Latvia Golden Visa: The Ultimate Guide

When it comes to investment migration, it doesn’t matter how small or seemingly unattractive of a country you are, you can still dish out residency and rake in those investment dollars.

How do we know?

Latvia has gone and done just that. 

The country’s economy suffered a major blow during the economic crisis of 2008. In fact, it was one of the worst-hit countries in the world. 

So, it launched a residence by investment (RBI) program to attract foreign investment and help get its economy back up on its feet, sooner rather than later. 

At a price of €250,000, it has been successful in getting many non-EEA nationals to sign up. And, it turns out that Latvia is not a bad place to invest after all – its economy has experienced rapid growth.

The Latvian residence, amicably called the Latvian Golden Visa, offers the cheapest residency by investment in Europe. It’s also a cheap program if you want to invest in real estate, as you get the most bang (square footage) for your buck in Latvia (out of all Golden Visa countries considered). 

Plus, it’s one of the cheapest places to live in that part of the world and its residency makes the entire Schengen area your playground. 

In this article, we will tell you all that there is to know about this program, why you should apply, and guide you through the application process step-by-step. 

What is Residence by Investment?

Let us first explain the fundamentals of what residence by investment is and what it isn’t.

You’re allowed to live, work, and study in a country if you’re a legal resident there. You become one by obtaining a residence permit.

In many cases, governments have set up programs through which you can qualify for residence by making an investment in their country.

Once granted, your residence permit gives you, a foreign citizen, and your family the right to live in the country temporarily (temporary residence) or permanently (permanent residence).

What a residence permit is not is citizenship. So, you won’t have the same rights as the citizens of the country.

For example, if you’re a Latvian resident, you can travel visa-free to Spain but you won’t be able to live and work there, even though a Latvian citizen would have that right.

Why Latvia?

Latvia is certainly not the first country that comes to mind when you think about obtaining a residency or citizenship somewhere in Europe. And it’s exactly this under-the-radar quality about it that we like.

Latvia is a country that sits in between the other Baltic states of Lithuania and Estonia, on the shores of the Baltic Sea. Some say it’s in Eastern Europe and others say it’s in Northern Europe, but one thing is clear – it can be your gateway to the European Union.

If you come from a country that doesn’t offer visa-free access to the Schengen zone or if you’re sick of doing the ‘Schengen Shuffle’ (hopping in and out of the Schengen area to stick with the 90-day rule), then residence in Latvia will let you get that benefit.

That’s because Latvia is a long-standing member of the European Union, the Schengen zone, and the Eurozone, so you know its political and economic stability are rock-solid.

The country is also known for its pro-business attitude and relatively low corporate taxation, which is always good to have in a country that you’re investing in.

What’s more, there are plenty of real estate opportunities that haven’t been capitalized on by anyone else.

All in all, Latvia’s Golden Visa is ideal for those looking to:

• Form a company in the EU
• Obtain EU residency for the whole family
• Obtain EU residency with minimal physical presence
• Get visa-free travel to all Schengen states

So, let’s see exactly how you can take advantage of those investment opportunities and obtain residency in this small, yet advantageous, country.

Latvian Residence by Investment

You’d be forgiven if you haven’t heard of Latvia before, or if you don’t have a clue as to where it’s located.

But believe it or not, Latvia actually has one of the oldest and longest-running residence by investment programs in Europe. It launched back in 2010 when it was in a financially dire situation and needed the foreign investment to get back up on its feet.

Like other similar programs, it’s specifically geared toward high-net-worth individuals and families, but it actually offers the cheapest way to obtain residence in Europe.

Also known as the Latvian Golden Visa, investors are offered residence in exchange for an investment of a set amount.

Things were great when the program had its heyday back in 2012-2014, raking in nearly €900 million annually and approving nearly 2,500 applicants and over 3,000 of their dependents.

It used to charge no government fees, but since the popularity of the program absolutely skyrocketed, the government ‘wised up’ and added extra fees.

Now, Latvia raises between 30 and 40 million euros every year. For a country of this size, that’s still a considerable sum of money.

But Golden Visa programs in Southern Europe like Portugal, Spain, and Greece, have been gaining more and more traction at the expense of Latvia.

It remains to be seen how Latvia’s Golden Visa fares in the future, and if it will still be able to interest foreign investors with its real estate and pro-business climate.

What’s Up with the Vietnamese?

