Latvia is a member-state of the European Union, which is why licences for importing goods to Latvia are needed only when importing from third countries. Below, you will find a table of goods that require submitting an import licence upon entering Latvia from a non-EU country.

CN (Combined Nomenclature) code Product Description/comments Net amount
1006 20 Rice Husked rice 1 000 kg
1006 30 Rice Semi-milled, milled, glazed and polished rice 1 000 kg
1006 40 00 Rice Broken rice 1 000 kg
1701 Sugar - -
ex 1207 99 20
Hemp seeds Hemp seeds for planting/sowing -
1207 99 91
Hemp seeds
Hemp seed for purposes other than planting/sowing -
5302 10 00
Linen and hempl Non-processed or retted (soaked in the process of industrial processing) hemp -
0703 20 00
Garlic and onions Raw garlic -
ex 0703 90 00
Garlic and onions Other onions (Allium spieces) -
ex 0710 80 95
Processed garlic and onions Frozen garlic and Allium ampeloprasum onions, both processed (stramed or boiled) and non-processed -
ex 0710 90 00
Processed garlic and onions Frozen vegetable mixes that contains garlic or Allium ampeloprasum onions, both processed (stramed or boiled) and non-processed -
ex 0711 90 80
Processed garlic and onions Frozen garlic and Allium ampeloprasum onions processed for short term preservation -
ex 0711 90 90
Processed garlic and onions Frozen vegetable mixes that contains garlic or Allium ampeloprasum onions, that have been processed for short term preservation -
ex 0712 90 90
Processed garlic and onions Non-processed minced garlic and Allium ampeloprasum onions, as well as non-processed vegetable mixes that contain garlic or Allium ampeloprasum onions -
ex 2207 10 00
Alcohol of agricultural origin Denaturated ethyl alcohol (volume of at least 80%) 100 hl
ex 2207 20 00
Alcohol of agricultural origin Denaturated ethyl alcohol or other spirits made from any products mentioned in the Annex I of the Regulation (EU) No 1308/2013 100 hl
ex 2208 90 91
Alcohol of agricultural origin Non-denaturated ethyl alcohol with volume of less than 80% made from any products mentioned in the Annex I of the Regulation (EU) No 1308/2013 100 hl
ex 2208 90 99
Alcohol of agricultural origin Non-denaturated ethyl alcohol with volume of less than 80% made from any products mentioned in the Annex I of the Regulation (EU) No 1308/2013 100 hl
Combined Nomenclature codes
The Combined Nomenclature (CN) codes are a system of markings developed by the European Union for the purpose of marking goods. It is used both for statistics and classifying goods. The CN codes allow distinguishing between goods in a compact and precise way. They can also be used alongside non-official descriptions of products in order to provide references in case the descriptions are inaccurate or otherwise difficult to understand.

The Baltic Sea region is the fastest growing business region in Europe. The trade flow among the states in this region has been steadily increasing year by year. The taxation system of Estonia is considered one of the most liberal taxation systems in the world. In 2000, Estonia implemented a comprehensive tax reform with an aim to create the simplest, most comprehensible and most convenient taxation system possible. The main advantage of Estonia is the low-tax system that can be described as a simple system with no hidden surprises and that was basically established to promote business and increase profits.

The taxation system of Estonia includes state taxes stipulated by the tax legislation and local taxes imposed by local governments or city councils in the respective territories according to laws and regulations.

The state taxes are the following:

excise duty;
income taxes;
gambling tax;
value added tax;
land tax;
social tax;
customs tariffs;
heavy goods vehicle tax.
Corporate income tax
As a result of reforms, the main benefit of entrepreneurs was the exemption from the corporate income tax in the event of reinvesting the profits. Thus, Estonian enterprises must pay the income tax only on their distributed profits, namely, dividends. The corporate income tax (tax on distributed profits) is 21 % of gross dividends.

This taxation system is conceptually different from the classic income tax system, because the tax is levied on distributed profits (also hidden distributed profits) instead of company profits.

Value added tax (VAT)
The value added tax payers are enterprises the taxable supply (except for import) of which does not exceed EUR 16,000 during a calendar year. The tax is levied on transactions with goods and services in Estonia and on the import of goods. The tax rate is 20 % of the taxable value.

The taxable period is one calendar month, and the value added tax must be paid into the state budget by the twentieth day of each month. The tax is fully paid into the state budget.

