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Latvia Banking License

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Latvia Banking License: Latvijas Banka Supervision with Full EU Passporting Rights

Banking supervision in Latvia is performed by Latvijas Banka (the Bank of Latvia), which assumed the prudential supervisory functions of the former Financial and Capital Market Commission (FKTK) in January 2023. Latvia is a European Union member state and eurozone member. A banking licence issued in Latvia carries full EU passporting rights under the Capital Requirements Directive (CRD), granting authorised institutions access to retail, corporate, and private banking markets across all 27 EU member states without separate authorisation in each country.

Latvia has substantially reformed its banking sector over the past decade following international scrutiny of its correspondent banking relationships, particularly those involving non-resident client funds. The sector today is considerably more concentrated, more heavily capitalised, and more stringently supervised, with Latvijas Banka applying Basel III standards and close AML/CFT oversight. For international banking groups seeking a Baltic EU base with strong institutional infrastructure, Latvia offers a credible and compliant licensing environment.

Minimum Capital

EUR 5 million minimum paid-up capital for a credit institution licence in Latvia, in line with the CRD minimum. Latvijas Banka may require higher capital based on the proposed business model and risk profile.

Four Eyes Principle

At least two persons must effectively direct the business. Both must pass the Latvijas Banka fit and proper assessment covering professional competence, relevant experience, integrity, and financial soundness.

Qualified Shareholder Assessment

All shareholders holding 10% or more are subject to fit and proper assessment by Latvijas Banka. Changes in qualified shareholding require prior regulatory approval.

Physical Presence

A registered office and genuine management presence in Latvia is required. Latvijas Banka enforces substance requirements strictly and does not authorise nominal arrangements.

AML/CFT Programme

A comprehensive AML/CFT programme compliant with Latvia's Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing is required. Latvia applies enhanced scrutiny to non-resident client business following prior sector-wide incidents.

Corporate Tax

Latvia operates a unique distributed profit tax model: 20% corporate income tax applies only when profits are distributed as dividends. Retained earnings are not taxed, making Latvia highly attractive for banking groups that reinvest capital into growth and reserve building.

Neptune Fiduciaries: Latvia Banking Licence Support

Neptune Fiduciaries advises on Latvian credit institution applications including Latvijas Banka pre-application engagement, business plan preparation, AML/CFT programme design, director and qualified shareholder vetting, and ongoing regulatory compliance support.

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Contact Neptune Fiduciaries at info@neptunecorporate.com or sales@neptunecorporate.com or visit our Contact Us page.

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