A good chunk of the Latvian population speaks Russian in addition to the local Latvian, so it comes as no surprise that Russians are the main demographic seeking residence in Latvia (50%).

They are joined by Chinese and Ukrainians as some of the main investor groups. But the Vietnamese?

Vietnamese citizens made up over 30% of applicants for Latvian residence in 2019, up from a flat 0% in 2017. And the upward trend is continuing.

Why? Because they have large families of 3.8 members, on average. That’s much higher than the families of other main applicant groups.

Combine that with the fact that the Vietnamese go for the absolute cheapest investment option that is company formation (98% of all Vietnamese applicants), and it all starts making sense.

At just €50,000, the business investment is a low-entry option to gain European residence for themselves and their family. Needless to say, the penchant the Vietnamese have for Latvia (or, rather, its Golden Visa program) is not going to go away any time soon.

Alternatives to Latvia’s Golden Visa Program

Not all residence by investment programs are made equally. Some are better suited for one group of people, whereas the benefits of another program might attract others more.

Here are four alternative Golden Visa programs that you can choose if you feel that Latvia just isn’t doing it for you.

• Greece. Although it costs the same – €250,000 – to get residence in Greece by investing it directly into real estate, Latvia is a place that’s more politically and economically stable than Greece. Remember Greece’s European bail-out talks, or its economic collapse a decade ago? Learn more about Greece’s Golden Visa program.
• Ireland. If accessing the Schengen area visa-free isn’t enough for you and you’d like to have access to Ireland and the UK instead, then investing in the Irish Investment Programme (IIP) could be a better choice. That said, the minimum investment is 1 million euros. Learn more about Ireland’s Golden Visa program.
• Spain. Spain has so much character and life that it truly rivals Latvia. However, you will have to invest double – €500,000 – to become a resident there. One other thing that’s more convenient in Spain is that the residency must only be renewed every two years as opposed to annually in Latvia. Just watch out for the taxes in Spain!
• Portugal. Compared to Latvia, you will have to invest more in Portugal, as the minimum is €350,000. However, what you do get is a warmer climate, arguably an even better quality of life, and the ability to apply for citizenship in just five years. Learn more about Portugal’s Golden Visa program.

How to Obtain a Latvian Golden Visa

Let us begin by saying that we consider the minimum investment in Latvia to be €250,000, even though there is also a €50,000 investment option.

Why’s that?

Well, as you will see, the dirt-cheap €50,000 option requires you to make a minimum tax payment every year, which doesn’t truly make it the cheapest option.

So, without further ado, here are the four options that could net you Latvian residence.

Option 1: Real Estate investment

First, you can invest in real estate in Latvia to become a resident.

The total sum that you must invest is €250,000, plus 5% of the property’s value in government fees. So, at the very least, you’re paying €262,500.

However, you cannot buy just any real estate in any part of the country.

If you purchase in the capital of Riga or in Latvia’s premier seaside resort Jurmala, which is where you definitely want to be if you’d like to spend some time in the country, you are limited to one property. If you choose to purchase elsewhere, the minimum investment may be split to pay for two properties.

The real estate market in Latvia is truly full of great opportunities if you care to look. And for a sum like a quarter of a million euros, you could get a large, top-notch apartment in the heart of the city center of Riga.

However, keep in mind that properties are not always very liquid, so when it comes time to sell, you could be playing the waiting game.

Option 2: Business Investment

Is your main objective a European residence for yourself and your family? Then there is no cheaper option than investing in Latvian business formation.

Only €50,000 is needed to invest in a business in Latvia. You can either open your own company or become a shareholder in an existing Latvian company.

You must maintain your investment for at least five years. There is also a €10,000 government fee to be paid, but the real catch is that the company must pay at least €40,000 annually in tax.

If you do the calculation, then your total investment for the five years is still a minimum of €250,000 (€50,000 initially, plus five years of paying at least €40,000 in tax).

The €50,000 is a valid sum if you invest in a company with a turnover of less than 10 million and with a number of employees not exceeding 50. If you wish to invest in a company larger than that, you will need to double the investment to €100,000.

Option 3: Purchase Government Bonds

There is also the option to purchase government bonds to the tune of €250,000.

The bonds will be non-interest bearing, so there won’t be any surprises at the end of the mandatory five-year investment holding period. You will get back what you paid in if you choose to withdraw the funds.

Plus, there will be a government fee of €38,000 payable to the state budget if you choose this investment option.

