Individual merchant (IM) is also popular business form in Latvia, but not so popular as Limited Liability Company.
Important facts about individual merchant in Latvia
Individual merchant is natural person, who is registered in commercial register of the Register of Enterprises. Individual merchant according to Latvian legislation is responsible for his obligations by all his property, it means – unlimited financial and legal responsibility. Owner or Individual merchant who is registered in commercial register of register of enterprises is the same person.
Tax system for Individual merchant is not very favourable in comparison with Limited Liability Company (for example, higher income tax rate; some amount and/ or some kind of expenses can’t be deemed as business expenses. It is allowed for Individual merchant to choose different taxation status and to it become as Micro-enterprise tax payer.
As Individual merchant has no share capital, it can’t be sold. It is possible only liquidate Individual merchant.
Individual businessman must register his business in the Register of Enterprises as Latvian Individual merchant if at least one of following point is executed:
– annual turnover of commercial activities exceeds 284.600,- eur or;
– commercial activities conform with activities of commercial agent or;
– commercial activities conform with activities of realtor estate agent or;
– annual turnover of commercial activities exceeds 28.000,- eur and
– person at any time employs more than five employees.
Share or equity capital
There is no share capital or equity capital for Individual merchant.
Legal address of Individual merchant must be located only in the Republic of Latvia.
Founders and Owners of Latvian individual merchant
– Founder and only owner is the same natural person.
Individual merchant is managed by owner – himself.
Legal status of Individual merchant is natural person.
Individual merchant according to Latvian legislation is responsible for his obligations by all his property, it means – unlimited financial and legal responsibility.
Registration process of Individual merchant in Latvia
All registration process of Individual merchant consists of following:
– collection of necessary information for Individual merchant registration;
– preparing foundation documents for Individual merchant registration;
– signing of documents, also at notary;
– payment of state fees for registration Individual merchant and for publication official newspaper;
– document submitting to the Register of Enterprises of the Republic of Latvia;
– registration of Individual merchant in the Register of Enterprises of the Republic of Latvia and receiving documents.
Documents to submit to the Register of Enterprises of the Republic of Latvia for registering Individual merchant in Latvia
To register Individual merchant in Latvia one must submit following documents to register of enterprises:
– Application Form for company registration;
– Proof of payment (receipt) of state taxes for Individual merchant registration;
– Proof of payment (receipt) for publication in official newspaper “Latvijas Vestnesis”
Necessary information for registration Individual merchant in Latvia
To register Individual merchant in Latvia and to prepare documents we need following information:
– Name for Individual merchant in Latvia;
– Legal address of Individual merchant (Legal address for company in Latvia can be only in Latvia. We can provide you with legal address for company. Check section: Business support services);
– Information about private person who will Individual merchant;
– any other important information you wish to show.
Reports to tax office
VAT registration – If Individual merchant in Latvia plan to export goods, services or turnover of Latvian company during previous 12 month exceeds 50.000,00 EUR, then company is obliged to register as VAT payer in VAT register.
VAT report – there are various situations about VAT report submitting periods – every month, once in a 3 months, once in 6 month. Write to us about your situation and we will shortly explain it.
Annual report – Individual merchant is obliged to submit annual report one time in a year.
Bank account for Individual merchant
According to Latvian legislation Individual merchant registered in Latvia can open bank account in any commercial bank in Latvia or in any other country. If bank account of Individual merchant in Latvia is opened in bank in other country then it must be reported to tax office.
So you can open bank account in any Latvian commercial bank and manage it via online banking (internet-bank) and use Visa or EC/MC debit or credit card.
In some commercial banks in Latvia – it is possible to open bank account remotely on basis of Power of Attorney (POA).