As a freelancer to open a company in Latvia and what advantages it gives

1. Introduction

Hello everyone, my name is Vladislav, I am from Russia, and I am a freelance programmer. Now on Habré is a very popular topic - legal and tax issues when working with Upwork, how to receive and declare fees from foreign customers, and so on.



I also studied these questions for quite a while. Russian legislation on these issues is heavily regulated, and all these laws and regulations cause a lot of problems to freelancers working in a foreign market. In the end, I decided to transfer my “business” to another jurisdiction. Having studied all possible options, I chose such a way - to register a company Ltd. in Latvia, and accept payments from customers for this company. That is, just move your business from Russia to Latvia.
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I have been working in this format for a year now, I have encountered various problems and appreciated the pros and cons. In the end, I decided that in total I won from such a decision. In the comments to the articles about freelancing, I occasionally read questions like “how to work for customers from the USA”, “How to pay taxes on payments from Upwork”, and therefore I decided to share my experience, especially since I have never seen such articles anywhere .

2. Key findings and results

In short, the conclusions are:

1. Monthly expenses - from 150 euros if you are idle, and about 350-400 if the work goes well. This is not counting bank fees for payments and transfers, they are highly dependent on the bank. So it makes sense to transfer your freelancing to Latvia when you are already earning from $ 1000 per month, otherwise there is a big risk that you will not “pull”
2. The main plus is no currency control, accept payments from any countries of the world without restrictions.
3. Accept payments from both businesses and individuals. Immediately to a bank account. Online ticketing? No, have not heard
4. You can work with PayPal, receive payments and pay for services. Almost all my customers from the United States preferred not to bother with documents and banks, but simply to pay through PayPal, and nothing else. If you are a freelancer from Russia and you will rub a game about a SWIFT transfer, contracts, acts of completed work for currency control, etc., to an American customer, he will rightly send you away and choose a freelancer with a more convenient payment method
5. If we talk about the minuses, the main disadvantage is taxes. Since I am the founder of the company, I am also the director and pay myself the minimum wage. Together with the salary, I pay taxes on 200 euros every month. If you do not earn much, taxes will break through the sensitive gap in your budget.
6. The second minus is that at the initial stage you will often have to visit Latvia, solve any problems that may arise with the bank, with the State Revenue Service and with the accountant. Prepare money for airline tickets and make a multivisa-Schengen. On the other hand, Latvia is still easily attainable, I can’t imagine what I would do if I registered my company somewhere in Hong Kong or in the Bahamas
7. Another disadvantage is that you have to hire an accounting outsourcing firm to handle your business. Latvia has its own accounting laws, its own tax reporting systems via the Internet, plus all the documents in Latvian ... In general, I didn’t understand, and just found an accountant, keep a record for me. For accounting services, I pay 100 euros per month
8. As a bonus, you can write off some of your expenses to the company's expenses. From the company's account I usually pay for flights, hotels, electronics, hosting. If you are a freelance traveler, you can arrange yourself for a "business trip" and charge yourself a daily allowance. Just periodically bring your accountant all the checks, invoices, boarding passes, tickets, and you will be able to reimburse your expenses.
9. For the customer, you now look much more solid - not an IP in Russia, but a legal entity in Europe. You can make yourself beautiful business cards and distribute at conferences. Trifle, but nice
10. Register a domain and website for a company in Latvia, and you can forget about FZ-152 “About personal data”, about which there were many articles on Habré. Your site is now under the jurisdiction of the European Union. On the other hand, you now need to show a notification that your site uses cookies ...

3. How to start and stages

If you decide to register a company in Latvia, your route will be something like this:

1. Company registration (address, share capital, etc.)
2. Naim accountant
3. Opening a bank account
4. Getting a PVN number
5. Preparing PayPal, Upwork, Getting Started With Customers

All of the above may cost 800-1000 euros and take 2-3 weeks. Also, for the first couple of months, according to the law of meanness, there may be some kind of a hitch either with the bank, or with the State Revenue Service, or with something else. Therefore, I recommend having a Schengen-multi-visa and keeping close to Latvia, in order to break into it if necessary to solve the problems that have arisen. When all stages are completed, the first payments will go, the money will be successfully withdrawn - you can relax and freelance in Russia or anywhere in the world, visiting your accountant in Latvia a couple of times a year.

