends of such types of companies in Latvia.
• VAT changes were introduced in Latvia in 2026. From 1 July 2026 to 30 June 2027, bread, milk, poultry meat and eggs are subject to a reduced 12% VAT rate (fresh fruit, berries and vegetables were already at 12%), while qualifying books and periodicals in Latvian and other listed languages are taxed at 5%.
• Latvia is in the process of digitizing public services, like many countries in the European Union. This digital transformation targets financial, trading, and other important business sectors where the implementation of various AI technologies to cut as much as possible the administrative burdens is expected.

You can contact our attorneys in Latvia for personalized solutions for company registration. You can also consult with our lawyers if you are interested in acquiring Latvian citizenship by investment. Our lawyers can guide you in detail about its requirements.