Banking Sector In Latvia
15 April, 2016
Whenever people decide to set up offshore companies, one of the key factors for them to consider is the expected location of their companys bank account. A company without a bank account is practically without any use, the only exception being the opportunity to use it as a holding vehicle for other offshore structures.
Today, ICD Fiduciaries takes a look into the banking sector in one of the jurisdictions that has become a widely popular destination for business account opening for different types of offshore entities. That jurisdiction is Latvia. Latvia is a relatively small country with a population of 2 million people, and it is located in Eastern Europe right next to the Baltic Sea. Due to the open attitude from local banks towards non-resident clients, Latvian banks hold a significant amount of foreign assets.
What makes Latvia attractive as a place for financial operations:
One of the main things the customer wants to hear before enetering into business relatioship with any bank, is information about the fees his company will have to face. Most of the Latvian banks that are willing to work with offshore companies, do not require high minimum account balances. Normally, the required threshold should not exceed thousand euros per month. However, it might be higher, if the company is registered in a pure tax haven (Seychelles, Panama, etc). Transfer fees and their execution times are the same as the ones applied by any well-known international banking institution, they are not particularly higher or lower. One of the aspects that makes Latvian banks more attractive, compared to other low-cost Eastern European banks, is the ease of document preparation. In Latvia, no compliance department will ever ask for corporate documents to be translated from English to Latvian, including Power of Attorney and Declaration of Trust. It is a standard practice to accept documentation in English. And, this is something that cannot always be said about the banks in Poland, Czech Republic, Serbia, etc. Chances are the banks in these countries would very likely require translation to their national languages.
Things to bear in mind:
Sometimes customers who are new to offhsore business and who are proposed to open their business account in Latvia, are kind of concerned about the reputation of the particular jurisdiction, as in many cases they know very little or nothing about Latvia as a country. However, there is nothing to be worried about, as Latvia is a member of the EU as well as the Eurozone. Also, the latest results of stress tests, conducted by the European Central Bank, show that all Latvian banks included in the data have passed these tests successfully. Despite the attractiveness of one or another country as a place for business or financial operations, each case and customer should be considered individually. Latvia remains one of the options in the bustling banking sector.
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