As a freelancer or consultant, tax optimisation is crucial to maximising your net income. Did you know a Latvian SIA could drastically reduce your tax bill? Find out how, and why this solution is perfectly legal and accessible.
Why a Latvian SIA Is Attracting a Growing Number of International Freelancers and Consultants
Optimising your taxation is essential for any freelancer or consultant looking to maximise their earnings. There are plenty of options, from simplified sole-trader schemes at home to setting up a company in another EU country. A still under-the-radar but particularly advantageous option is the SIA in Latvia. This solution lets you benefit from a favourable tax framework while meeting European legal requirements.
Comparing Structures: Sole Trader, a Standard Company, and a Latvian SIA
To understand the appeal of a Latvian SIA, it's worth comparing the different structures available to freelancers and consultants.
- Sole trader (e.g. France's micro-entrepreneur): A flat deduction of around 22% of turnover.
- Standard company (e.g. a French SASU): Taxed at corporate tax rates (15% up to €42,500 in profit, 25% above, due every year), plus social contributions on salary.
- Latvian SIA: 0% tax on reinvested profits, then 20% (around 25% effective), or 15% + 6% under the 2026 alternative regime, at the point dividends are distributed.
A Latvian SIA offers significant tax advantages thanks to its unique tax regime, compared with a standard company structure elsewhere in the EU.
Worked Example: A Freelancer With €80k in Annual Turnover
Let's imagine a freelancer generating €80,000 in annual turnover. Here's a simulation of net income under each structure:
- Sole trader: Net income after charges (22% of €80,000) = €62,400.
- Standard company: After corporate tax (15% up to €42,500, 25% above) and social contributions, net income estimated at €54,000.
- Latvian SIA: 0% tax if profits are reinvested, 20% on dividends. Net income: €64,000.
Choosing a Latvian SIA can therefore deliver notable savings. With Latvia's regime of 0% tax on profits, the difference is tangible.
Requirements and Process for Setting Up an SIA in Latvia
Setting up an SIA in Latvia means meeting certain requirements, but rest assured, the process is streamlined.
- Minimal presence: A registered office in Latvia is required, but a permanent physical presence isn't necessary.
- Economic substance: You need to demonstrate a genuine economic activity.
- Invoicing: Compliance with Latvian legal and tax obligations.
To do this, it's possible to structure your remuneration from your Latvian SIA in a way that maximises the tax advantages.
Addressing Common Objections
"It's Complicated": Demonstrating How Simple the Process Really Is
Setting up an SIA in Latvia is often seen as complex. Yet with the right support, the process is straightforward and fast. The formalities can be handled remotely, with minimal paperwork.
"It's Risky": Legal Certainty and Legitimacy
Latvia is an EU member state, guaranteeing legal certainty in line with European standards. This makes setting up an SIA both legal and secure.
"It's Illegal": Compliance With European Tax Law
An SIA in Latvia is perfectly legal provided you follow local and European rules. For more details on how to optimise your taxes with a Latvian company, it's worth seeking advice from experts.
Who Is a Latvian SIA Right For?
This structure particularly suits consultants and freelancers whose activity generates enough turnover to justify the running costs of a company (bookkeeping, registered address), and who don't need to reinvest 100% of their income immediately into their personal lifestyle. For more modest turnover, a simple sole-trader status often remains easier to manage.
In short, opting for a Latvian SIA can meaningfully improve your tax situation as a freelancer or consultant, provided your activity volume and reinvestment strategy fit. The savings achieved and the simplicity of the process make it an option well worth studying. Our team remains available to assess whether this structure suits your situation.