Latvia could be used as a platform for both portfolio and direct investments for the following free reasons:
Securities listed on stock-exchanges are traded tax-free
The gains arising in the hands of a Latvian company from disposal of the securities (shares, bonds etc) which are traded/quoted on regulated markets within the European Union/European Economic Area countries, as well as the profit from trade of investment certificates in EU and EEA open-end investment funds are not taxes with Latvian corporate income tax.
These rules make Latvia a perfect platform for establishing a company/investment fund intended for the sale of such securities.
Captial gains are exempt from taxes
It should be also noted that the capital gains from the sale of shares are also exempt from taxation in Latvia (regardless whether the shares are traded on stock exchange or not).
To apply exemption, there are no restrictions on minimal holding period or shareholding. The exemption, however, does not apply on gain from sale of shares in entities located in tax haven countries. The latter gains are subject to regular corporate income tax rate at 15%.
Profit repatriation for legal entities tax-free
The third benefit is that the dividends could be distributed to the foreign shareholder tax-free (except, for dividends paid to low tax countries -15%).
If the shareholder is an individual, 10% dividend tax applies. This amount of Latvian tax will be credited against the taxes payable in the country of residence of the shareholder (in most cases).
As a result the investment activity is exempt from the corporate income tax for legal shareholders and almost exempt for the individuals.
If you wish to find out more about Latvian companies, please contact Arturs Breicis +371 29274911 or e-mail email@example.com
Leave a reply