

June 2011
In Latvia it is the Citizenship and Migration Affairs Office of the Latvian Republic that is in charge of issuing residence and work permits to foreigners. Formerly these issues were the responsibility of several government agencies. Now if a foreign employee who has been invited to work in Latvia needs to legally stay in the country for a period of between 90 days and six months, the employer must file a request for a residence permit for the employee with the Citizenship and Migration Affairs Office. The Citizenship and Migration Affairs Office then issues a residence permit and a work permit simultaneously. As before, preference will be given to Latvian citizens in the labour market. This means that before inviting a foreign worker, the employer must first register the vacancy with the State Employment Agency. If no candidate with sufficient qualifications can be found in Latvia within one month, the employer may hire a foreign national for the position.
According to the new amendments to the Immigration Law, from July 1, 2010 a five-year residence permit in Latvia can be given to investors on the following grounds:
The aforementioned grounds can also be used to issue residence permits to the spouse, underage children and dependants of the foreign investor.
In late 2010, temporary residence permits in Latvia were issued to 100 foreign investors and with members of their families counted in the total number of issued residence permits was 230; 61% of the investors were given temporary residence permits after purchasing real property in Latvia, 34% were given residence permits as they had investments in the subordinated capital of Latvian banks and the remaining 5% of all investors were given residence permits after setting up limited liability partnerships in Latvia. Statistics show that the majority of investors getting residence permits in Latvia are Russians and citizens of other CIS nations.
In April 2010, Latvia’s parliament, the Saeima, approved draft amendments to the country’s immigration law, which have not yet come into effect and are currently going through legislative procedures. The new proposed amendments will introduce stricter rules for the issuance of temporary residence permits to foreign investors. Thus, for example, investment of LVL 25,000 (EUR 35,500) in the share capital of a Latvian company and the payment of LVL 20,000 (EUR 28,400) in taxes will only entitle the investor to get a residence permit if the company’s annual sales do not exceed LVL 7 million (EUR 9,940,000) and the company employs no more than 50 people. If the company does not exceeds these criteria, i.e. either its annual sales are greater or it employs more people, the minimum investment for qualifying for a residence permit must be at least LVL 100,000 (EUR 142,000). At the same time in its current revision, in the case of investments in large companies there is no requirement that they must pay at least LVL 20,000 (EUR 28,400) in taxes.
Amendments are also planned for the issuance of temporary residence permits to buyers of real property. In Latvia there is such a concept as the ‘cadastre value of real property’. The cadastre value of a property is calculated on the basis of regulatory documents and is used for the calculation of the state duty that must be paid when title to the property is registered in the National Land Register, as well as in the calculation of real property tax. According to the proposed amendments, an additional condition will be added that the cadastre value of the real property purchased in Riga, the Riga region or a large city must be at least LVL 30,000 (EUR 42,600) and for other regions of Latvia it must be at least LVL 10,000 (EUR 14,200).
Despite the proposed amendments, getting a temporary residence permit in Latvia will remain a viable option for foreign investors and offers the added benefit that the holder of a Latvian temporary residence permit can freely travel within the European Union.
It should be noted that a foreign national who has been issued a temporary residence permit in Latvia may stay outside Latvia as long as he/she wishes. However, a holder of a permanent residence permit may not leave Latvia for longer than 12 consecutive months at a time, except for compelling reasons that do not depend on the holder’s personal circumstances or getting an education. At the same time a foreigner cannot get a permanent residence permit in Latvia if he/she has not stayed in Latvia for longer than 6 months in a row or for one year with short breaks over the past five years.
Yelena Rakova,
Sworn Attorney of the Republic of Latvia
Contact partner AUDIT ADVICE LLC, Nexia International (Riga, Latvia)
www.auditadvice.lv
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