Latvia

Financial Reporting Obligations for Companies in Latvia

1. Registry for Submission of Financial Statements

In Latvia, companies must submit their financial statements (annual reports) to the Enterprise Register of Latvia — “Uzņēmumu reģistrs” (https://www.ur.gov.lv/en/).

2. Legal Forms Required to Publish Financial Statements

The following legal forms in Latvia are obligated to publish their financial statements to the Commercial Register:

  • SIA (Sabiedrība ar ierobežotu atbildību – Limited Liability Company)
  • AS (Akciju sabiedrība – Joint Stock Company)
  • PA (Publiskā akciju sabiedrība – Public Limited Company)
  • ŪBK (Ūdensbūves kompānija – Water Construction Company)
  • KGB (Kredītu garantiju biedrība – Credit Guarantee Association)

Legal forms that are not obligated to publish financial statements include:

  • FID (Fiziska persona — individuālais darījumu uzņēmējs – Sole Trader)
  • PV (Personu sabiedrība – Partnership)
  • SĪP (Sīkumsabiedrība – Micro-Enterprise)

Classification of Undertakings and Criteria for Financial Reporting and Auditing:

Category

Criteria

Micro-Entity

Balance Sheet Total (no more than) EUR 350 000

Net Turnover (no more than) EUR 700 000

Average Number of Employees (no more than) 10

Small Undertaking

Balance Sheet Total (no more than) EUR 4 000 000

Net Turnover (no more than) EUR 8 000 000

Average Number of Employees (no more than) 50

Medium-Sized Undertaking

Balance Sheet Total (no more than) EUR 20 000 000

Net Turnover (no more than) EUR 40 000 000

Average Number of Employees (no more than) 250

Large Undertaking

Balance Sheet Total (more than) EUR 20 000 000

Net Turnover (more than) EUR 40 000 000

Average Number of Employees (more than) 250

3. Audit Requirements for Financial Statements

Under the Auditors Activities Act (https://likumi.lv/ta/en/en/id/36986), companies must audit their financial statements based on specific criteria related to turnover, total assets, and number of employees. The criteria are detailed in the following table:

Category

Criteria

Details

Medium-Sized and Large Undertakings

Obligation

Annual and consolidated annual statements must be audited (reviewed).

Applicable Entities

1. Medium-sized and large undertakings.

2. Undertakings with transferable securities listed on a regulated market.

3. Parent companies in a group.

Audit Report

Must be provided by a sworn auditor (or multiple sworn auditors or a commercial company of sworn auditors, according to the Law On Sworn Auditors.

Small Undertakings

Obligation

Audit (review required under specific conditions).

Conditions Requiring Audit

1. Exceeding two of the three criteria for two consecutive years or in the first financial year (for new entities).

Criteria for Audit

- Balance Sheet Total (more than) EUR 800 000

- Net Turnover (more than) EUR 1 600 000

- Average Number of Employees (more than) 50

Other Cases Requiring Audit

2. If the small undertaking is a parent undertaking of a group.

3. If it is a capital company of a public person, a subsidiary, or a public-private capital company.

4. If international accounting standards are applied.

General Audit Requirements

Scope of Audit

1. Review of the conformity of accounting with laws and regulations.

2. Verification of compliance with laws and regulations governing preparation of annual and consolidated statements.

4. Stock Exchange for Listed Companies

If a company is listed on the local stock exchange, it must publish its financial statements there. The relevant stock exchange in Latvia is Nasdaq Riga (https://nasdaqbaltic.com/).

5. Deadline for Submission of Financial Statements

Deadline

Details

General Deadline

- Not later than 4 months after the end of the financial year.

Deadline for Medium-Sized, Large, and Parent Undertakings

- Not later than 7 months after the end of the financial year.

6. Partial Financial Statements

Certain companies, specifically those not required to submit full financial statements, might need to submit partial financial reports. These often include:

  • IK (Individuālais komersants) – Sole Proprietors may be required to submit simplified or partial statements.

7. Consequences of Not Submitting Financial Statements on Time

Failure to submit financial statements on time can lead to several consequences:

  • Fines: Companies may incur fines for late submission, with the exact amount depending on the delay and specific circumstances.
  • Penalties: Persistent non-compliance can result in additional penalties or legal actions.
  • Legal Actions: Companies that continuously fail to comply may face legal actions, including potential strikes from the business register.

The Enterprise Register may initiate procedures to strike off non-compliant companies, which could lead to their dissolution.

8. Reporting Requirements for Foreign-Owned Branches and Newly Established Companies

For foreign-owned branches, the following conditions apply:

  • Foreign-Owned Branches: Must follow the same financial reporting requirements as local companies, including audit requirements if applicable.
  • Newly Established Companies: Must comply with the same deadlines and submission requirements as other companies, starting from the first financial year after incorporation.

Sources

Source

Link

Enterprise Register of Latvia (Uzņēmumu reģistrs)

https://www.ur.gov.lv/en/

Auditors Activities Act

https://likumi.lv/ta/en/en/id/36986

Nasdaq Riga

https://nasdaqbaltic.com/
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