Well, first I will tell about all the stages in order, and at the very end of the article will be about the sweetest thing - the withdrawal of money.

4. Step by step

4.1 Company Registration

4.1.1 General Information

In Latvia, a company can be opened by any non-resident, there are practically no restrictions. The most popular form, an analogue of our LLC - SIA, Sabiedrība ar ierobežotu atbildību. In order to open a company, you need to have an address and share capital.

By the way, this is what a typical LLC charter in Latvia looks like (compare with the LLC charter in Russia):

4.1.2 Address

Address get no problem. There are many companies in Latvia that provide the services of the “Virtual Office”. You pay them and they register you at home, receive your mail for you, answer calls and confirm to everyone that your company is here.
You must obtain the owner’s consent for the registration of the legal address and an agreement for the provision of the legal address. As for correspondence, you need to arrange for them to notify you about the letters, and you need to inform the accountant that he take them periodically (I will write about the accountant below).

In general, in theory it is not very good that many companies are located at the same address, but as I understand it, this cannot serve as a basis for refusing registration. The consent of the owner of the premises is - it means the company will register you.

Also, when you make a virtual office, you can get documents for registering a company for a small fee - a statement, a charter, a decision on the establishment, etc. Choose a name for your company, select the type of activity. In my case, this is “Datorprogrammēšana”, “Computer programming activities” (62.01, version 2.0).
The legal address for me for the year cost 363 euros (300 euros + 21% VAT), and the paperwork - 50 euros. State duty for registration - about 22 euros. If I opened a company with a registered capital of 2,800 euros (see below), then the duty would be about 140 euros. Keep all the checks for services rendered, then you can write them off in expenses.

4.1.3 Share capital

The authorized capital must be 2,800 euros or more for a regular SIA or from 1 to 2,799 euros for a small capital SIA. In the second case, there will be some restrictions on the founders, restrictions on receiving dividends, you will not be able to obtain a residence permit through this company and some other trivia.
I have issued SIA with a registered capital of 100 euros. For small freelancing this is enough.

Subsequently, if you want, you can increase the share capital to 2,800 euros and remove the above limitations. Even if you do not have the full amount, you can replenish your account and immediately withdraw money "on a report." Your accountant will tell you in detail how to do this (I will write about the accountant below).

4.1.4 Company Registration

With all the documents go to the register of enterprises (Uzņēmumu reģistrs). There is a queue there, but the registry staff are friendly, they know Russian and will help you in case of anything.

Somewhere in 3 days the company will be registered. How to find out: go to the site Lursoft lursoft.lv and enter the name of your company in the search. If the company is found, then the company is successfully registered. Write down the registration number of your company. Now you can go to the bank to open a current account and apply for a VAT number.

You can apply for a company in 1 day, if you pay the state duty in triplicate.

4.2 Printing

You do not need to have a seal, but if you want to withdraw money through the IP in Russia, then for making payments through exchange control, you better make yourself a cool stamp. In Riga there are several companies that make prints, go to any of them. Personally, I just noticed the sign during my roundtrip in Riga. You will need the documents received in the Register of Enterprises. The cost of manufacturing a print of about 15-20 euros.

4.3 Taxes in Latvia

Taxes in Latvia are managed by the State Revenue Service (Valsts ieņēmumu dienests).
The most significant taxes for you that you will pay are payroll taxes. You are listed as the founder of the company and the only employee, and you must pay yourself a salary. And, of course, taxes on wages - income, social, unemployment tax. Every month, up to the 25th. I wrote about payroll taxes in the “paycheck” section below.
If you had a profit last year, then you need to pay income tax of 15% for the past, and the same tax in advance for the current year. If you have more profit for the year, then pay extra, if not - then you will get it back.

If you withdraw dividends, then you, as a resident of Russia, must pay dividends tax in Russia, and report this to the Latvian tax. I have not withdrawn dividends yet, so I can’t say the details, sorry.

