How to Pay Dividends Quarterly in Latvia?

Thu, 09 Jul 2026 15:39:00 +0000

Updated July 9th, 2026

For many entrepreneurs, one practical advantage of a Latvian LLC (SIA) is that dividends do not always have to wait until the annual report is approved. If the company’s Articles of Association allow it and the legal conditions are met, a Latvian company can distribute profit earned during the current financial year as “extraordinary dividends” even every three months.

This can be attractive because Latvia generally taxes retained profit only when it is distributed. Under the standard regime, dividends are taxed at company level under Latvia’s 20/80 Corporate Income Tax (CIT) formula, commonly described as 20% CIT on the gross distributed amount to the company’s shareholders (€10'000 net profit = €2'000 CIT and €8'000 dividends). This article explains the procedure for paying extraordinary dividends from a Latvian SIA.

Conditions for Paying Extraordinary Dividends in Latvia

Under Section 161¹ of the Commercial Law of the Republic of Latvia, the company’s Articles of Association must expressly allow extraordinary dividends and set the condition or deadline for the management board to call a shareholders’ meeting. If this wording is not already included, the Articles must be amended and the amendments registered with the Register of Enterprises of the Republic of Latvia. If you are registering a new Latvian company, it is usually best to include the extraordinary dividend procedure from day one.
The management board must prepare an interim economic activity report for the period for which extraordinary dividends are being calculated, and the report must show profit.
Extraordinary dividends cannot be determined, calculated or paid if the company’s equity is below its share capital or would fall below the share capital as a result of the payout.
On the day of the shareholders’ decision, the company must have no tax debts, no deferred or instalment tax payments, and no reduced tax advance payments.
Extraordinary dividends may not exceed 85% of the net profit earned during the relevant period.
The decision may be adopted no earlier than three months after the previous dividend decision and no later than three months after the end of the period covered by the interim report.
The payout must not create a risk that the company will be unable to meet its obligations during the remaining months of the financial year.
Extraordinary dividends may only be paid by a standard SIA. A reduced share capital SIA must first increase and its share capital to at least €2'800 before extraordinary dividends can be distributed.

Procedure for Paying Dividends Quarterly in Latvia

Check or amend the Articles of Association. The Articles must state that dividends may also be determined from profit earned after the end of the previous financial year, and should set the condition or deadline for the board to call a shareholders’ meeting for deciding on extraordinary dividends.
Prepare the interim financial documents. The accountants and management board prepares the economic activity report for the relevant period, for example, three months, and a proposal for the part of profit to be paid out as extraordinary dividends.
Check the legal restrictions before the decision. Confirm the profit, equity, share capital, tax debt and timing conditions before moving forward.
Notify the shareholders and provide the documents. The shareholders should receive the invitation or written decision materials together with access to the interim report and the board’s proposal. In a single-shareholder SIA, this is usually handled as a written shareholder decision.
Adopt the shareholders’ decision. The meeting minutes or written decision should record that the board presented the economic activity report, proposed the amount of profit to be distributed, confirmed that the financial situation has not materially worsened, confirmed that the payout does not endanger the company’s ability to meet its obligations, and determined the amount of extraordinary dividends.
Pay the dividends and file the tax declaration. After the decision is adopted, the company can pay the dividends and the accountant should declare and pay the applicable CIT according to the dividend tax rules.

For a small, well-organized Latvian company, extraordinary dividends are usually a straightforward procedure. The key is to prepare the Articles of Association correctly, keep accounting records up to date, and document the decision properly.

Need help registering a company in Latvia or adding the extraordinary dividend procedure to an existing SIA? Get in touch and we’ll help you prepare the documents.

About the author

Hi! I’m Dāvis Suneps. I have helped entrepreneurs register more than 650 companies (and counting!) in Latvia and have consulted on many changes, purchases, and sales of existing Latvian companies. Previously I was the Managing Director of TechHub Riga – the center of the technology startup community in Latvia. If you want a practical, direct, and painless way to register a company in Latvia, message me directly on WhatsApp or send an e-mail now! 👈

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How to Pay Dividends Quarterly in Latvia?

Conditions for Paying Extraordinary Dividends in Latvia

Procedure for Paying Dividends Quarterly in Latvia

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