Like Estonia, Latvia charges 0% CIT on retained and reinvested profits. Furthermore, inside Latvia's 5 Special Economic Zones (Liepāja SEZ, Rēzekne SEZ, Latgale SEZ, Freeport of Riga, Freeport of Ventspils), investors receive an 80% rebate on distributed dividend CIT (cutting the 20% distribution tax to just 4% effective!) and an 80%–100% real estate tax rebate up to the regional aid ceiling of 35%–50% (large) and 55%–70% (small).
Scheme: 0% Retained Profit CIT Model + 5 Special Economic Zones / Freeports (80% Dividend CIT & Real Estate Tax Rebate) + Green Corridor · Relief Duration: Indefinite 0% CIT on retained profits + SEZ tax rebates up to 2035 · R&D/BSS Min-CAPEX Reduction: -85%.
| NUTS-2 | Region / Industrial Sub-Zone | Large Ceiling | Medium (+10%) | Small (+20%) | Std Min CAPEX | R&D / BSS Min CAPEX | Key Clusters & Just Transition Rules |
|---|---|---|---|---|---|---|---|
LV00-REG |
Kurzeme / Latgale / Vidzeme / Zemgale (Liepāja SEZ, Ventspils & Latgale SEZ) | 50% | 60% | 70% | €500,000 | €100,000 | 50% large / 70% small ceiling outside Riga; 80% dividend CIT rebate inside Liepāja, Ventspils, Rēzekne & Latgale SEZs. |
LV00-RIGA |
Riga & Pierīga (Freeport of Riga & Capital Metro) | 30% | 40% | 50% | €1,000,000 | €200,000 | 30% large / 50% small ceiling in Riga & Pierīga + 0% CIT on all retained profits. |
Class-A warehouse/factory rent, office rent, Eurostat industrial electricity tariff, and gross monthly salaries across 2 benchmarked hubs.
| City Hub & Special Zone | NUTS-2 & Aid | Industrial Rent + Svc (€/m²/mo) | Class-A Office (€/m²/mo) | Industrial Power | Prod. Operator | Mfg. Engineer | Senior R&D Eng. | Logistics Connectivity |
|---|---|---|---|---|---|---|---|---|
| Riga & Liepāja / Ventspils SEZ Corridor 0% Retained CIT + Liepāja/Rēzekne SEZ 80% Dividend Tax Rebate (4% Effective) |
LV00-REG (50% / 70%) |
€5.15 + €1.10 | €16.50 | €139/MWh | €1,420/mo | €2,540/mo | €4,250/mo | 9.2/10 (3 Deepwater Ports + Riga AirBaltic Hub + Rail Baltica) |
| Liepāja (Special Economic Zone & Baltic Port) Liepāja SEZ (80% Rebate on Dividend CIT = 4% Effective + 80% Real Estate Tax Rebate) |
LV00 (30% / 50%) |
€4.60 + €1.05 | €11.80 | €135/MWh | €1,290/mo | €2,250/mo | €3,650/mo | 8.8/10 (Direct Ferry Routes to Germany/Scandinavia + Green Industrial Park) |
0% Corporate Income Tax on all retained and reinvested profits indefinitely. 20% nominal rate (20/80 = 25% on net dividend) applies only upon profit distribution; reduced by 80% (to 4% effective!) inside Latvia's 5 SEZs.
Retained Profit Rule: Statutory 0% CIT on 100% of retained & reinvested profits; 4% effective dividend tax in Liepāja, Rēzekne, Latgale SEZs & Riga/Ventspils Freeports.
Dividend WHT: 0.0% standard (0.0% under EU Parent-Subsidiary Directive).
23.59% Employer Mandatory State Social Insurance Contribution (VSAOI); above €105,300/yr, the same rate continues as Solidarity Tax.
Uncapped Portion: 23.59% · Capped Portion: 0.0%.
0% CIT on all retained R&D earnings + 80% dividend CIT rebate in SEZs + Startup Law fixed flat social tax regime (~€400/mo fixed employer tax for qualified deep-tech startups).
Available Aid Instruments: 0% CIT on Retained & Reinvested Profits, 80% Rebate on Distributed Dividend CIT & Real Estate Tax in 5 SEZs (4% effective dividend tax), LIAA Large Investment Cash Grant (up to 30%), Just Transition Fund Grants in Latgale & Vidzeme.
State-aid consultancies, build-to-suit industrial developers, and cross-border tax/payroll firms active in Latvia.
Premier German-origin cross-border legal, tax, BPO payroll, and Special Economic Zone / FEZ advisory covering all 9 CEE and Baltic jurisdictions.
Market-leading Francophone and DACH inbound investment practice in Romania, Poland, Czechia, and Hungary, covering R&D tax credits, CAM/ZUS payroll, and state-aid audits.
Europe's largest industrial and build-to-suit (BTS) factory developer with 20M+ m² delivered across CEE Special Economic Zones.
Pan-European developer of high-spec technical, light-industrial, and logistics parks with solar-ready roofs across Romania, Czechia, Hungary, Slovakia, Poland, and the Baltics.
Tenant-rep industrial & office brokerage paired with location strategy, labor-catchment modeling, and state-aid grant negotiation.
End-to-end CEE greenfield land acquisition, brownfield lease brokerage, and municipal/SEZ state-aid incentive structuring.
In Latvia, regional aid ceilings under 0% Retained Profit CIT Model + 5 Special Economic Zones / Freeports (80% Dividend CIT & Real Estate Tax Rebate) + Green Corridor reach up to 50% for Large Enterprises, 60% for Medium Enterprises, and 70% for Small/Micro Enterprises. R&D and modern business service centers benefit from up to a 85% reduction in minimum CAPEX thresholds.
Latvia applies a 20.0% standard CIT (0% Corporate Income Tax on all retained and reinvested profits indefinitely. 20% nominal rate (20/80 = 25% on net dividend) applies only upon profit distribution; reduced by 80% (to 4% effective!) inside Latvia's 5 SEZs.). On payroll, employers contribute 23.59% nominal social security (23.59% Employer Mandatory State Social Insurance Contribution (VSAOI); above €105,300/yr, the same rate continues as Solidarity Tax.). For R&D and software IP, Latvia offers: 0% CIT on all retained R&D earnings + 80% dividend CIT rebate in SEZs + Startup Law fixed flat social tax regime (~€400/mo fixed employer tax for qualified deep-tech startups).