There is also a value added tax (PVN - Pievienotās vērtības nodoklis), but it is charged only for settlements within Latvia. If your customers are not in Latvia (as it was in my case), then you do not pay VAT. However, you need to register as a VATN payer and get a PVN number, if only because it should be specified in the PayPal and Upwork settings. I will tell you about getting a PVN number below.

Taxes in general, that's all. More details about taxes, salaries and the PVN-number will tell you the accountant you hired.

4.4 Accountant

There are many companies in Latvia that offer accounting services and support for enterprises, as well as many freelance accountants. Choose anyone, focusing on the cost of services, reviews, personal sympathies, etc. I recommend doing this as early as possible. The accountant will advise you and help you avoid problems.
As I have already said, accounting services cost me 100 euros per month, maybe you will find an accountant a bit cheaper or more expensive.

Your interaction with the accountant will be as follows. At the first stage, your accountant registers your firm in the state electronic reporting system. To do this, you and the accountant together go to the State Revenue Service, where you must provide documents from the Register of Enterprises, as well as indicate the email address where notifications will fall. I recommend creating one email address specifically for the State Revenue Service and giving access to an accountant. Or redirect emails to an accountant.

After the electronic cabinet is set up, your accountant will hire you and will accrue working hours, salary and payroll taxes, and will report through this system, and also correspond with the State Revenue Service if necessary.

The State Revenue Service can send you regular letters to the legal address where your company is registered. You must agree with the accountant so that the accountant collects correspondence and responds to these letters. Do not ignore these letters, if you do not respond, your company may be closed.

The next thing an accountant has to do for you is to issue you a VAT number. This is also a small quest, I wrote about this in the next section.

When the company is registered, the PVN-number is received, the current account is opened, you will interact with the accountant approximately 1 time per month - you send the accountant all your statements and accounts (received and sent), and the accountant will write you which taxes on which details you need pay, and how much money you can transfer to yourself.

Also, if you need supporting documents that you are the founder of a company in Latvia and receive a salary (for a visa or for opening a bank account as an individual), the accountant will also request and prepare them for you.

And of course, the accountant will help you to write off expenses and withdraw money; more is written about this at the end of the article.

4.5 Registration of VAT number

After the company is registered, you must submit an application for registration of a PVN-number. This is done by an accountant through an electronic reporting system. Some time after you have submitted an application, the State Revenue Service will send a letter to your address with a request to come and tell about your business. Ignore this letter can not, you must come or arrange for another time.

At the appointed time, you and the accountant come to the State Revenue Service and a special employee interviews you, fills out a questionnaire about you and asks questions to make a decision on issuing a PVN number.

In my case, I already had a signed contract with the customer and freelancing experience in Russia. I came with a contract, brought an extract from the EGRIP that I have been in Russia since 2014 and have received my own tax declarations for the USN for 2014 and 2015. That was enough. The State Revenue Service employee was very polite and spoke good Russian. In general, civil servants in Latvia, in my opinion, are polite and friendly, and work well.

4.6 Bank

What really struck me was the banks.
I am used to Russian banks, where you are a welcome client and any bank will gladly offer you their services. Alas, in Europe it is not. In Latvia, banks will meticulously inspect you from all sides, forcing you to fill out 100,500 questionnaires, present proof of business activities.

For all the time of my work, it was not the state, but the banks in Latvia that gave me the most problems. In the bank, you will need to communicate with real people, you will prove to the manager that your intentions are clean, you will not launder money, you will not finance terrorism, and that your cooperation with the bank will benefit them.
I do not know if all banks in Europe have such an attitude towards non-residents. The only thing that can be put in plus banks in Latvia is that you can talk to a bank officer in Russian, here also many Russians do business, so it becomes a bit easier to negotiate. If I opened a business in another European country, maybe I would have even more questions.

As in the case of an interview for obtaining a PVN number, it helped me that I had experience as a freelancer in Russia and that at that time I already had an agreement with the customer. I submitted the contract and my tax declaration for 2014 and 2015 at the bank. If you do not have a contract, I do not know what you can show ... Maybe a business plan, or an extract from Upwork, or previous contracts that you entered into as an IP in Russia. As I said, real people work in the bank, try to find a way to convince them.

