Tax Planning for Latvia Golden Visa Holders

Introduction to Tax Planning for Latvia Golden Visa Holders

Why should you consider tax planning together with the Latvia Golden Visa?

The Latvia Golden Visa provides access to the Schengen area with relatively low investment amounts, mobility within the EU, and the possibility of permanent residency in the medium term. However, to fully benefit from this program, you must plan residency rights and tax obligations together.

Latvia offers an attractive tax environment for investors with a 0% corporate tax rate on undistributed company profits, no inheritance or wealth tax, a wide network of double taxation treaties, and flexible residency rules. This environment means significant tax optimization at both personal and corporate levels with the right structuring.

Corpenza, as a consultant providing mobility, corporate, and workforce solutions in Europe and globally, combines residency permits, company formation, international accounting, payroll, and tax optimization under one roof for Latvia Golden Visa planning. In this article, we will address applicable tax planning topics step by step for investors who have obtained or are planning to obtain a Golden Visa.

Residency by investment ≠ tax residency

Obtaining residency through investment in Latvia does not automatically mean you are a tax resident of Latvia. Keep this distinction clear when planning your taxes:

• Golden Visa / residency permit: Provides legal residence and freedom of travel in the country.
• Tax residency: Determines which country you will pay tax on your worldwide income.

When creating a strategy, first plan which country you want to be a tax resident of, and then how your investment in Latvia fits into this picture.

Tax Residency Rules in Latvia: Where Are You Considered “At Home”?

183-day rule and “center of vital interests” test

Latvian tax legislation ties tax residency to two main criteria:

• If you are present in Latvia for 183 days or more in a calendar year, you are generally considered a tax resident.
• If your family, main residence, business, or economic interests are primarily in Latvia, the country may be considered your “center of vital interests”.

Simply having a Golden Visa or holding real estate in Latvia does not trigger tax residency on its own. However, if you actively use the residency permit as your base of life, you will practically transition to Latvian tax residency.

Key differences for resident and non-resident investors

Two different profiles emerge under the Golden Visa:

• Non-resident investor: A person who stays in Latvia for less than 183 days and whose center of vital interests is in another country. In this case, Latvia only taxes Latvia-sourced income (for example, rental income from Latvia, salary or dividends from a local company).
• Resident investor: A person who exceeds the 183-day rule or whose center of life shifts to Latvia. Latvia taxes this person on their worldwide income; double taxation treaties come into play.

When outlining your residency strategy, clarify which category you want to fall into. For high-income professionals and business owners, unintentionally transitioning to resident status can create an unexpected tax burden.

Practical day counting and document management

For practical tax planning:

• Digitally record your entries and exits to Latvia; assess the risk scenario with your advisor as you approach 183 days.
• Support with documents where your family residence, children’s school, and main business address are concentrated.
• If your income is spread across different countries, structure it considering Latvia’s double taxation treaties.

Corpenza models tax residency scenarios alongside residency and company formation processes, allowing you to see risks in both Latvia and your home country.

The Latvian Tax System: Key Topics Golden Visa Investors Must Know

Corporate tax: 0% model on undistributed profits

Latvia applies a region-specific model for corporate tax. A company does not pay corporate tax as long as it retains its profits in the business. Tax only comes into play when you distribute profits.

• Effective corporate tax of 20% is applied on distributed profits.
• There is no corporate tax on profits retained and redirected for reinvestment.

Investors choosing the company investment route for the Golden Visa can thus establish an “accumulation and reinvestment” fund within the EU and spread the tax over time. Corpenza takes care of the accounting and international reporting for these companies established in Latvia, creating a tax deferral strategy until the distribution moment.

Personal income, dividend, and capital gains taxes

In Latvia:

• Personal income tax rates are progressive; prepare for investment income and dividends generally in the 20–25.5% range.
• If the company profit has already been subject to corporate tax, double taxation on dividends is prevented; the effective burden remains limited.
• Most capital gains (for example, from the sale of securities) are taxed around 20–25.5%; however, exemptions may apply in cases of long-term real estate holding and reinvestment.

