Mazkapitāla SIA
Small-capital SIA in Latvia
A small-capital SIA is an SIA whose share capital may be lower than the standard minimum of €2,800, in exchange for stricter conditions on who owns and runs it.
€300 + VAT, the same fixed fee as a standard SIA. See pricing.
Two things to know before you choose it
- Mandatory reserve. While the capital is below the standard minimum, at least 25% of each year's profit must go into a reserve, and only the rest can be paid out as dividends.
- Extra liability for the owners. If the company becomes insolvent while its capital is below the standard minimum, the owners are jointly liable up to the difference between the standard minimum and the capital actually paid in.
Details and the source are below.
What the law requires
Under Article 185.¹ of the Latvian Commercial Law (Komerclikums), an SIA can have less than the standard minimum share capital only if all of the following are true:
- the founders are individuals, and there are at most five of them,
- the shareholders are individuals, and there are at most five of them,
- the board has one or more members, and every board member is a shareholder,
- each shareholder is a shareholder in only one such company.
While the capital is below the standard minimum, the company also has to set aside at least 25 per cent of each year's profit in a mandatory reserve, and it can pay out only the rest as dividends. If the company stops meeting the last three conditions, it has three months to raise its capital to the standard amount. If it is declared insolvent, its shareholders are jointly liable for its obligations up to the difference between the standard minimum and the capital actually paid in.
Source: likumi.lv, Komerclikums, 185.¹ pants. Text checked on 26 September 2026. The law can change, so treat this page as a summary, not legal advice.
Standard SIA and small-capital SIA compared
| Standard SIA | Small-capital SIA | |
|---|---|---|
| Share capital | At least €2,800 | Below that is allowed. In our experience founders often choose €100 (common practice, not a rule) |
| Owners | Individuals or companies, any number | Individuals only, at most five (founders and shareholders) |
| Board | One or more members, who need not be owners | One or more members, and every board member is also an owner |
| Profit | No reserve of this kind | At least 25% of each year's profit goes into a reserve while the capital is below the standard minimum |
| If the company becomes insolvent | Owners' liability is limited to their capital contribution | Owners are jointly liable up to the difference between the standard minimum and the capital paid in |
| Owning several | No limit | An owner can be an owner of only one such company |
| Our fee | €300 + VAT | €300 + VAT |
How we see it
This part is our advice, not the law.
It tends to suit one to five individuals who run the company themselves and want to put less money in at the start.
It tends not to suit a company owned by another company, a structure with outside investors who are not on the board, or someone who already owns another small-capital SIA. In those cases the standard SIA is the route.
Tell us who the owners and board members will be and we'll say in writing which one fits.
Questions about a small-capital SIA
Can I switch from a small-capital SIA to a standard one later?
Yes, by raising the share capital to the standard minimum. In some cases the law requires it: if the company stops meeting one of the conditions above, it has three months to do so (Komerclikums 185.¹ panta sestā daļa). We can help with the change, quoted separately from the formation fee.
Does a small-capital SIA cost less to set up with you?
No, our fee is the same €300 + VAT for both, and it includes the base state registration fee in either case. What differs is the share capital the owners pay in, and the rules the company then follows, such as who can own it and the profit reserve. See the comparison table above.
What is a small-capital SIA?
A small-capital SIA (mazkapitāla SIA) is an SIA whose share capital may be lower than the standard minimum. In return the law sets stricter conditions on who can own and run it, and adds a profit reserve and extra owner liability while the capital stays low. Our fee and the remote process are the same as for a standard SIA.
Why would a founder choose a small-capital SIA?
Mainly to put less money into the company at the start. A founder who runs the company alone or with a few individuals, and who does not need a company or outside investors as owners, can register with a small share capital instead of the standard minimum. The trade-offs are the reserve and the owners' extra liability, explained above.
What does the mandatory reserve mean in practice?
While the share capital is below the standard minimum, at least 25% of each year's profit has to be set aside in a reserve, and only the rest can be paid out as dividends. So if the company makes a profit, part of it stays in the company until the capital is raised to the standard minimum.
What does the owners' extra liability mean?
If the company becomes insolvent while its capital is below the standard minimum, the owners are jointly liable up to the difference between that minimum and the capital actually paid in. With a standard minimum of €2,800, paying in €100 could leave up to €2,700 of exposure. Paying in more lowers it.
Can I own shares in more than one small-capital SIA?
No. Under the law each shareholder can be a shareholder in only one such company. If you already own shares in another small-capital SIA, or expect to want several companies, a standard SIA is the route. Tell us about any existing companies you own and we will say in writing which type fits.
What is the state fee for a small-capital SIA?
The base state registration fee is €20 and it is included in our fee. A one-business-day review costs no extra state fee for a company with a single founder. With more than one founder the state charges three times the base fee, and we add the difference, €40, at cost.
Can a foreign individual own a small-capital SIA?
The conditions in the law say the owners must be individuals, not that they must be Latvian residents or citizens. A foreign individual can be an owner, and the same remote signing applies as for a standard SIA. Check which countries we work with by default, or ask us about yours.
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