Theoretically, it is not necessary for you to open an account in a Latvian bank; by law, you have the right to have a current account in any bank in the territory of the European Union. But this is theoretically, and in my case I applied to one bank in neighboring Lithuania, and the managers, having considered my package of documents, refused - they say that you do not conduct business in Lithuania, you have contractors not in Lithuania, so you do not have sufficient grounds in order to have an account in our bank in Lithuania, go from here.

Now I have accounts in two banks - in Rietumu and PrivatBank in Latvia. My impressions, briefly: there are no problems with Rietumu, except for the price - opening an account cost 60 euros, and they sometimes charge me 50 euros a month for account maintenance if I have turnovers below the minimum threshold. And so they are polite, and work like a clock (by European standards, of course). In PrivatBank, the cost of maintaining an account is lower, but PrivatBank very much digs into my transactions and all the time requires a copy of the contract, the explanation of the transaction, the statement from Rietumu, they always see that I am laundering money through them.

Together with the account they give a corporate VISA or MasterCard card, be sure to demand it - firstly you can pay the company's expenses with this card (air tickets, hotels, hosting services, etc.), and secondly in case of emergency you can withdraw money from paypal to that account. I wrote more about PayPal below.

Naturally, in no case lose the card and do not forget the pincode from it! If you forget the pincode, you will have to go to Latvia again, make a new card again, wait for it again, pay for the card issue, etc.

Well and from minuses - banks in Latvia work from 10 to 18, sometimes even with a lunch break. And yet, since you are a non-resident, not all branches can serve you, usually only one branch of the bank serves non-residents all over Riga.

Okay, with the problems figured out. Now the advantages of a current account in the European Bank:

1. Your account will be multicurrency (euro / dollar + other currencies at will), that is, you can accept SWIFT money transfers from any customer in any currency from any countries. No exchange controls, no restrictions.
2. If you want to change a large amount of money (for example, 5,000 dollars in euros), you can contact the bank manager and he will give you a more favorable rate.
3. Your account will be with the European Bank, since Latvia is a member of the EU. Besides the fact that it is prestigious - Upwork, and PayPal have recently supported the function of fast withdrawal of money to an account in any European bank, which is good news.

And another small note. Why do I have two checking accounts? But why. Theoretically, using the SWIFT system, you can receive money from a customer from any country in the world, but I was faced with the fact that a SWIFT money transfer from HSBC in Hong Kong does not reach Latvian PrivatBank, and comes back after a few days. Here either PrivatBank or HSBC have incorrect details, I don’t know which side is the problem. There was no time to sort it out, so we solved the problem with the customer by opening an account in Rietumu and sending money to this account, there were no problems there.

Conclusion: If you are working with a customer from exotic countries, then you may need to have a second checking account at another bank, “in reserve”. Well, or you should be prepared for the fact that you will need to urgently go to Latvia to open a second current account. As I wrote at the very beginning, for the first couple of months, keep close to Latvia, you never know what problem will suddenly arise.

By law, by the way, you can have any number of current accounts in any bank of the European Union.

4.7 PayPal

4.7.1 General Information

In Latvia, there are no restrictions on accepting and receiving payments through PayPal. You can accept payments from legal entities and individuals from any countries, pay legal entities and individuals in any countries. In any currency and in any size. One payment or several. Well, how are things in Russia, freelancers? Central Bank has already allowed paypalu transfer money between legal entities, no?

Okay, now seriously. Here are the reasons why you should open PayPal:

1. Americans are used to PayPal, this is their usual tool to pay for services.
2. In PayPal, the commissions are rather big (~ 4%, plus sometimes currency conversion), but still not horse 20%, as at Upwork. If you have worked with a customer from the United States on Upwork, ask him to pay for your services through PayPal, I am sure he will not refuse.
3. With PayPal, you can also pay for hosting services, for example. It will go to cost.
4. PayPal has quite convenient reporting.
5. You can withdraw money to an account in a European bank or on a Visa / MasterCard card.