The registration of enterprises is carried out by the Tax and Customs Board also administering the VAT levied on domestic goods and services.

Personal income tax
In 2010, the tax rate is 21 % of taxable income, and residents must pay the tax on their income received both inside and outside Estonia. The taxable income includes the income from employment (salary, wage, bonus and other remunerations), business income, interest, royalties, rent, capital gains, maintenance support, pensions, scholarships (except for scholarships paid from the state budget or pursuant to law).

Social tax
This tax is imposed to ensure state pensions and health insurance. It is paid by legal persons, natural persons and non-residents with regular income. The tax rate is 33 % of the taxable amount. The tax must be calculated monthly, and a corresponding amount of money must be transferred no later than by the tenth day of each month.

Since 1 January 1999 the social tax payments have been personalised, and they form pension funds which will be considered in each specific case. The tax is accumulated in a special account of health and pension insurance funds within the state budget.

Excise duty
In Estonia, the excise duty is levied on tobacco, alcohol, fuel, packaging and vehicles.

The excise duty helps to control the amount of a specific product or provision of a specific service seeking to adjust the consumption of domestically sold goods.

Like value added tax revenues, also excise duty revenues are affected by changes in domestic demand, increase in imports of excise goods, as well as changes in excise duty rates.

Since January 1, the Latvian banking system has been part of the Eurosystem, so the principles of the Eurosystem apply.

In order to achieve the price stability objective, the Eurosystem uses a range of monetary policy instruments and procedures. The strategy targets the level of money market interest rates needed to maintain price stability over the medium term, while the policy sets out the means by which the relevant interest rate levels can be achieved through the application of available monetary policy tools and procedures. The ECB controls short-term money market interest rates through its decisions on the key ECB interest rates, which reflect the ECB's monetary policy stance and have an impact on the free liquidity in the money market.

Based on the available information on recent economic developments, the ECB needs to assess their impact on future risks to price stability. The monetary policy strategy followed by the ECB when analyzing macroeconomic developments is based on two pillars.

The first pillar includes an analysis of many economic and financial variables with potential implications for price stability in the short or medium term.
The second pillar comprises an analysis of monetary aggregates, which points to the leading role of money in maintaining price stability and focuses on a longer-term perspective.
Both strategic pillars of the Eurosystem aim to ensure an in-depth analysis of monetary, economic and financial developments across the euro area. This detailed analysis allows the ECB to set the key ECB interest rates at levels that are most appropriate to foster price stability in the euro area as a whole.

The EU or the European Union is a political and economic union of several European countries (currently 28 member-states), that includes most of the jusridictions on the continent. The EU has developed in is actively promoting a range of policies aimed towards bringing the member-states together in all respects, as well as making their cooperation easier. These policies include:

common internal market
standardised system of laws
non-restrictive travel area
common visa policy
free circulation of goods and services
free movement of labour

Additionally, these benefits can also be enjoyed by the family members of said immigrants - the EU has many policies that allow family members to obtain residence permits easier, involving fewer documents and employing simplified procedures.

History
The history of migration in the modern European Union begins with the end of the World War II, and is based on the idea of a unified, borderless Europe. However, this idea or, more loosely, an idea of a European unity, has been present even before that.

Before the end of World War II
The ideas of a united Europe before the 20th century (1949, when the Council of Europe was established, in particular) have been expressed by dynastic unions, empires and country-level unions, who often presented themselves as the "heart of Europe", the ones who embodied the political essence of the continent. The notable examples of such entities would be the Holy Roman Empire, the Polish-Lithuaniuan Commonwealth and the Austro-Hungarian Empire.

the painting named queen europeNotably, some thinkers have also expressed the idea of Europe being united not under the banner of a specific country, kingdom, etc., but as a sovereign power in itself. Thus, for example, a German cartographer Sebastian Münster in his 1570 work "Cosmographia" presented a painting named "Europa regina" or "Queen Europe". In this painting, the countries of Europe are depicted borderless and united into a single entity, whose borders roughly corresponded to the borders of Europe the continent.

On May 2, 2012, the Cabinet of Ministers revised 3 draft regulations related to residence permits, the procedure for approval and drafting of an invitation letter and the procedure by which foreigners and their family members enter and reside in the Republic of Latvia.

