Moving to Latvia as a Swedish Business Owner

Why Latvia is worth considering

Latvia lets you keep ordinary business profit in the company without immediately paying company tax on it. Sweden normally takes 20.6%, including from profit you intend to reinvest.¹²

That matters when you are financing stock, equipment, marketing or your next acquisition.

Taking money out is a separate calculation. Under Latvia’s standard dividend system, €100 of profit before distribution tax becomes €80 of dividends and €20 of company tax. Qualifying dividends normally attract no further ordinary Latvian personal tax. An additional 3% applies to relevant annual income above €200,000.³⁴

Your result depends on who owns the company, where they are taxable and where the business actually operates.

4 ways to arrange it

1. Keep everything in Sweden

Your Swedish company earns the profit and you remain a Swedish tax resident.

After 20.6% company tax, dividends within your available owner-managed company allowance attract 20% personal tax. €100 of company profit becomes €63.52 in your pocket. Above the dividend allowance, the personal tax treatment changes.²⁵

This is the starting point for the comparison below.

2. Keep the Swedish operation, add a Latvian commercial business

Suppose you manufacture specialist equipment.

Your Latvian company finds customers, negotiates prices, signs contracts and takes responsibility for the sale. It commissions your Swedish company to manufacture and deliver.

The Swedish company earns its manufacturing margin. The Latvian company earns its commercial margin.

You can run the Latvian activity yourself. A second company does not automatically require another office or a new team.

While you remain a Swedish tax resident, our recommended dividend route is Latvia’s special 15% company-tax plus 6% personal dividend-tax option. It is available to companies owned entirely by individuals. The personal withholding can be credited against Swedish dividend tax; the company tax cannot.⁷²⁰⁶

Assuming 20% Swedish dividend tax and full credit, €100 of Latvian profit becomes €68 in your pocket after both countries’ taxes. Ordinary profits kept in the company remain untaxed in Latvia until distributed or treated as distributed.

3. Keep both companies, move yourself to Latvia

You keep the Swedish operation and own both companies, but live and become tax resident in Latvia.

The factory, warehouse or delivery team stays in Sweden. You run the Latvian commercial business from here, with each company earning its own margin.

This lets you move your life and part of the business without rebuilding the operation that already works.

The Swedish company still pays Swedish company tax, and its dividends normally face Swedish withholding tax. The example assumes you qualify as a Latvian resident under the tax treaty.¹⁸

Once Latvia is your tax residence and Sweden no longer taxes your Latvian dividends, use the standard 20% Latvian distribution-tax regime. That leaves €80 per €100 of profit, before any high-income surcharge. Your accountant changes the election for subsequent distributions.

4. Move yourself and the business to Latvia

For a business you can genuinely operate from Latvia, you can have the company, management and your own life based here.

Ordinary retained profit remains available for investment without immediate Latvian company tax. Dividends follow the Latvian treatment described above, assuming Sweden has no further taxing claim.

What the numbers look like

Take a business with €1 million annual customer revenue, excluding VAT, €650,000 operating costs and €350,000 profit before company tax.

In Options 2 and 3, the Swedish company earns €150,000 profit and the Latvian company earns €200,000. Option 2 uses the 15% + 6% regime; Options 3 and 4 use the standard 20% regime.

Annual outcome	1. All Swedish	2. SE + LV, owner in Sweden	3. SE + LV, owner in Latvia	4. All Latvian
Owner’s tax residence	Sweden	Sweden	Latvia	Latvia
Available to retain and reinvest	€277,900	€319,100	€319,100	€350,000
Extra investment capital versus Sweden	—	€41,200	€41,200	€72,100
Owner’s dividend income after tax if everything is distributed	€222,320	€231,280	€258,862*	€277,600
Extra dividend income versus Sweden	—	€8,960	€36,542*	€55,280

Option 3 assumes direct personal ownership of both companies: €119,100 Swedish dividends less 15% treaty withholding, plus €160,000 Latvian dividends, less €2,373 Latvian high-income tax. It shows the result before any foreign-tax credit against that Latvian surcharge.¹⁸¹⁹

Retaining and distributing are alternative outcomes. The table assumes sufficient Swedish allowance for 20% dividend tax, full credit of the 6% Latvian personal tax in Option 2 and no additional Swedish tax on retained Latvian profits. Latvian recipients have no other personal income. Operating costs include required payroll; personal figures show dividends only. Extra administration and restructuring costs are excluded.

Keeping profits invested and taking them home produce different results. Calculate both.

What makes the arrangement work

The Latvian company needs to earn its profit through the work, assets and commercial risks it takes on. The €150,000/€200,000 split above is an illustration, not a percentage you can choose simply by issuing an invoice.

Put the responsibilities and prices between the companies into contracts. Transferring existing customer contracts, a brand or another valuable part of the Swedish business can also create tax at the time of transfer.⁸

Your personal move needs its own assessment. Sweden considers remaining connections such as your home, family and substantial business interests. Managing a Latvian company from Sweden can also create Swedish tax exposure; foreign-company rules may affect retained profits.⁹¹⁰¹¹

Our recommendation: get 1 coordinated plan covering both countries before changing the contracts or moving assets. It should show what each company does, where you are taxable, what remains for investment and what reaches you personally.

Set it up in this order

1. Agree the structure and numbers

Give your cross-border tax adviser the ownership, accounts, customer arrangements, work locations and intended withdrawals. Ask for the implementation costs as well as the annual tax result.

2. Arrange your residence and eID

For an owner moving here, our recommended route is ordinary EU residence registration and a Latvian eID with active electronic signature.

EU citizens can qualify through sufficient resources and healthcare cover. You do not need to buy property or form a company first.¹²

3. Arrange banking and form the SIA

An SIA is Latvia’s limited liability company. A standard SIA has minimum share capital of €2,800. That is company money, not a government fee.¹³

Our service sequence is residence and eID → banking → company formation. Prepare evidence of your source of funds and the company’s intended business.¹⁴

4. Set the address and accounting

Your home can also be the company’s address. Use your own property or agree company use with your landlord in writing. The company needs a lawful basis for using the address and must be reachable there.¹⁵

Appoint the accountant before the first invoice. Agree VAT treatment, payroll and how the transactions with Sweden will be recorded.

5. Start trading under the agreed arrangement

Put the contracts, invoicing details and payment arrangements in place. Complete the Swedish departure notifications where you are moving: Skatteverket for a planned absence of 1 year or more, and Försäkringskassan separately.¹⁶¹⁷

Want us to handle the Latvian setup?

Your tax specialist establishes the cross-border structure. We handle the Latvian practical work: residence and eID preparation, banking setup, company formation and local coordination.

Start with Residency + eID, €299 plus government fees, or book a 15-minute consultation to put the next steps in order.

For appointments and work on the ground, use Practical Support.

Checked: 15 October 2026. General information, not individual legal or tax advice. Figures depend on the stated assumptions. Confirm your position before acting. Evakuera excludes liability for errors, omissions or reliance to the fullest extent permitted by law.