Latvia is drawing a growing number of entrepreneurs thanks to its favourable tax environment. But what budget should you plan for day to day? Here's a breakdown of the main expense categories to help you build your monthly budget in Latvia.
Introduction to the Cost of Living in Latvia
Understanding the cost of living in Latvia is essential for anyone considering moving there, particularly expat entrepreneurs. Latvia combines a relatively low cost of living with an attractive tax framework, especially for those setting up a company in Latvia.
The cost of living here is generally lower than in many Western European countries, including France, which can represent significant savings for expats. Let's look more closely at the main expense categories.
Housing in Latvia: Options and Costs
Housing is often the biggest expense for an expat. In Latvia, the choice between renting and buying will depend on your personal and professional situation.
| Type of housing | Average monthly cost in Latvia | Average monthly cost in France |
|---|---|---|
| 1-bedroom flat, city centre | €600 | €900 |
| 1-bedroom flat, outside city centre | €300 | €650 |
| Purchase price per m², city centre | €2,000 | €6,000 |
Popular areas for expats include Riga and Jūrmala, offering a range of options to suit different budgets.
Food and Groceries: What You'll Spend
In Latvia, food prices are generally lower than in France. Here are a few average prices:
- Milk (1 litre): €0.90
- Bread (500g): €1.20
- Rice (1 kg): €1.50
- Chicken (1 kg): €5.00
- Eggs (12): €2.00
Good to know
Local markets often offer fresh produce at even more competitive prices — an ideal option for expats looking to optimise their food budget.
Transport: Getting Around Latvia
Getting around Latvia is both affordable and convenient. Public transport is well developed in the main cities:
- Monthly bus/tram pass: €50
- Petrol price per litre: €1.40
- Taxi (base fare): €2.00
Owning a car adds flexibility day to day, but public transport is more than enough to get around the major cities.
Healthcare and Insurance: Budget to Plan For
Latvia's healthcare system offers quality services at a lower cost. Here's an overview of potential expenses:
- GP consultation: €20
- Monthly private health insurance: €50 to €100
Good to know
Expats are advised to take out private health insurance to cover any costs not covered by the public system.
Leisure and Entertainment: Enjoying Latvia
Latvia offers a range of activities to suit every taste. Here are a few example costs:
- Dinner for two at a mid-range restaurant: €40
- Cinema ticket: €8
- Monthly gym membership: €30
Compared with France, these costs are generally lower, letting you enjoy an active lifestyle without breaking the bank.
Overall Comparison With France
To sum up, here's an overall comparison of the cost of living between Latvia and France:
| Expense category | Latvia | France |
|---|---|---|
| Housing | €600 | €900 |
| Food | €250 | €400 |
| Transport | €100 | €200 |
| Healthcare | €70 | €100 |
| Leisure | €120 | €200 |
Overall, living in Latvia can significantly reduce your monthly budget compared with living in a higher cost-of-living country such as France.
Tax Savings With an SIA: Calculating the Net Gain
Setting up a company in Latvia, an SIA, offers notable tax advantages thanks to the so-called "Estonian" model. Profits reinvested in the company aren't taxed, easing the tax burden as long as you don't distribute dividends. Let's assume a net income of €50,000:
Good to know
With an SIA, reinvested profits are taxed at 0%, against a standard rate of 25% in France. Corporate tax (20%, around 25% after the gross-up factor) only applies when dividends are distributed.
Combining a lower cost of living with this deferral of tax on undistributed profits, the overall net gain for an entrepreneur can be significant, provided the applicable tax residence rules are respected.
For a personalised consultation on setting up your SIA in Latvia and maximising your tax savings, contact us.