Tax Incentives

Special Economic Zones

There are five Special Economic Zones (SEZ) in Latvia – Riga Free Port, Ventspils Free Port, Liepaja Special Economic Zone and Rezekne Special Economic Zone and Latgale Special Economic Zone that were established to promote entrepreneurial activities within the regions. All of them offer very favourable business incentives. Some of benefits for companies operating in Free Ports and SEZ include rebate on real estate tax, corporate income tax, withholding tax for dividends, management fees and payments for usage of intellectual property for non-residents and others.

Main benefits for companies operating in Free Ports and SEZ are as follows:

  • 80% rebate on real estate tax (1.5% in Latvia)*
  • 80% rebate on corporate income tax*

* The maximum accumulated amount compensated to the company by these conditions collectively is 35% (45% for medium and 55% for small
enterprises) of the company’s total ongoing investment of up to 50 million Euros.
** Applies in case of withdrawal of dividends. Otherwise CIT in Latvia is 0%.

Please note that this example is of informative nature only. Exact tax calculations are provided by respective divisions of State Revenue Service (www.vid.gov.lv).

Holding Company Regime

Once the company is established in Latvia it will be considered as tax resident in Latvia and entitled tax benefits according to holding company regime legislation. Holding company regime however does not apply on transactions with entities and individuals from tax-haven countries and territories. 

More information on these incentives can be provided by Investment Promotion Division.

N!B! Note that binding consultations on tax applications may be rendered only by State Revenue Service.