4.7.2 Opening a PayPal Account

You can open a PayPal account as soon as you receive a PVN. You need to open a new account, the old one is not good. I opened an account on my working email. Be sure to register as u
It’s cool and “in Latvia”: either go to paypal.com from Latvian IP, or when you open paypal.com at the bottom of the page, select your location - Latvia.

After registering, your PayPal account will be frozen and asked to fill out a long form to combat money laundering. You will need to specify the company name, address, VAT number, the name of the company owner (that is, you) your address, passport details, etc. You will also need to download your copy of your passport. At the last stage, you will be asked to upload scans of documents confirming that the company belongs to you. You need to scan the LĒMUMS that you were given in the Register of Enterprises of Latvia.


At this stage, a small plug-in arose; after filling in all the items on the PayPal form, I did not defreeze my account. The problem was solved after the call to the support service, I told them that I filled out the questionnaire, and they defroze my account manually. PayPal has a bad interface, but the phone support service works well, if you have any problems, call them, do not hesitate.
Sorry, I do not remember how long the above took, but it seems from 7 to 14 days from the date of registration, taking into account account freezing.

Farther. There is one more restriction, very offensive - beginner sellers on PayPal can withdraw money from PayPal only after they “lie” on the account for 20 days. If I'm not mistaken, in 2016, in order to get out of the “novice seller” status, you had to fulfill 2 conditions:

1. So that 50 days have passed since the first payment
2. So you get 10 payments

To resolve this issue, find any friend who has an account with PayPal and lives outside of Latvia (no matter in the EU, in the USA or anywhere else) and give him 10 bills for $ 1 for any services, such as advice or fix bugs in the site, or something like that. You issue invoices without a PVN (VAT), as the customer is located outside Latvia. Then you download all the invoices and give them to your accountant.
When 10 payments are ready - you are amazing, it remains to wait 50 days.

These numbers (50 days, 10 payments) were relevant in 2016, perhaps the rules have now changed.

4.7.3 Invoicing with PayPal

After you have done the work for the customer, you ask the customer for their details and PayPal wallet email address. All my customers are companies, so you need to know from them the name of the company, the address of registration and the name of the contact person.
Then you go to Tools / Invoicing and create an invoice for services rendered. Write there points and cost. If you want - specify a fixed amount, or hours of work, as you and the customer are more comfortable. If you provide services outside of Latvia, you do not pay VAT (VAT), so leave the field with tax empty.

It turns out like this:



Then press "SEND" and wait for the customer to pay for the work. When the money will be in your PayPal account, you can manage the money - to pay them hosting, for example, or withdraw to the bank.

Some customers pay payments without invoices. In this case, you still need to create an account in PayPal, so that there is something to report to the accountant. Make sure that the invoice date is set before the actual payment by the customer. Of course, it is not necessary to send such an invoice to the customer.

4.7.4 Withdrawal

In PayPal, you can add a Visa / MasterCard corporate card or bank account, I recommend that you add both.
When adding a bank account, you must specify the bank details: Swift-code, address, name, etc., as well as the account number and information about it. Bank details you can find on the official website, your account number and information about it, look in your Internet bank. Account number looks like LV00XXX0000123456789

Your account in the Latvian bank, I think, a multi-currency dollar / euro (by default). Therefore, the currency of the account can indicate at least a euro even a dollar, money should theoretically go anyway.
If you specify the currency in euros, and on PayPal you will receive money in dollars, then when you withdraw money, PayPal will convert them into euros forcibly, at its own rate. And the course at PayPal is less profitable than at your bank.

Also note: You can not change the currency of the account in the future. Probably, this can be done through PayPal technical support or if you unbind the account and link it again? I did not try.

After you add your bank account to PayPal, one or two PayPal payments will drop to that account. You will need to look at the code in the payment description and enter it into PayPal for confirmation. Or, alternatively, you will need to name the payment amounts to confirm, for example, 0.01 and 0.11 euros. A little later, PayPal will write this money back.

