Now, Latvia has gained plenty of notoriety lately among offshore entrepreneurs. Often overlooked by everyone else, this country offers great benefits and a unique experience. Here is everything you need to know about Latvia citizenship.
But first, a few words about Latvia
Located in the northern part of Europe, Latvia is one of the Baltic countries and has borders with Lithuania, Belarus, Estonia, and Russia. It also has a maritime border, but with Sweden.
In terms of size, Latvia is difficult to spot on the map at first glance – just under 25,000 square miles.
To help you get an idea, Germany is over 137,000 square miles in size.
The population is under two million people. Again, it may seem like a lot, but this is less than what Paris has – and without the metropolitan area. The official language is Latvia and represents one of the two Baltic languages still surviving today.
In terms of economics, Latvia represents one of the top three entrepreneurial hotspots in Europe. It is only surpassed by Sweden and – surprisingly enough for some – Estonia. Internet is quite fast as well, especially when compared to more developed countries.
Now, why would you hunt for Latvia citizenship?
Benefits of living in Latvia
Before exploring the benefits of Latvia citizenship, you need to understand why it makes so much sense to live there. Whether you choose the capital – Riga – or a different spot, here are the benefits of living in Latvia.
The super fast-growing economy, a good hotspot for early entrepreneurial activity, and fast Internet are not the only reason, yet some of the most obvious ones. Things go way further than that and will also affect your quality of life.
For instance, Latvia is one of the most liberal countries in the world and one of the front runners in Europe. Human rights are well respected in Latvia, not to mention religious freedom and gender equality – no discrimination at all.
While Latvian is the official language and 25% of the population consists of Russians, most people in Latvia can also speak English – some of them at a very high level. In terms of Russian, almost every Latvian can understand it.
The high quality of life is quite important as well. Despite being located in the northern part of Europe, Latvia has a moderate climate. There are four seasons – you will rarely get over 30 degrees in the summertime, yet winters can be quite cold.
There are no hurricanes, floods, earthquakes, or other issues.
The healthcare system is incredibly good, and there are both private and public facilities. Even if you choose private healthcare, costs are acceptable. In terms of safety standards, it is worth noting that the crime rate is extremely low – one of the lowest in Europe.
Moving on to the education, Latvia citizenship is totally worth it if you have kids. Since the country has opened up to foreigners, you will find lots of international schools for foreigners. It makes no difference what kind of education you think about – from primary schools to actual universities.
Latvian universities are also appreciated all over the world for the high rating. Sure, they cannot battle names like Yale or Harvard, but diplomas are recognized internationally and can provide good opportunities. Other than that, state schools are free – what else can you ask for?
The cost of living is not to be ignored either. Do not expect to pay too much to live in Latvia – you will be pleasantly surprised. To help you get an idea, Riga is about 40% cheaper than other European capitals – especially the top-rated ones.
The real estate market is just as attractive. For example, you could rent an apartment with three bedrooms for just over €500 a month. Where else in Europe can you find such prices?
Go to a decent restaurant – not the priciest one, but not the cheapest either – and you will barely pay €7 for a full meal.
If you are into fresh air and nature, Latvia is one of the greenest countries out there. There are over 12,000 rivers in this tiny country and more than 3,000 lakes. More than half of Latvia is covered in thick forests.
There is no other country with such a high level of fresh air and responsibility for the environment.
Exploring the tax system in Latvia
To keep it short and simple, Latvia has a corporate tax rate of just 9%, which is way lower when compared to other European countries. The income tax rate varies a little. However, there are a few things you need to know first.
The system is progressive. If your income is under €24,000, you will pay 20%. If your income is lower than €78,000, but higher than €24,000, get ready to pay 23%. Higher incomes are taxed at 31%. Of course, these limits are likely to change every now and then, so double check.
The tax on dividends is 20%. Then, the rate on income from capital gains is set at 20%.
It is worth noting that the local law counts cryptocurrencies as capital assets. Therefore, they are targeted by general capital gains tax. Further changes will be done within the next few years – some of them delayed by the coronavirus pandemic.
For example, taxation may differ for people who work as self-employed professionals, but they are not registered in this manner. As a sole trader in Latvia, you can also apply for the micro business tax – MBT, which has also been through some changes since 2021.
Furthermore, Latvia does not have any municipal taxes on income or other local taxes.
