Dormant Company in Latvia: Obligations and Options

You registered your SIA two years ago. Maybe the business idea didn't pan out, or you moved on to something else, or you're simply waiting for the right moment. The company sits there — no revenue, no employees, no transactions. Harmless, you assume.

It isn't. A dormant company in Latvia is not invisible to the state. It has legal obligations that continue regardless of whether a single euro flows through its bank account. Ignore them long enough, and the consequences range from fines to involuntary strike-off — with a detour through personal liability that most owners don't see coming.

What "Dormant" Means (And Doesn't Mean) in Latvian Law

Latvian law does not have a formal "dormant company" status the way some jurisdictions do. There is no checkbox you tick to put your SIA to sleep. If your company is in the Commercial Register, it is an active legal entity with full reporting obligations.

This means every dormant SIA must:

File an annual report with the Commercial Register (Uzņēmumu reģistrs) each year, even if it shows zero activity. The deadline is four months after the end of the financial year — for most companies, that's April 30.
Submit tax declarations to the State Revenue Service (VID), including zero-declarations for CIT and, if registered, VAT.
Maintain a registered legal address and ensure it remains valid.
Keep the company's beneficial ownership information current in the UR register.

The annual report for a dormant company is straightforward — it reflects no revenue, no expenses, and whatever remains on the balance sheet (usually just the share capital of EUR 2,800 or the micro-capital amount). But it still must be prepared, signed by the board, and submitted electronically.

Skipping the annual report is where trouble starts.

The 12-Month Rule: How the UR Handles Non-Filing

The Commercial Register has a mechanism for dealing with companies that stop communicating. If a SIA fails to file its annual report for 12 consecutive months past the deadline, the UR can initiate a procedure to strike the company off the register.

The process works like this:

The UR sends a notice to the company's registered address warning of potential strike-off.
The warning is published in Latvijas Vēstnesis (the official gazette).
If the company does not respond or file within the deadline set in the notice, the UR proceeds with deletion.

This sounds like a convenient shortcut — "just let them strike it off." But there's a catch. A company struck off by the UR is not the same as a properly liquidated company. The legal consequences can follow the owners:

Unsettled debts don't disappear. Creditors can still pursue claims against former shareholders and board members.
Tax obligations remain. The VID can assess penalties for unfiled declarations, and these obligations transfer to the responsible individuals.
The struck-off company can be restored within a certain period, which means the legal entity — and its problems — can resurface.

In our experience, the people most surprised by these consequences are owners who assumed that a dead company is a harmless company. It isn't.

The Cost of Doing Nothing

Let's put numbers to this. A dormant SIA that files zero-activity reports costs approximately:

| Item | Annual Cost | |------|------------| | Annual report preparation (if using an accountant) | EUR 100-300 | | Legal address maintenance (if rented) | EUR 200-500 | | State fee for annual report filing | EUR 0 (electronic filing) | | VID zero-declarations (accountant fee) | EUR 50-150 | | Total annual maintenance | EUR 350-950 |

If you handle the filings yourself and use your own address, the cost drops close to zero in direct fees — but the time investment is real. Missing even one deadline triggers the cascade described above.

Compare this to the one-time cost of proper SIA liquidation: roughly EUR 60 in state fees plus EUR 500-1,500 in professional fees, depending on complexity. After 1-2 years of dormancy costs, liquidation typically pays for itself.

Your Three Real Options

If you're sitting on a dormant SIA, you have three paths forward. Each has a clear use case.

Option 1: Liquidate properly. Best choice if you have no plans to revive the business. The process takes 4-6 months and results in a clean exit — no trailing obligations, no risk of surprise claims. This is the option we recommend in most cases.

Option 2: Keep it dormant and file diligently. Makes sense if you genuinely plan to restart the business within the next 12-18 months. Registering a new SIA later costs EUR 150-250 and takes 1-3 days, so the advantage of keeping an existing one is mainly about preserving the company's history, contracts, or specific permits. (If none of those apply, just liquidate.)

Option 3: Sell the company. A dormant SIA with a clean history, filed reports, and no debts has modest resale value. Some buyers prefer acquiring an existing entity — particularly if it has a VAT registration, a specific NACE code, or a company history that helps with bank account applications. Typical prices range from EUR 500 to EUR 3,000 depending on the company's age and status.

There is an unofficial fourth option: do nothing and wait for the UR to strike the company off. We don't recommend this. The process is unpredictable in timing, doesn't clear your tax obligations, and leaves you exposed to liability. It's the worst of all worlds.

A Note on IK and Self-Employed Status

Individual merchants (IK) and self-employed persons face a simpler version of this problem. An inactive IK still has filing obligations, but the closure process is significantly faster and cheaper. Self-employed individuals can deregister through VID's EDS system in a matter of days. If you're maintaining one of these structures with no activity, the math is even more clearly in favor of closing it.

Dormant SIA Costing You Money Every Year?

Annual reports, registered office fees, and potential UR strikes add up fast on a company that earns nothing. We assess your current filing status, calculate whether liquidation, maintenance, or sale is the cheapest path forward, and execute whichever option you choose.

Get a dormant company assessment →