After the bills are confirmed, you can withdraw money to them. Previously, the withdrawal of money took 5-7 days. After you order a withdrawal, first your order will be checked by PayPal security, after 1-2 days you will receive a message saying that the withdrawal is approved, and after another 3 days the money will be in the bank account. More recently, the money is in the account the next day.

With the binding of the card is the same - you specify the card details (number, expiration date, owner name), and then confirm it through PayPal payments, as I wrote above. Of course, the card should be corporate, and belong to your company, and not to you as an individual! In this case, something like FOR BUSINESS will be written on the map, and ACCESS TO ACCOUNT will be written as the owner's name. This is what my card looks like:



When you add a card to PayPal, you cannot write ACCESS TO ACCOUNT there as an owner, since PayPal automatically inserts your last name there.Do not worry, write to the cardholder your name and surname, there will be no problems, the money will still come to the card.

Based on my experience, money on the card goes longer, up to 14 days. If suddenly for some reason you could not add the account number (for example, PayPal code payments did not fall into the account, or some other plug-in occurred), and you urgently need a cache or you are far from Latvia, then you can use the card to “Emergency” withdrawal of money for it, while you are dealing with a bank, why payments do not reach. Although damn, an urgent cache with a delay of 14 days does not sound very like.

4.7.5 PayPal Reporting

Once a month, download all the invoices that you received or paid for the previous month, and also download the statement and send it to the accountant.
Go to Reports, then Activity Download. Set Transaction Type: Balance affecting. Then specify the period (for the previous month) and click Create Report. After some time, you will be notified by e-mail that the report is ready.

Take invoices from the Tools - Invoicing section, download each invoice as a PDF.
Send the report and invoices to the accountant and forget about it until next month.

4.8 Upwork

4.8.1 General Information

When I registered a company and received a PVN, I had an empty profile on Upwork, so I created a new, working email. I don’t know what to do if you already have reviews, ratings, etc., I think you, too, should better register a new account, alas.

After registration, indicate in the Contact Info your legal address in Latvia, then go to Tax Information and enter your details - company name, address and PVN (VAT) number. This PVN needs to be confirmed, this process is automatic, usually Upwork confirms it for 1 day. Do not forget to specify in the settings that you are not a resident of the United States.

Upwork you will send bills with VAT-tax of 21%, but if you pay by mutual settlement (from your balance) or through PayPal, then for some reason VAT is not charged. I don’t know what it’s all about, but in any case it’s already Upwork’s problems, if Upwork thinks wrong, it’s their headache. In your case, the calculation is simple - if you provide services outside of Latvia, you do not pay VAT even if you pay.

Otherwise, everything is as usual - we replenish connects, we are looking for customers, we receive payment from them for mailstones and we watch how the amount on the balance sheet grows.

4.8.2 Withdrawing Upwork

It’s still easier than PayPal. You can withdraw money to a PayPal wallet or to a current account in a European bank. For withdrawal to PayPal - indicate your email-address to which PayPal wallet is registered. For a bank, specify your bank details (Swift-code, name, address), as well as your account details. I remind you that you can find the details of the bank on the official website, look up your account number and information about it in your Internet bank.

Money in a European bank account comes within a day. It is preferable to withdraw money to the account, but just in case, add both methods (account and PayPal) to withdraw money.

4.8.3 Reporting to Upwork

Once a month, go to Reports / Transaction History, set the period - the previous month, then save the table and save all invoices. Both the table and invoices are sent to your accountant. The table is best saved by printing the entire web page to PDF, because the CSV file offered by Upwork is completely unreadable.

Again, as in the case of PayPal - this can be done in 5 minutes, sipping idly smoothies.

5. How to withdraw money from the company

5.1 General Information

Now go to the most enjoyable! So, your company works, you have bank accounts, PayPal, Upwork is attached to you, you work for customers, customers pay, money from customers is flocked to a current account, and now you only need to get them!