According to this, legal entities inviting officials registered in the Commercial Register must provide fewer details in the application for the letter of invitation, but those who employ natural persons on the basis of an employment contract must also submit documents confirming that such invited foreigners are taxpayers. The electronic service "Approval of the invitation to apply for a visa" will be available only from January 2, 2014.

These draft regulations align the regulatory framework for immigration with previous changes. Since July 26, 2011, the entry “Komercdarbība (business transactions)” (in the residence permit) or “Business” (in a visa) has been included in the residence permit or visa of officials entered in the commercial register (board members, managing directors, managing directors or liquidators). , and separate work permits are no longer issued. Therefore, a foreigner does not need to obtain a separate work permit for each type of company in Latvia. In the future, employment information will not be included in the work permit register, so these officials do not need to provide information about the scheduled working hours and do not need to come to the Office of Citizenship and Migration Affairs to obtain a work permit, since the endorsement in a visa or residence permit of theirs proven existence.

In addition, information about the level of education, country of origin, length of stay and employment rights of the foreigner are included in the residence permit register. As a result, no documents to prove the level of education have to be submitted again if a foreigner is questioned repeatedly or if the residence permit is registered. If a document proving the intended place of residence in the Republic of Latvia was presented upon confirmation of the invitation, it does not have to be submitted later.

These changes require any inviter who invites an individual to work on the basis of an employment contract to provide proof that the individual is registered as a taxpayer and has no tax liability, except in cases where this information can be obtained public information system.

If the residence permit in Latvia is issued as an electronic ID card, it is not attached to the foreigner's travel document or is issued as a separate document - ID card - instead of in the form of a sticker. In the next 5 years, when the foreigner will have two types of residence permits - stickers or cards, if the foreigner has a residence permit, the foreigner must present the new travel document to get a new residence permit, but a foreigner who has an identity card , only needs to present the new travel document so that the Office for Citizenship and Migration Affairs can update the information in the population register.

The draft decree stipulates that the application for the letter of invitation can only be submitted by a foreign legal entity that has registered an authorized person, a branch or an agency in the Republic of Latvia.

Currently, labor rights are not transferred to family members of foreign investors; However, family members of foreign investors (spouses) now have the right to be employed by any employer. The possibility of obtaining an identity card is available to EU citizens residing in the Republic of Latvia with a registration certificate.
The procedure for approving and drafting the letter of invitation and the regulation on the residence permit in Latvia came into force on May 9, 2012, but the amendments to the regulation on the work permit for foreigners will be reviewed at the meeting of state secretaries.

The concept of outsourcing some activities relating to the company’s day-to-day operations has proved to be an effective method of improving performance in many countries. Many companies have found it beneficial to eliminate all departments that are not directly related to their primary line of business: sales, production, or services.

We offer accounting services to small and medium businesses(service of accounting in Latvia, Lithuania or Estonia only) providing efficient and friendly service offering cost effective solutions for your accounting and payroll-related needs in any of Baltic states. We realize full financial analysis of accountancy and timely notification to manager about any risk which endanger successful development of business. We manage making accounting reports, all necessary accounting documents related to Latvia and delivering them to State revenue service, Central Statistical Bureau and other institutions of the Republic of Latvia.

Our accounting in Latvia services include:
Financial accounting and reporting
Accounting for special purposes (payroll accounting, accounting in the client's system, assistance to foreign clients in the completion of VAT returns etc)
Preparation of annual accounts
Preparation of regulatory documents (i.e. internal accounting rules)
Communication with the Tax Authorities
Complete management of the company's accounts
Day-to-day accounting advisory services
We continue to co-operate with the client beyond doing the books and reports. At this stage our services include, but are not limited to, supervision of bookkeeping activities performed by the client and assistance in solving accounting problems.

Our services also include:

Ad hoc assistance for internal finance personnel, finance controllers and management on accounting and tax issues
Assistance during statutory or internal audits
Conducting regular reviews of accounting documentation and procedures
Implementation of a model for accounting transactions in the single currency used by the group
Implementation of a reporting model for group reporting purposes
Development of a methodology for drawing up and controlling the company’s budget

The main business risks faced by entrepreneurs in Latvia are related to the centralization of resources, demographic problems and corruption. Neither is of great importance, but combined with other adverse circumstances can pose a significant risk, possibly even leading to bankruptcy. A for minor risks, there are some logistical crime and petty crime concerns in certain areas.

