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17Jul
How to Open an IK in Latvia?
Individual Merchant (Individuālais komersants) in Latvia is a natural person who conducts entrepreneurial or economic activity on their own behalf. The official IK status is granted after registration in the Commercial Register. All nuances of how to open an IK in Latvia and operate it are known by the specialists of the international legal company Maira Consult.
IK in Latvia is analogous to the Ukrainian sole proprietor, with some differences:
- the status of a legal entity is not granted in the Register;
- liability for debts and obligations extends to all personal property of the individual;
- has the right to hire employees.
Registering as an individual commercial entity allows you to start a business from scratch with minimal financial and time expenditure. Unlike other business forms, IK requires the owner to comply with a minimum of bureaucratic regulations. Along with other entrepreneurial forms, the individual merchant has full access to the European market, a high competitive status, and the right to earn barrier-free in international trade.
Step-by-step algorithm to open an IK in Latvia
To register an individual merchant in Latvia, you need to follow a few simple steps shown in the table below.
| Actions during IK registration | Features |
| Name selection | A unique name in the Register is a mandatory condition for registering a new IK. To check the name, you must use the state Company Register, where the name is directly reserved until the moment of official registration. The name must contain the abbreviation “ik,” which is allowed both at the beginning and at the end of the name. |
| Submission of documents | The application for IK registration is submitted to the State Agency, where it is reviewed within 1-3 working days. The application includes: personal data of the individual entrepreneur; types of economic activity with reference to their codes; legal address (home address, virtual or real office, coworking); name of the business entity. Business registration is possible remotely on the Latvija.lv portal using eParaksts (electronic signature), by sending a letter by mail, or personally visiting the Latvian Republic’s Enterprise Register office. |
| Payment of state fee | A stamp duty of 30 euros is charged during business registration. |
| Contribution of share capital | Legally, there is no approved minimum share capital for IK. However, to launch the business idea, it is recommended to deposit starting capital into a bank account. |
| Tax regime selection | In the classic form, all IK pay taxes under a simplified taxation mechanism. The choice of tax regime occurs after approval of the IK registration. |
| Obtaining a tax number | Tax payment is mandatory for individual merchants. For financial reporting and tax payment purposes, the IK applicant submits an application to the Tax Service, after which the entrepreneur receives a Latvian tax number. |
| Obtaining a VAT number | If commercial activity requires VAT payment, the entrepreneur must register a VAT number and submit the corresponding reports. |
Unlike other business structures in Latvia, IK registration does not require expenses on notary services, developing a Statute, or apostille stamping of documents.
Opening an IK is beneficial for those who plan to provide services to the population (repair work, plumbing, carpentry, electrical installation), work freelancing, or earn from retail trade. If the business has high risks and requires an increased level of responsibility, it is recommended to consider a form of employment that limits the size of obligations within the share capital (SIA – limited liability company). Detailed information on when it is beneficial and how to open an IK in Latvia can be obtained in consultation at the Maira Consult agency.
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