There are 4 main ways to withdraw money from the company in your pocket:

1. Dividends
2. Salary
3. Expenses, travel
4. If you have an IP or LLC in Russia, order services from this IP / LLC and pay through the currency control

5.2 Conventional withdrawal methods

5.2.1 Dividends

With dividends, I have not yet understood in detail. If I'm not mistaken, then when withdrawing dividends you have to pay taxes in Russia, since you are a resident of Russia. Dividend tax in Russia is 13%, and in Latvia 10%, Russia and Latvia have an agreement on the avoidance of double taxation, so you must provide the State Revenue Service with the information that you have already consolidated this tax in Russia and do not have to pay anything in Of Latvia. And another thing: if you have an SIA with a registered capital of less than 2,800 euros, you can only withdraw dividends under certain conditions. Consult with your accountant about this.

5.2.2 Salary

Since the company cannot be without employees, after registering the company, the accountant adds you to the position of “Member of the Board” (Valdes loceklis in Latvian) and registers you in the electronic reporting system. You get a certain salary and pay taxes once a month. Interestingly it turns out - you work in Latvia, officially, wow! But it does not give you a residence permit, it does not give you any advantages at all. Well, maybe next time when applying for a visa in Latvia you will be given a multiple Schengen for 90 days, that's all the advantage.

Once a year you pay the unemployment risk tax of 3.6 euros. Every month, when you receive a salary, you pay two basic taxes - social 34.09% and personal income tax 23%. The minimum salary in 2017 is 380 euros, but you can pay less if the accountant puts you in few working hours.

For example, if you want to spend less money on taxes, ask the accountant to take your salary to a minimum, for example, that you worked 2 hours per month. This will go away if you didn’t conduct any business at all and did not receive payments from customers this month. For example, if July was an “empty” month, I pay myself a salary of 4.13 euros, a social tax of 2.05 euros and an income tax of 1.24 euros. In another month, the numbers may be different, depending on the number of working hours in the month.

If I conducted some activity, but not completely, then I pay the salary, for example 103.37 euros, social. tax 51.14, personal income tax 30.88 euros. I remind you that the minimum salary in Latvia is 380 euros per month, in theory you can assign yourself any salary and any number of working hours any month.

Well, the third option, if you have a lot of customers and cash flows like water, pay full salary: pay iedzīvotāju ~ 78, sociālais ~ 129 and salary to issue ~ 261 euros.

5.2.3 Costs

You can also write off the costs to the company. You can write off an account for renting an office, air tickets, hotel checks, receipts for public transport, any materials you need for work (electronics), hosting bills, software licenses bills. You can not write off the cost of food and restaurants / cafes. To confirm you need a fiscal receipt or invoice plus an extract from a corporate bank card. Collect all the checks, then bring them to your accountant. The accountant counts you how much money you can get; you transfer this money to yourself. Profit!

5.2.4 Travel and flights

If you travel frequently, you can also get travel allowances as an added bonus to airline tickets. Just an accountant draws up your stay in another country as a business trip, and charges you a daily allowance.
Learn more about travel and subsistence from your accountant.

5.2.5 Return of the founder’s loan

When you open a current account, you probably replenished it with some kind of start-up capital. This replenishment is considered as a loan from the founder, and in the course of your activity you can return this money back, in parts or in full, at any time.

5.3 How to get paid

5.3.1 General Information

Suppose your accountant counted your salary, per diem, and you decided to return some of the money, you can get this money as follows:

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• . . ,

5.3.2 .

As I have already said, banks will meticulously consider you, and you will need to prove to the bank manager that you are worthy to have an account in their bank. At the time of issuing the card, I had already been operating for about half a year, so the accountant printed out the information system data for me that I am an employee, pay taxes, etc., printed out data about my company from the Lursoft system, this turned out to be enough.

I opened the card in Latvian PrivBank. I received the simplest Visa Electron card, that same dull without a chip, which in Russia is also called a “salary card”. As in the case of a corporate card - in no case do not lose the pin code from this card, the pincode cannot be changed or restored. If you lose your pincode, you will have to go to Latvia again and order a new card.

When the card is with you, you can withdraw money from this card at an ATM or pay with it at the terminals wherever Visa Electron is accepted.
Now - how to withdraw cash from it in Russia. Shooting in rubles is not an option, because the exchange rate at PrivatBank is simply extortionate. In my case, the most profitable way so far is withdrawing from Alfa-Bank ATMs in euros. The commission for withdrawing money from Privat is 2.5 euros per withdrawal, and only 100 euros can be withdrawn at a time. So far I am looking for more convenient methods, but I have not found it, alas.

