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Latvia PEO & Employer of Record

Expand your organization into Latvia with or without a Latvian entity

Latvia’s growing economy, membership of the European Union, and convenient location in Europe all contribute to it being an excellent place to do business. The country was recently ranked 14th in the world for ease of doing business by the World Bank Group, reflecting the potential for foreign businesses looking to expand.

But while Latvia is open to foreign businesses, expansion is not always straightforward. The country’s language and cultural differences can present challenges for organizations starting out, and its complex set of regulation, combined with those of the EU, can lead to delays.

At Horizons, we work to help businesses from any and all industries expand into Latvia. Our professional employer organization (PEO), employer of record, and payroll services can offer you everything you need to start your Latvian expansion rapidly, efficiently, and compliantly.

As the only global PEO with an in-house recruitment team, we can also take care of the sourcing, hiring, and onboarding of your Latvian workforce, along with any ongoing HR and compliance work. Our bespoke services can save you thousands in expansion costs and provide you with a faster route into Latvia.

How can Horizons help you expand into Latvia?

Horizons enables your business to expand its operations into Latvia, without needing to set up a legal subsidiary.

Rapid Market Entry

Horizons will enable you to source, hire, and onboard professionals across Latvia in as little as 48 hours.

Cost-Effective Expansion

Our PEO solution can help you benefit from cost savings of up to 85%, without the need to establish a Latvian entity.

Payroll Outsourcing

Simplified Latvia salary & payroll processing, including social security payments, tax, and any other required contributions.

Employee Onboarding

Utilize the relevant provision for all types of Latvian labor contracts, whether a fixed-term or open-ended contract.

Onsite Legal & HR Team

Full support for Latvia-specific contract renewals, terminations, annual leave management, HR, and strategic guidance.

Ensure Full Compliance

We ensure that employment contracts are fully compliant and adhere to Latvia’s labor laws and best practices.

Hiring in Latvia: Employment law overview

📝 Employment contracts in Latvia

Employers in Latvia are legally required to provide all employees with formal contracts of employment. All contracts need to include any relevant details of the agreement, such as compensation, entitlement and benefits, and so on, and should be written in Latvian with all references to money in the Euro currency.

Most employment agreements are indefinite-term, with fixed-term contracts only possible in specific situations.

⏰ Working hours in Latvia

The standard working week in Latvia is 40 hours, composed of five eight-hour days.

📅 Public holidays in Latvia

Several public holidays are celebrated annually in Latvia. Most workers are given the day off on the following days:

1 Jan
New Year’s Day
14 Feb
Valentine’s Day
20 Mar
March Equinox
29 Mar
Daylight Saving Time starts
10 Apr
Good Friday
11 Apr
Holy Saturday
12 Apr
Easter Sunday
13 Apr
Easter Monday
1 May
Labour Day/May Day, Constituent Assembly Convocation Day
4 May
Independence Restoration Day
10 May
Mothers’ Day
31 May
13 Jun
Special Working Day
21 Jun
June Solstice
22 Jun
Midsummer Day Holiday
23 Jun
Midsummer Eve
24 Jun
Midsummer Day
12 Jul-13 Jul
Youth Song and Dance Festival Holiday
13 Sep
Fathers’ Day
22 Sep
September Equinox
25 Oct
Daylight Saving Time ends
31 Oct
18 Nov
Republic of Latvia Proclamation Day
21 Dec
December Solstice
24 Dec
Christmas Eve
25 Dec
Christmas Day
26 Dec
Second Day of Christmas
31 Dec
New Year’s Eve

🏖 Vacation leave in Latvia

Workers in Latvia are entitled to four weeks (20 days) of paid vacation leave at a minimum. Some employers choose to offer more.

😷 Sick leave in Latvia

Employers in Latvia usually provide ten days of paid sick leave to employees, with the second and third days compensated at 75% of normal pay and the remaining days compensated at 80%. Absences beyond ten days are covered by the government.

👶 Parental leave in Latvia

Female workers in Latvia are entitled to paid maternity leave of 56 days before giving birth and 56 days after (totaling 122 days). The government pays for this leave, so employers are not responsible. Male employees can take ten days of paternal leave before the child is two months old.

Additional parental leave of up to 18 months may also be taken before the child turns eight.

💰 Terminations and severance in Latvia

Unless in a probation period, employees in Latvia are generally entitled to at least ten days of notice of termination and may receive up to one month.

Employees are also usually entitled to severance pay upon termination, with the amount varying depending on length of service. Usually:

  • Up to five years with an employer = One month of salary
  • Between five and ten years with an employer = Two months of salary
  • Between ten and 20 years with an employer = Three months of salary
  • More than 20 years with an employer = Four months of salary

🏦 Taxation in Latvia

Employers in Latvia generally need to withhold the income tax of employees. The income tax rate in Latvia is between 20% to 31.4% depending on income level.

Employers and employees are required to contribute to Latvia’s social security scheme, paying 23.59% and 10.5% of salaries respectively.

🏥 Health coverage in Latvia

Latvia has nationalized healthcare, so employers do not need to provide private medical insurance to workers. However, some companies do choose to offer it as an employment benefit.

💳 Latvia compensations & benefits

Compensation laws in Latvia

The minimum wage in Latvia in 2020 is €430 per month for full-time workers.

Benefit management in Latvia

Building a benefits system for your Latvian workforce can be difficult and complicated to navigate if you are not familiar with the country, its customs, and its employment laws. To set it up independently, it can take several weeks and potentially lead to unexpected delays.

Horizons can simplify your Latvia benefits management. Our Latvia experts can handle everything for you, helping you focus on a successful expansion operation.

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