Eternity Law International News Investment license in Latvia

Investment license in Latvia

Published:
May 10, 2023

Like other Baltic countries, Latvia has a very attractive policy for potential investors. Therefore, large companies are trying to invest money in this country. Since the financial market regularly develops, new tools for investing appear. One of these ways is crowdfunding.

It appeared because banks check their clients very thoroughly and are not always ready to believe in the ideas of potential businessmen to issue finances to implement their projects. As a result, they have to look for very large amounts of money, which not every bank is ready to give. Thanks to this tool, a large number of investors contribute small amounts, but in the end, it yields large investments.

Since this process is extremely important, crowdfunding in Latvia is developing at a decent pace.

Who can grant investment licenses in Latvia

Crowdfunding is an intermediary between companies that have ideas with companies that have money. At the same time, investments made with the help of crowdfunding can be considered as either a loan or an investment in the company’s capital.

According to EU legislation, any investment activity in Latvia can be carried out by companies, which have the corresponding license. An investment license in Latvia can be issued by Latvijas Banka. The activities of such companies are regulated by the EU Regulation 2020/1503.

This license will also apply to crowdfunding operations. Therefore, when choosing a company to provide crowdfunding services, make sure that it has the appropriate license and that the company operates legally.

Crowdfunding deal participants

The following types of representatives are involved in this area:

  • project owners (individuals or legal entities seeking financing for their project);
  • investors who are ready to invest their funds in potentially profitable projects;
  • crowdfunding operators, help investors to find projects and vice versa on the relevant platforms.

Crowdfunding operators in Latvia are intermediaries. Their task will be to help find investors with the right sums to implement interesting projects. As a rule, such companies try to work for the future, so that in the future investors and project developers also apply to them.

However, to be able to offer their services in this market, they need to obtain the appropriate license.

How to obtain a crowdfunding license in Latvia

Obtaining investment license in Latvia for crowdfunding is no different from obtaining similar documents for other types of activities. The operator only has to:

  • meet with representatives of Latvijas Banka and present the company (tell the business model of the platform, show the developments, etc.). Based on the obtained data the possibility of granting such a license will be evaluated;
  • if it is approved, the operator must submit the requested documents for consideration;
  • wait for the completion of the evaluation of the application and, if necessary, make adjustments. Applications may be reviewed for up to six months;
  • obtaining a license and instruction regarding further cooperation in this area.

Only those companies which are successfully registered can apply for a meeting with Latvijas Banka. If the company only plans to register, it is best to seek help from investment company registration services in Latvia. With their help, you can overcome the registration procedure faster, because their employees know how to proceed. To register a crowdfunding company you need:

  • the form of ownership must be LLC or JSC;
  • to supply details concerning the originators;
  • To have a banking account in Latvia;
  • the accepted funds have been paid (minimum 50 000 euros);
  • an annual fee has been paid (does not apply to the documents with an indefinite term).

This document obtained will be valid in the whole EU. Accordingly, it will be possible to choose not only Latvian projects. This is another advantage of working in the Latvian market. 

What are crowdfunding platforms

Crowdfunding operators work mainly in the online format. Therefore, they create special sites through which applications can be placed to invest in a project. Such services are also called crowdfunding platforms.

Crowdfunding platforms in Latvia have all operators in the market. On their platforms, they may indicate a guaranteed non-material benefit for investors, who will directly participate in the project.

They also undertake to ensure different nuances. For example, it is a question of financial transactions (there is a corresponding function for processing payments on the platform) or legal registration of the transaction.

In addition, you can promote your ideas on the platform, and after establishing contact between the investor and the project owner, communication is possible within the platform. Due to the presence of crowdfunding platforms, the work on search and cooperation is greatly simplified, because investors and project owners can be physically located in any European country and they do not need to organize a physical meeting.

You could be interested

Innovations in currency exchange in Ukraine

Innovations in cryptocurrency exchange in Ukraine  Thanks to the new law, Ukrainians will receive more than 20 privileges to facilitate banking operations. From February 7 it became possible: move currency values ​​abroad according to a unified system; settle later than the appointed date (earlier failure to comply with the established billing period led to a...

Investment fund in Switzerland

Investment funds abroad may be particularly attractive to those who already have experience investing internationally. By pooling capital, you can achieve more profitable investments and take your business to a new level. The financial sector plays a central role in the Swiss economy. Thanks to its strong economy, political neutrality and banking secrecy, the country...

How to obtain the E-Money License in Asian countries

In the rapidly evolving landscape of economic technology (FinTech), digital currency has gained significant traction as a convenient and efficient alternative to traditional remittance methods. Many enterprises operating in the FinTech sector seek to acquire an E-Money Permission to lawfully provide digital currency services in Asian countries. This article aims to provide a comprehensive guide...

Understanding MiCA: Licensing Requirements and Strategic Considerations for CASPs

MiCA, short for Markets in Crypto-assets Regulation, is the E.U.’s pioneering guide to digital tokens. But don’t be fooled — this is not another document packed with legalese. It’s a game-changer. The European Union is for the first time establishing clear, single rules for crypto across all 27 member countries. An urgent jargon-decoding aside: This isn’t just a business...

How to get a Certificate of Incorporation

Company registration is one of the first and most important steps towards creating a successful business. This process requires attention, preparation and understanding of legal nuances. A company registration certificate is an official document confirming the establishment of a legal entity and its right to operate. In this article, we will discuss what a company...

BVI fund formation

The BVI is the huge global hub for foreign hedge funds and a well-respected choice for creating mutual funds in general. Its adaptability in providing diverse regulatory options for minor entities makes islands an excellent variant for establishing banking managers and advisors. This adaptability contributes to the island’s reputation as a top choice for that...

Related posts

Investment fund in Latvia

Investment funds (IFs) include real estate funds, hedge funds and private equity funds registered and operating in the European Union. They operate in accordance with Directive 2011/61/EU AIFMD and the Law on Investment Funds and Their Managers in Latvia. In Latvia, IFs are monitored by the Financial and Capital Market Commission (FKTK). Latvian investment funds...

Get a Trust License in Latvia

Obtaining such official permission as a trust license Latvia depends on the specific activity that the entrepreneur is engaged in. The issue of licensing trust organizations in Latvia is regulated by the Financial Services Law and the provisions of the EU Directive, which was adopted in the jurisdiction in 2009. As follows from the legislative...

Crypto license in Latvia

By establishing a firm and getting a crypto-license in Latvia, you open doors to offering services for crypto-exchange and storage of cryptoassets within provisions of law basis of the European Union and other countries. Our professional experts have already helped hundreds of clients successfully obtain permits to work with crypto-currencies in Latvia and others; it...

PSP license in Latvia

The Baltic countryside has become a big financial-centers in a short duration. But Latvia allows a gentle policy concerning fees for corporations that want to obtain a PSP license in Latvia. To get a PSP license in Latvia, a corporation needs to spend a lot of time and resources. But the time invested is more...

AEMI License in Latvia

Today’s jurisdiction that 2 years ago regulated the processes of acquiring AEMI license. Entrepreneurs who have decided to operate in this area and want to obtain a license for a payment system in Latvia will now be able to distantly enroll accounts for their clients. A license for digital money in Latvia can be issued...

EMI License in Latvia

In recent years, Latvia has emerged as a promising destination for fintech companies seeking to obtain an Electronic Money Institution (EMI) license. This Baltic gem boasts a stable financial landscape, a well-developed regulatory framework, and a strategic location within the European Union. In this article, we will delve into the issues for obtaining an EMI...
Fill the blank: