Latvia: Business Environment

Accounting Rules

Tax Year

The fiscal year begins on 1 January and ends on 31 December of the same year.

Accounting Standards

Since 1 January 2005, all consolidated accounts must be drawn up in conformity with European accounting standards IAS/IFRS.

Accounting Regulation Bodies

Ministry of Finance, Acounting Council

Accounting Reports

A company's accounts must clearly reflect its operations and its financial results and give a precise and faithful picture of its financial situation.

Amounts are given in Latvian currency. The documents are in Latvian. If a member of a company is not a natural person or a legal entitiy of the country (registered company), it is possible, with the agreement of the parties concerned, to use a second language, that the auditors deem to be acceptable. The accounting documents and the supporting documents that accompany them must remain on Latvian territory. Any accounting entry must be supported by an appropriate document.

The accounting year spreads over 12 months. It corresponds to the civil year, but the shareholders can choose other dates. Companies that form a group must have identical accounting years. This year can be modified, but the modification must be justified and explained in the notes attached to the annual report.

A company's financial statements must include a balance sheet, a profit and loss account, notes to the accounts and an annual report.

Publication Requirements

In the event that the company exceeds two of the criteria listed below, the annual reports must be audited by a certified auditor or by a firm of certified (sworn) auditors, duly elected by the shareholders:
- Total assets: LVL 250,000 (EUR 356,000);
- Net turnover: LVL 500,000 (EUR 711,000);
- Average number of employees in the reporting year: 25

Moreover, the European Directive of 19 July 2002 obliges all European companies listed on the Stock Exchange to establish their consolidated annual accounts on the basis of IAS/IFRS.

Professional Accountancy Bodies

LACA , Latvian Association of Certified Auditors

Certification and Auditing

If two of the indicators below go over the indicated amounts, the annual report must be examined by an auditor or by an officially designated accounting audit body, chosen by the shareholders:
- total capital: LVL 100,000 (EUR 170,000)
- net turnover: LVL 200,000 (EUR 340,000)
- average number of workers during the accounting year: 25.
You can contact an extenal auditor in the list below:
KPMG, Deloitte, Ernst & Young, PricewaterhouseCoopers, Leinonen.

Accounting News

LACA News

Tax Rates

Intellectual Property

National Organizations

Consult the Patent Office of the Republic of Latvia. The application for the grant or registration of a patent can be done in the language of the country, in English, in Russian or in German. These applications have to be addressed to the patents office in Latvia, either directly or through the intermediary of a legal representative. The related law of patents was voted in 1993 and as for trademarks, the law was passed in the same year.
Latvian law is very similar to French Law but the protection of intellectual property rights will be consolidated in the near future.

Regional Organizations

In Latvia there are several non-governmental organizations which defend intellectual property, such as, for example, the association LIVA .

Legal Framework

Independence of Justice

The Constitution of the country provides for an independent judiciary and the government generally respects this freedom. But judicial reforms are slow and prone to corruption.

Equal Treatment of Nationals and Foreigners

Foreign nationals can expect an impartial trial from the country’s judicial system.

The Language of Justice

The judicial language in the country is Latvian.

Recourse to an Interpreter

Having an interpreter is possible.

Sources of the Law and Legal Similarities

The main source of the law in the country is the constitution of 1922 (amended in 1998); the legal system is based on a civil law system. Latvia being a member of the European Union (it joined the EU in May 2004), the national law in the country has to comply with the conditions of the Community legislation.

Checking National Laws Online

Latvian laws on line (website in Latvian)

Standards

National Standards Organizations

LVS, Latvian Standardization Organization

Integration in the International Standards Network

The Latvian standardization organization (LVS) is member of European Committee for Standardization (CEN), of European Committee for Electrotechnical Standardization (CENELEC), of International Organization for Standardization (ISO), of International Electrotechnical Commission (IEC), of European Telecommunications Standards Institute (ETSI) and of International Telecommunication Union (ITU).

Classification of Standards

To get further information about terminology and standards in Latvia, you can visit the LVS Latvian Standards website.

Online Consultation of Standards

Catalog of Latvian Standards

Certification Organizations

LATAK The Latvian National Accreditation Bureau

Business Practices

General Information

Worldbiz, Worldwide Business, choose Latvia

Opening Hours and Days

Offices: open from 9 am to 6 pm (Monday to Friday). They close on Saturday and Sunday.
Shops: open from 10 am to 7 pm (Monday to Friday). On Saturday, shops open from 10 am to 5 pm. Shops sometimes also open on Sunday.
Banks: open from 10 am to 2 pm and from 3 pm to 5 pm (Monday to Friday). They close on Saturday and Sunday.
Administrations: open from 10 am to 5 pm (Monday to Friday). They close on Saturday and Sunday.
Supermarkets: open from 8 am to 10 pm (or even midnight) all week.
Some groceries and pharmacies stay open 24/24.

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