Option 4: Make a Bank Deposit  

Finally, you can make a deposit of €280,000 at a Latvian bank or a credit institution to purchase its bonds. You will need to hold this investment for five years.

You will be able to receive any interest that might be applicable, unlike with the government bonds. So, if you trust the financial institutions of Latvia and truly want a set-it-and-forget-it investment, then this could be the right option for you.

Don’t forget that an extra government fee of €25,000 applies if you go this route.

What’s the Best Option?

While we can’t say what the best option is for you, we can discuss a few hypothetical scenarios which you can then apply to your personal situation.

Let’s first start by looking at what the most common investment option is:

•   55% of foreign investors choose to put their money in real estate
•   43% invest in forming a company
•   Only 2% chose either the government bonds or the bank deposit option

What does this tell us? Well, the fact that over half of the investors chose to go with real estate – also raising 90% of the total capital for the Latvian Golden Visa program – is significant.

It tells us that the Latvian real estate market is full of good deals and that various analysts are predicting Latvian property to appreciate in value rapidly.

Thus, if you’re a wealthy individual looking to buy European residence and want to invest in something once and pretty much forget it for the next five years, real estate is the way to go.

Meanwhile, company formation is the best option for those seeking the absolute cheapest investment.

For just €50,000, your entire family could come and live and travel in Europe. Of course, there is the annual requirement to pay at least €40,000 in government tax, but it’s not that hard to achieve if you’re running a legitimate business.

Finally, as always, keep in mind that the more you pay, the easier things tend to get. Less headache might be worth a bigger upfront investment to you.

The Step-by-Step Golden Visa Application Guide

One of the great things about Latvia’s residence by investment program is that the process of obtaining residency is uncomplicated.

Plus, the entire process takes two to three months, so you could be traveling freely in Europe in pretty much no time. Your family can also come, including a spouse, dependent children, and parents/parents-in-law.

Before you apply, however, you should determine whether you’re eligible. The requirements are pretty standard and similar to other Golden Visa programs.

One must have:

• Considerable wealth (this RBI program is geared towards high-net-worth individuals)
• A good character
• A clean criminal record (you will be asked to provide a police clearance from all countries of past residence)
• No tax debts anywhere in the world
• Good health (you will be asked to provide a medical certificate)
• Enough money for oneself (and all family members, if applicable) to maintain your lifestyle in Latvia
• Health insurance for the entire family for at least one year

If you’ve determined that you’re eligible to apply, obtaining residence is then a quick process.

Step 2: Apply for Residence in Latvia

Next, you will need to actually fill out your application and submit it to the Immigration Department of Latvia, along with the accompanying documents that are required of all applicants and their dependents.

After you submit the application, the waiting period is approximately two to three months.

Once you’ve been approved as a Latvian resident, you will need to decide whether you want to physically reside in the country or not. 

3. RENEW RESIDENCE ANNUALLY

This is somewhat of a drag, but after your first two years of residence, you must renew your residency every year until year five. This means traveling to the country, filling out paperwork, and pleasing the bureaucratic apparatus. 

Note, that there is no minimum stay requirement to renew your Latvian residence, but you are expected to visit the country once a year to be eligible for an extension.

No additional investment will need to be made as you go to renew your residence, but your original investment must be kept for the entire period of five years.

That means that if you chose the real estate investment, you will be expected to maintain it and not sell it. And if you chose to invest in a business, you will need to maintain it or retain your shareholder rights, as well as pay a minimum of €40,000 in government tax each year.

Step 4: Get Permanent Residency

This isn’t a necessary step in your Latvian residency journey. Rather, it’s a follow-up if you’re interested in spending more time in the country or eventually qualifying for citizenship.

The Latvian Golden Visa program is just a residency program, not a permanent residency one. So, if you’d like to obtain permanent residence, you must have actually (physically) resided in Latvia for at least four years out of five.

In other words, during your time of being a resident of Latvia, you must spend four years living in the country for 183+ days a year, which also means you’ll be paying tax there at a flat 23% rate. 

If you see yourself living in the country for a while, then you’ll need a Latvian language certificate at level A2 to be considered for permanent residency. 

Also, you must have some knowledge of the Latvian language, know the basic historical facts of the country, and be able to recite the national anthem. In other words, you will need to pass the citizenship exam. 

If you’ve spent a good portion of your time in the country for an entire decade, this shouldn’t be an issue.