If you are not a tax resident, these rates only apply to your Latvia-sourced income; your portfolio income from other countries is subject to your home country’s regime.

Real estate, property, and rental income

Summary framework for the real estate investment route of the Golden Visa:

• For investment, a minimum property purchase of €250,000 is required in specific areas.
• During the purchase, you generally face a state fee/tax burden of approximately 5%.
• Property tax is approximately in the range of 0.2–3% based on the cadastral value of the property; the rate is higher for land and commercial properties.
• Prepare for a standard tax burden of around 25.5% on rental income; you can lower the net rate with expense and depreciation planning.

If you use the property as your residence for a long time or redirect the sale income to another property in Latvia after a certain period, capital gains tax exemption may come into play. At this point, you need to perform detailed technical calculations.

Wealth, inheritance, and withholding tax outlook

Latvia provides the following advantages for Golden Visa investors:

• No wealth tax is applied.
• No inheritance or estate tax exists; planning for intergenerational asset transfer becomes easier.
• Thanks to a wide network of double taxation treaties, withholding tax rates on dividends and interest income from many countries decrease.

This framework makes Latvia a strategic “holding and asset management” hub within Europe, especially for family offices and multi-generational wealth structures.

Tax Strategies According to Golden Visa Investment Options

Company investment (business route): Establishing a tax-efficient center within the EU

For the Golden Visa, you can invest a minimum of €50,000–€100,000 in company capital. In this model:

• When the company meets a certain annual tax and contribution burden through its activities, you fulfill the conditions for residency permit renewal.
• You do not pay corporate tax on undistributed profits; tax arises only on dividend distribution.
• You can structure the Latvian company as an “EU holding” that holds participations in other countries within an international holding structure.

Corpenza manages company formation, banking relationships, and international accounting processes in Latvia. Additionally, with payroll services, you can employ remote staff working in different countries through your Latvian company, managing payroll and taxes from a single center. This way, companies can:

• Show salaries of remote and contracted personnel as expenses.
• Minimize compliance risk while accessing the EU workforce.
• Establish short-term project teams legally through Latvia with posted worker models.

Real estate investment: rental, capital gains, and family planning

If you choose the real estate route, structure your tax planning along three axes:

• Rental income: Model the tax rate applicable to rental income, the items you can deduct, and depreciation in advance. Purchasing real estate through a Latvian company instead of as an individual can reduce the net tax burden in some cases.
• Long-term sales: In cases of holding for 5+ years, using as a primary residence, or redirecting sale profits to another Latvian property, you can minimize capital gains tax.
• Family planning: While including your spouse and children in the residency permit, calculate how tax residency will shape at the family level in future scenarios of permanent residency and citizenship.

Corpenza establishes a real estate holding company in Latvia, taking care of the accounting and tax reporting for rental income while designing a structure compatible with your assets in other countries.

Financial instruments and bank deposits: tax optimization on passive income

Within the Golden Visa framework, you can also invest through bank deposits or bond-like financial instruments. In this case:

• Interest income is generally subject to withholding tax at source; you can reduce the rate according to the country you reside in and agreements.
• If you are not a tax resident in Latvia, you can offset the tax withheld in Latvia when declaring this interest income in your home country.
• If you create a portfolio through a Latvian company, you can optimize the total tax burden by selecting the timing and country of distribution.

This structure makes Latvia a tax-efficient capital pool, especially for professionals with high savings rates and family offices.

International Structures, Double Tax Treaties, and Workforce Dimension

Strategically using double taxation treaties

Latvia has signed double taxation treaties with over 80 countries. This network provides investors with:

• The opportunity to reduce withholding tax rates on dividends, interest, and royalty income.
• Prevention of double taxation on the same income in two countries.
• Resolution of uncertainties in tax residency conflicts with “tie-breaker” rules in the treaties.

When establishing a company in Latvia, consider the details of the agreement with your country at the contract and cash flow level. Structure the flows of dividends, royalties, and service fees in accordance with the definitions of the agreement.

