Latvia RBI scheme
Latvia currently runs one RBI scheme and it was introduced in 2010. Latvia among other EU member states such as Portugal, Spain, Malta offering RBI scheme (economic residency) to foreign investors who buy property, government stocks or business. Latvia ranked as ‘very high quality’ among EU member states in terms of rights and opportunities associated to their nationalities.
In Latvia, the RBI scheme mostly attracts middle-class Russians, Chinese not necessarily high net worth individuals’ (HNWIs)
RBI – Economic residency
The Latvian residence by investment (RBI) scheme requires, any one of the following..
(i) Requires €250 000 investment in property (AND 5 % of the value of immovable property into the State budget);
(ii) An investment of €50 000 or €100 000 (depending on the number of employees in the company) invested in equity capital of a Latvian company; AND €10 000 to the state budget;
(iii) €280 000 of subordinated liabilities with a Latvian credit institution AND €25 000 into the State budget;
(iii) €250 000 investment in interest-free State securities dedicated to a specific purpose AND €38 000 into the State budget.
- No physical presence requirement specified (requirements only specified for those who apply for a permanent status).
- Latvian residents are liable for personal income tax (PIT) on their worldwide income. Personal income tax rate at 23 %. Dividends received by individuals are taxed at 10 %. Capital gains on disposal of capital assets (e.g. property, shares) are taxed at 15 %.
- Temporary residence for a maximum of 5 years.
- TCNs who hold a residency permit issued in Latvia are allowed to circulate freely in the Schengen area for up to 90 total days in a 180-day period.
In Latvia, tighter background checks were introduced in 2014 following a flood of applications for its RBI scheme that unveiled information leading to an increase in refusals – and even revocation of some permits already granted. The reasons given were the risk of spying and risk to economic security (as many of the applicants could not prove the origin and the legality of their money).
Applicants are screened by the competent authorities. More serious concerns about an individual’s background are handled by the security police.
RBI permits issued
Latvia Residence Permits (2012-2016), according to EPRS study
- Total 35 486
- RBI: 14 04733
- Percentage: 40 %
RBI inflows contributed to 1% of GDP
Top investors by country who have invested in Latvia under RBI scheme
- United States
Real Estate Impact
The impact of the Latvian RBI scheme ‘on the real property market of Latvia until 2014 was significant. In some regions of Latvia, the share of real property transactions in which foreigners were involved reached more than 50%.