Renting a legal address is considered in-demand business services at the moment.
The legal address of an enterprise – is the place where the company is accessible for correspondence and communication with third parties. It is always indicated under requisite information in contracts, invoices and other legal documents that generally regulate the company’s activities with the outside world.
Often an enterprise, especially if it is a manufacturing company with a production plant as a separate place of economic activity, cannot combine an office and, for example, a small factory. Also, maybe the beneficiary’s temporary cannot afford to hire a secretary or office manager. In this case virtual offices might be a good solution.
Such services are considered in-demand business services in all developed countries. In addition, virtual offices significantly reduce the costs of maintaining the physical space and relieves the entrepreneur of a large tax burden for the workers employed.
The importance of a legal address
Costs for renting a legal address will vary depending on both the chosen set of legal addresses and their location. It is logical that in the capital of Latvia – Riga – costs for renting a legal address will be much higher than, for example, in Rezekne.
Different services can be included in the rent of a legal address. The simplest set includes the processing, managing of correspondence and sending it to the client and receiving notifications of incoming correspondence. Why is it important for the existence of a company? In recent years, the State Revenue Service (SRS) has paid significant attention to the location of companies’ legal addresses and their factual matching. Buildings in which ten (10) or more enterprises are registered are considered more risky locations (even though these buildings are office-only buildings, which is only logical). Without meeting the factual signs of the company’s existence at its legal address, the company may be closed and/or its VAT registration may be taken away from it. In principle, based on our practice, if 10 (ten) legal addresses have already been registered in an office building, the State Revenue Service is notified after receiving the eleventh application for registration at that location in the Register of Enterprises. Company registration is accordingly extended for approximately 10 days until the SRS is satisfied that there are no tax debts at the locations associated with that building.
Historically, this is due to the fact that for many years in Latvia non-existent companies have been registered in all sorts of places, including ruined slums or even in a transformer box.
Also at the beginning – when a company applies for Latvian VAT registration – the possibility that state institutions will check the legal address of the company is very high.
Although all communication in connection with the digitalization of public services mostly takes place through the Electronic Declaration System (EDS), the State Revenue Service when checking the legal address does not choose online services, but still sends a letter in paper form to the legal address. This is why it is so important to have some person at the legal address who can respond to the correspondence received in time and forward it to its destination, because usually such a letter has a very short response time. Otherwise, it is possible to lose both the already existing VAT registration and the initial one, as well as to lose the status of the company. Not to mention unnecessary exposure to government agencies.
Especially noteworthy is the case when a company is trying to obtain VAT registration. Such a verification of the legal address of a company before VAT registration, in paper form, will be very much expected. It will also be expected at the opening of a bank account, because the bank is currently analyzing the company’s data in depth.
Change of legal address
Often, when starting a business, companies in Latvia choose a set of services. For example, a company wants to do bookkeeping with a specific firm, as recommended. This firm, in its turn, also offers registration of the company itself, registration of the company’s legal address, lawyer’s services, etc.
But it often happens that, after changing one service in this set, it is necessary to change the entire range of services, including the desire to change the legal address of the company.
Changing the legal address is a process that is usually performed by company lawyers, who carefully check whether the documents that are submitted to the Register of Enterprises meet the requirements of the regulations. But we offer to perform this service instead of you, as a result of which you will already receive a ready decision of a state notary on the change of legal address in your records. And also the information about the change of legal address will be automatically noted in the public commercial register.