Remote workers, posted workers, and payroll planning

If your Golden Visa investment operates through a company in Latvia, you can use this company not only as a passive investment vehicle but also as an international workforce platform. Here are critical points from a tax and compliance perspective:

• Your team of remote workers in different countries is subject to the social security and income tax rules of the countries they work in. However, as an employer, you can payroll through your Latvian company.
• With Corpenza’s payroll service, you can show the salaries of personnel working in different parts of the world on behalf of your Latvian company as expenses; this provides advantages in both tax and balance sheet management.
• In short-term project assignments, with Corpenza’s staff leasing and posted worker solutions, you can legally assign employees to different European countries through Latvia using a temporary employment agency model.

This structure transforms the Golden Visa from merely a “residency right” into a genuine operational center, especially for technology ventures, consulting firms, and project-based sectors seeking growth within the EU.

Citizenship by investment and long-term tax strategy

The Latvia Golden Visa opens the path to permanent residency and citizenship under certain conditions in the long term. Structure your tax planning not only based on “today’s rates” but also considering potential status changes:

• If you want to make Latvia your main residence after permanent residency, simplify your worldwide income structure accordingly.
• Simulate the companies, real estate sales, or inheritance transfers you plan to exit in the next 5–10 years from a Latvian perspective.
• By using Corpenza’s citizenship by investment and tax optimization services together, you can manage both passport and tax status simultaneously.

This way, you turn the Golden Visa into part of a broader global mobility strategy that includes multiple citizenships and residencies without being tied to a single country.

Applicable Steps, Risks, and Considerations When Working with Corpenza

Action plan for the first 12 months after Golden Visa

The first year after obtaining your Latvia Golden Visa is a critical period in terms of tax and compliance. Clarify the following steps:

• Day tracking: Plan the days you will stay in Latvia in advance, model whether you will exceed the 183-day threshold from the beginning of the year.
• Income inventory: List all your income sources worldwide (company profits, salaries, rents, dividends, capital gains) and where they are taxed.
• Company and real estate structure: Decide whether to carry your investment in Latvia through an individual, local company, or international holding.
• Residency, family, and workforce: Plan residency and work permits for your spouse, children, and key employees, considering the impact of tax residency.

Corpenza integrates international accounting and tax optimization consulting while carrying out residency permits and company formation in this initial phase. This way, you avoid coordination loss among consultants in different countries.

Typical mistakes to avoid

Common mistakes made by investors obtaining the Latvia Golden Visa:

• Not paying attention to day counting: Unintentionally exceeding 183 days by frequently traveling to and from Latvia, resulting in unwanted tax residency.
• Ignoring double taxation treaties: Taxing the same income in two countries, while there is an offset opportunity under the treaty.
• Structuring the company as a “shell”: Establishing structures that do not engage in real economic activity, created only for residency; such structures pose risks with both immigration authorities and tax authorities.
• Not planning the global workforce arrangement: Making contract and payroll errors that will lead to incorrect taxation of remote teams in the wrong country.

Most of these risks can be managed by obtaining the right consulting at the beginning of the process. Corpenza structures the investment, company, and workforce in Latvia as a coherent whole compatible with Turkey, Gulf countries, and your other main markets.

Current regulations, official sources, and exchange risk

Golden Visa programs have come under strict scrutiny at the EU level in recent years. For Latvia:

• Program conditions, investment amounts, and application criteria may be updated in the coming years.
• The EU’s anti-money laundering and transparency regulations increase proof of source of funds and reporting obligations.
• Changes in tax legislation, especially regarding the taxation of multinational structures, may arise in line with BEPS and ATAD compliance.

To keep track of current rules and agreements, refer to official sources such as the Latvian Ministry of Finance and the tax administration; for double taxation treaties, you can use the Latvian Ministry of Finance website. For residency and immigration processes, follow updates from the Latvian Office of Citizenship and Migration Affairs (OCMA):
https://www.pmlp.gov.lv/en.

Corpenza continuously monitors these regulatory changes and keeps your Latvia Golden Visa plan updated in terms of residency permits, company structure, international workforce, payroll, and tax optimization. This way, you can use Latvia not just as a residency point but as a sustainable and compliant global expansion hub.