Big risks
In Latvia there are three major business risks that can affect companies in all parts of the country:

resource centralization
demographic issues
corruption
Individually, they don't pose much of a threat, especially to established foreign companies. These risks are minimal for foreign companies based in Riga (the capital of Latvia), apart from a few cases of corruption. However, the further away from the capital, the clearer the risks, which is somewhat offset when the geography of the business includes cities of regional importance.

Resource centralization
Almost a third of the companies registered in Latvia are headquartered and operate mainly in Riga. Although this somewhat reduces competition in more distant areas, it also means that most of the resources, finance, labor and customers are also concentrated in Riga. In addition, most of the universities are located in the capital, which means that the majority of students – qualified young specialists – are not available in other regions or have to be persuaded to move to these other regions through additional benefits.

Even if a foreign company itself is also registered, has its headquarters and operates mainly in Riga, centralization can pose challenges for expansion. Sometimes it is not possible to open branches in other regions of Latvia due to the above restrictions. In this case, the only way to expand is to provide services and products remotely/digitally, or to specialize in services that don't require physical interaction. Another option is to build a nationwide logistics network that delivers products and services. Thanks to Latvia's small size, this is not the most difficult task, but it still requires time, investment, manpower, planning and other resources, which can limit other aspects of business development.

Demographic issues
As of now (2016) Latvia's demographic problems are not so significant, but still noticeable. According to the Latvian Central Statistical Office (Latvijas Centrālā statisticas pārvalde), the Latvian population began to decline in 1991, and over the years the rate of decrease slowed until the 2008 financial crisis, when for a brief moment the rate picked up again. Now the rate is falling again: every year since 2010, when the country started to revive its economy, Latvia loses about 5% - 10% less than every year before.

Despite this, the decline is still there and most notably among young people, professionals with higher education prefer to look for a job abroad. At this rate, the decline will level out in about 10 years. Until then, the drain of potential labor and customers hinders the operations of any business, especially in the long term.

Corruption
Corruption in Latvia is mainly related to the need to maintain good personal contacts with business partners and to participate in extra-professional activities, without which reaching an agreement can be problematic in some cases. This is particularly important in the early stages of market entry. It is very important to build a good first contact relationship with the local business people and organize meetings with local suppliers. Otherwise, settling in Latvia can become problematic.

As a rule, the owner of a property cannot be determined from the property alone. Disputes involving tangible property are less frequent and the value of tangible property is rarely significantly high. The situation is different with real estate. A person's rights to immovable property are part of the constitutionally protected rights to property, including the right to housing. The mechanism for ensuring a person's rights to immovable property is an integral part of enforcing Latvia's democratic principles. In Latvia, this mechanism is implemented through land registers.

The updated Land Register Act 1937 came into force in April 1993. It recognizes the mechanism of confirming immovable property or registering ownership rights in the land registry. The system of acknowledgment or token transfer requires that the legal basis for obtaining ownership rights be in writing. Accordingly, the beneficiary is entitled to require the person selling the property to take all actions necessary for the entry of the transfer of the property in the land register.

Only someone who is entered as the owner in the land register can be recognized as the owner. Until the entry in the land register, the purchaser of the property has no rights against third parties: he may not use any of the benefits associated with the property and must enter all actions related to this property by the registered person as the owner in the land register as effective.

The registration procedure can be divided into the following phases:

Preparation. In this phase, one or both parties to a legal transaction become aware and express the desire to conclude the relevant real estate transaction and inquire about the possibilities of implementation.
signing a contract. The parties agree on and sign a contract, as well as other necessary measures to ensure that the terms of the contract are in line with existing laws and regulations, i.e. so that the property can be registered in the land register.
pre-registration phase. At this stage, all the necessary documents to register the transaction in the land register are prepared or received.
Registration (or Waiver) of Ownership. This phase begins with the submission of an application for registration to the land registry and ends with the decision of the judge.
last stage. The aim of the transaction will be fully achieved and the institutions named in the relevant laws and regulations will be informed.
If new property has been created or the content of the property changed as a result of the contract, the following additional steps are required:

Indication of immovable property. At this stage, new objects of immovable property are created – plot units, structures, buildings, plot groups or changes are made to existing objects.
formation of immovable property. At the proposal of the owner, a new plot of land is created from the existing or newly created immovable property or the content of plots of land is rearranged.