When talking about taxes, you should know that Latvia may have relatively small taxes, but it is not considered a tax haven. The country has been part of the EU since 2004 and must abide by some general rules set by the union.
Moving on, you should know that living in Latvia is not mandatory to keep your residency or work to get a passport. But then, if you do want to live and do business there, you should know that you can live at some relatively high standards for less than €2,000 a month.
Plus, Latvia has excellent connections with other countries.
Now that you understand what makes Latvia so attractive, what are the benefits of residency?
Benefits of getting residency in Latvia
If you are interested in Latvia citizenship, you should know that it all starts with the residency. Indeed, there are a few countries out there providing quick access to residency by investment, but Latvia is not one of them.
Now, why else would you get the residency?
A cheap solution to Europe
Latvia may not have a citizenship by investment program, but it does have a residency by investment one. Compared to other countries in Europe, this is the cheapest option out there. If you are into buying your way into European residency, Latvia is the way to go.
To help you get an idea, Greece offers something similar for about €250,000. Then, Cyprus asks for €300,000, while Spain demands half a million. Ireland takes things even further and asks for €1M, which is outrageous for some.
Back to Latvia, €50,000 will get you on track by tomorrow. How cool is that?
Live, work and study
The residency in some countries comes with all sorts of limitations. Each country has its own rules and regulations, of course. You need to double check what you can legally do once you get the residency, or it might be canceled.
Latvia goes all the way in. Get the residence, and you can do pretty much anything. For example, you can live there with no issues at all. You can work, get a job or start your own business – doing it in a developed country is a plus, of course.
Furthermore, your children will benefit from European education as well.
Forget about visas
The Latvian citizenship is not the only thing that will give you visa-free travel in most of Europe. The residency is just as powerful. European countries assume that getting the local residency means you are safe to be allowed somewhere else too.
At the same time, Latvia is part of the Schengen zone. This zone means there are no actual borders among countries. You can go from one country to another like you go from one city to another – sometimes, without any physical borders at all.
Family comes first
Another major benefit is the possibility to include your family too. Some countries do not allow group applications for residency – if they do, prices are likely to skyrocket. Latvia encourages foreigners with unique deals.
All in all, if you get the residency, it means your spouse and children younger than 18 will automatically get it too if they travel with you. Besides, you can invite relatives – up to second degree relatives – over for visa purposes.
Access to most of Europe
Spend five years on the local residency permit, and a new door will open up to you. After five years, you can apply to become a long-term resident of the EU. What does it mean? You can then move to other countries in the EU and actually live, work and study there.
Sure, you can still visit these countries anyway, but the permit will allow you to live there. You could move to the Netherlands, Germany or France, just to name a few countries. Latvia citizenship will provide a bit more than that, though.
Becoming familiar with the residency permit in Latvia
Local resident permits are nothing but some documents. They allow you to live, study, work or start a business in Latvia. Some of them are temporary and have a determined period of time – they can usually be extended. Some others are permanent.
Just like any other resident permit, this option allows you to be more than just a tourist in Latvia. As a tourist, there is not much you can do – especially in terms of working or studying. But as a resident, you can do all these.
Most tourists are allowed in Latvia for 90 days – it depends on what countries they come from. Planning to stay more than that asks for a resident permit – the same goes if you want to travel to other countries in the Schengen zone.
After all, anyone with a resident permit in a Schengen country can visit any other country in the zone.
All in all, resident permits in Latvia come in two categories – temporary and permanent.
Most permits are given for five years, though.
Here are the most common ways to build your way to Latvia citizenship.
How to obtain residency in Latvia
There are more ways to obtain residency in Latvia, whether you are pushing for Latvia citizenship or you simply want to relocate there or do some business. One of these options, in particular stands out in the crowd.
Commercial activity
This option is excellent if you want to obtain a resident permit in Latvia for business purposes. There are more categories of people that can apply for this permit – self-employed professionals or individual merchants, for example.
As a representative of a foreign corporation, you could also be entitled to a residency permit. It is just as easy if you need to get a job – or you already have one, not to mention scientific research and cooperation.
Obtaining this permit is relatively simple and will not require too much work.
Kinship
Getting a residency card is much easier if you know someone who already has it. For example, a relative who is a citizen of Latvia can help you out through your connection. But on the same note, a foreigner with a permanent permit will also be able to help.