And also: they informed me in a Latvian bank that they would inform the tax authorities of Russia that I had an account abroad. So I'm under the hood. Under the deoffshorization law, I have to notify the tax account about the status of the account every quarter.

5.4 Withdrawal through IP / LLC

5.4.1 General Information

I have an IP, so I wrote about IP. All that is written below applies to the LLC too.

You need to withdraw money in the IP, making a deal. That is, in fact, your company in Latvia concludes an agreement with an individual entrepreneur and pays to the currency account, then the individual person withdraws this money through currency control. On the topic of currency control there were many articles on Habré, they are all relevant. I will only note that once you conclude an agreement with yourself, then you can prescribe flexible terms of payment and terms in the agreement. For example, I made one contract, and when I need money, I conclude an additional. agreement, invoice, pay and close the act. Or sometimes even without additional. agreements are simply an account and an act. Make sure that the total amount of money transferred under one contract does not exceed $ 50,000, otherwise you need to prepare a transaction passport, if necessary, close one contract and open another.

Contract and add. I have two languages ​​(Russian / English) agreements, invoices and deeds can not be translated, standard accounts from 1C are suitable, there are no requirements for invoicing or translation from the Latvian side.

As you understand, because of currency control, this is the most problematic way to withdraw money, but it is also the cheapest - you pay some commission to the bank for a SWIFT transfer (usually around 15-30 euros, almost does not depend on the amount of payment) and 6% of USN in Russia. Let me remind you that when paying out through dividends you pay 13% of the tax, taking out through salary - half.

Theoretically, the State Revenue Service or the bank can get to the bottom, such as what kind of a Kama Sutra with payments to themselves. This is approximately like the well-known scheme “LLC + IP” in Russia. The method of protection is the same as in Russia - justify the need for these payments with documents, do not overcharge.

But so far, neither the State Revenue Service nor even the banks have been carping. And this is very strange, by the way. It cost me to withdraw 1,600 euros from a corporate card, as the bank zabombil letters with the requirements to provide supporting documents from whom I received my income and on what basis. And the fact that three times large amounts go to Russia, they do not care.

5.4.2 Law on CFC

Now, about the same thing, but from the Russian side. So, in Russia there is a law on controlled foreign companies. Since you are the owner of a company in Latvia, you must inform the tax office that you have this company. To do this, there is a certain application form, you must fill it in and submit it to the tax office at the place of residence. That's all for now, if you get less than 10 million rubles a year from your company, you can do nothing else. And if more - hire an accountant and count with him the weighted average rates.

Also, all your transactions between a Latvian company and an individual entrepreneur, according to the tax code of the Russian Federation, are controlled, as they are between related parties. This is not prohibited, but it imposes an obligation on you to report to your tax office about the transactions made once a year. Just notify the tax, and if your IP keeps the market prices for the provision of its services, does not overstate and does not underestimate them, then there should be no problems.

6. Residence permit

Under certain conditions, a company in Latvia gives you the opportunity to obtain a residence permit. If I understand correctly, the most accessible conditions are - you must be a member of the board of your company, the company must be older than 1 year, the authorized capital of the company must be 2,800 euros, your salary must be ~ 1,800 euros and you must pay taxes for the year in the amount of ~ 22,000 euros. Under these conditions, you get a residence permit for 1 year. Then you renew it every year, and if every year the above conditions are met, then after 5 years you will receive a permanent residence permit.

I do not go through the requirements for the time being, but in general I look in this direction, it would be interesting.

The great advantage of a residence permit in Latvia is that it does not need to be “supported” by living in the country. You can wander around the world and freelance at least in Goa, even in Thailand. As long as you fall under the conditions, your residence permit will be renewed without problems.

7. Conclusion

The article unexpectedly turned out very long, but I hope you did not get bored, and were able to get valuable knowledge from this article. If you have any questions, you can ask them in the comments, I will try to answer.

Thank you for reading to the end!