And, it’s handy that Latvia allows dual citizenship. This means that you won’t have to renounce your first citizenship to become a Latvian citizen.

The Pros of The Latvia Golden Visa

Whether you’ve already decided to go for the Latvian Golden Visa or you remain on the fence, you can still appreciate all of the benefits that a Latvian residency offers. 

An affordable residency option. With investment routes starting at just €250,000, Latvia is one of the very cheapest ways to get residency in Europe at the moment. 

Travel all over Schengen. Latvian residency gives you access to the entire Schengen area visa-free. This means you will be able to travel anywhere in the free travel zone of Europe. No border checks, here you come.

A 5-year residency. Some countries only offer residency for two years and then require you to extend it. In Latvia, although you will have to renew your visa, you won’t have to worry about getting your residence rejected for five whole years. 

Bring your family. You can add all of your dependent children, your spouse, and even your parents and parents-in-law (if they’re financially dependent on you) under one application.

Fast processing. With a processing timeline of two to three months for a residency application, Latvia offers one of the fastest routes into Europe’s Schengen area right now. Expedite the process even more by gathering all of the necessary documents beforehand. 

No physical residency requirement. You can come and go as you please and don’t have to live in Latvia. However, you must visit the country at least once a year to maintain your residence permit. 

Latvia is well-connected. Just 90 minutes away from Moscow by air, and with so many flight connections to all of the European hubs, Latvia has great links to other countries. 

A favorable tax environment. Latvia has a 9% corporate tax rate and a government that’s very receptive to foreign investment and new business initiatives. It has a highly developed economy that you can leverage as well.

Part of the Eurozone. The single currency zone is advantageous for many different reasons, but primarily because it saves you money and time. There will be no foreign exchange fees, no time spent hunting down the best exchange rates, and so on.  

High quality of life. You will be able to live like a king in Latvia, a country that’s safe, affordable, and European. That is, if you choose to reside there at all – which isn’t necessary.

No frills. There are no interviews, no need to speak Latvian, and certainly no need to travel to Latvia to obtain your residence permit. 

An outstanding passport. If you go for Latvian citizenship in ten years’ time, you will be glad to know that it’s ranked 10th in the world. This means you’ll get visa-free access to 179 countries in the world, including the visa-waiver program to the United States.

Dual citizenship is allowed. Since very recently, Latvia allows its citizens to have two (or more) passports. So, if you become a naturalized citizen of this European country, you won’t have to give up your first passport – the best of both worlds.

The Cons of THE Latvia GOLDEN VISA

Even though the Latvian Golden Visa program is generally great and really affordable too, it’s got some drawbacks that are worth mentioning.

It’s got a minimal residency requirement. Wouldn’t it be great if you didn’t have to visit Latvia at all to obtain and then retain your residence permit? Well, because Latvia is in the European Union, that’s simply not possible. You will have to visit the country at least one day a year to remain a resident.

No access to Ireland and the UK. If you think that having a Latvian residence will open up doors to the British Isles and Ireland, you’d be wrong. Since those countries aren’t part of the Schengen zone, you will need a visa to visit them.

You must renew your permit annually. This can be a real drag, especially if you don’t reside in Latvia physically. You will have to fly yourself, as well as your spouse and other dependents to Latvia for at least one day every year to renew your residence permit.

Income and social taxes are high. Latvia taxes all income made within its borders. Despite the 23% flat income tax, the effective tax rates can go all the way to 40%, and then some. 

Is the Latvian Golden Visa For You?

There is no denying that Latvia is a beautiful country filled with culture. The quality of life there is great, but the cost of living is still on the lower side when compared to other European countries.

It also has bucketloads of investment potential. You just have to care enough to take a closer look.

Whether you go for real estate, the business investment, or one of the other options, you will most likely come out on top. Plus, you’ll get to enjoy residence in Europe, with visa-free access to the entire Schengen area.

Wave goodbye to the border control for the next five years (at least). 

But as we’ve seen in the recent past, the Latvian government has tightened its Golden Visa requirements and upped the minimum investment sums. 

With more countries than before offering legal residence in Europe, it pays to move fast and lock in today’s prices if they seem right to you. 

For years, we have been advising global citizens as to where they should obtain residence and citizenship and plant other flags. 

People trust us because we know what to pay attention to and how to make the world of investment migration work in your favor.

We can help you apply for Latvian residence or find a more suitable alternative. Let’s talk.