On the same note, this method allows you to get residency from parents, your spouse, trusteeship, guardianship, and even foreigners once they reach the retirement age. This method is relatively simple if you know someone willing to help.
Education
Education represents a simple method towards residency, which may help later on with Latvia citizenship as well. You can get the permit if you study in Latvia or need to do it – however, it has to be an accredited schooling institution.
On the same note, student exchange programs go in the same category, not to mention those with Master's degrees, doctorates, or all sorts of diplomas in high educational institutions. Basically, schooling will always get you residency.
Medical treatment
Facing medical treatment? Whether it lasts for a month or half a year, you can get residency for a specific period of time. It has to be an inpatient institution, though, such as a hospital. However, the list goes further than that.
Those in an asylum situation or similar circumstances may also benefit from temporary residency. Stateless individuals – foreigners, of course – go in the same category, not to mention those pending criminal investigations.
International relations
Latvia has multiple international relations and allows citizens in specific situations to settle in without being in any of the above-mentioned categories. For example, those who come from any EU country can benefit from residency, but this is not everything.
Foreigners who have reached the retirement age can also get residency without too much hassle.
The same goes for those who can qualify for a visa-free regime.
Investment
This is by far the easiest way to build your way into Latvia citizenship. You basically buy the residency, saving you a lot of time and paperwork. Then, you just need to wait until you can apply for the actual citizenship.
Latvia provides an extraordinary program when compared to other European countries because of the requirements, which are significantly lower – you can practically do it even ten times cheaper than in other jurisdictions.
There are more types of investments you can make.
For example, investing in the equity capital of a local company allows you to get a residency for at least €50,000. In certain cases, the investment requirement can go up to €100,000. It obviously depends on what type of business you want to invest in.
If you are not too bothered about making business investments, there is also the opportunity to get government bonds. They are interest free, but the investment requirements here are a bit bigger – €250,000 or more.
Investing in the subordinated capital of a credit company is not a bad idea either – at least €280,000.
From all these investments, putting money into a company registered in Latvia is likely to be the most profitable one if you do your homework and invest in a company with a good prospect. Other investments could be safer, but not too profitable in the long run.
Interested in moving to Latvia? Even easier then. Purchasing property is also considered an investment. You can get a place to live in it, rent it out – you name it. However, the requirement, in this case, exceeds €250,000.
Latvia provides residency for smaller investments too, but they need to stand out in the crowd. For example, if you can innovate and create something that will boost the economy of the country, your merit will be recognized with a license to stay.
All in all, these residency investments have been introduced years ago. Overtime, they have brought in more than €500M in the country. Most investors have focused on real estate because it is a pretty safe bet.
At the same time, about 97% of all applications have been accepted with no issues whatsoever. Those facing rejection are not necessarily because of failing to meet the requirements, but because of small details that are often overlooked – such as failing to bring in all the paperwork.
The Latvian economy started gaining momentum over the past years. As a direct consequence, while still one of the cheapest countries in the EU, Latvia has seen property prices going up a little. Since the economy keeps going up at this time, faster is better – no time to waste.
Now, what kind of prices are you looking at? Obviously, the same place can cost two or three times more in Riga – the capital – than in a village. To help you get an idea, you can find a three bedroom apartment in Riga in a very good central area for around €300,000.
Too much? Go for a two bedroom apartment, and you will spend about €100,000. One bedroom apartments are great for single individuals or those who want to rent them out – they can cost around €50,000.
If you have a big family and you want to bring everyone over, chances are you may need five or six bedrooms – such properties in Riga will go for around €400,000. It is worth noting that the market keeps growing with new properties and estates.
New apartments – two or three bedrooms – in new buildings go faster than anything else.
Keep in mind that a single bedroom apartment may not be enough to meet the government’s requirements. Unless you meet the requirements, you may have to purchase more than just one property. The good news is the market keeps going up, so it is definitely a good investment.
Conclusion
As a short final conclusion, Latvia citizenship is extremely attractive and not just for those looking for a safe and stable economy within the EU. It makes a good choice for those who want to enter the European market as well – obviously, there are more requirements then.
The general idea is fairly simple to understand – getting citizenship takes time, and you cannot buy it. What you can buy is residency, which will eventually lead to citizenship. There are, of course, other ways to get there, but making an investment is the easiest one.
