SIA Share Capital: EUR 2,800 Standard vs EUR 1 Micro

EUR 2,800 or EUR 1 — that's the choice every SIA founder faces in Latvia. The standard share capital has been EUR 2,800 since 2004. The micro-capital option (starting from EUR 1) was introduced to lower the barrier for new entrepreneurs. Both give you a fully registered SIA with limited liability. The difference lies in what happens after registration.

Standard Capital: EUR 2,800

You deposit the full EUR 2,800 into a temporary accumulation account before registration. After the SIA is registered, this money becomes the company's asset — available for business operations. You haven't "paid" it to anyone; it's your company's starting equity.

With standard capital, there are no restrictions on profit distribution. Once the company earns profit, shareholders can take dividends at any time (subject to the standard 20/80 CIT on distributions). Clean, simple, no strings attached.

Micro-Capital: EUR 1 to EUR 2,799

Set your share capital at any amount from EUR 1 upward. The deposit is smaller, but a mandatory mechanism kicks in: at least 25% of annual net profit must be retained in the company until the share capital reaches EUR 2,800.

What that means in practice: a SIA with EUR 1 capital that earns EUR 16,000 in net profit must keep EUR 4,000 in the company. The founder can distribute the remaining EUR 12,000, but not a cent of that EUR 4,000 until the capital threshold is met.

The retention continues every year. For a modestly profitable company, reaching EUR 2,800 through retained earnings alone can take 1–3 years. Shareholders can accelerate this by making additional capital contributions at any time.

Quick Comparison

| | Standard (EUR 2,800) | Micro (EUR 1+) | |---|---|---| | Initial deposit | EUR 2,800 | EUR 1–2,799 | | Profit distribution | Unrestricted | 25% retention until EUR 2,800 reached | | Bank perception | Strong | Weaker (especially at very low amounts) | | Best for | Most businesses | Budget-constrained startups, concept testing |

In our experience, the EUR 2,800 standard capital is the better choice for about 70% of new SIAs. The money stays in the company (it's not a cost), and you avoid the profit restriction headaches. Micro-capital makes sense when you're genuinely testing a concept and want to minimize upfront commitment.

For a deeper analysis of the micro-capital trade-offs, see our detailed guide to low-capital SIAs.

---

Not Sure Which Capital Option to Choose?

The share capital decision affects your dividend strategy and banking relationships. Corvus Accounting & Tax can model both scenarios with your projected numbers.

Get advice →