Employer of Record in Latvia & PEO | Hire Without An Entity

Employer of Record in Latvia & PEO

Hire Globally, Pay Locally, Expand Effortlessly

Expanding to new markets doesn’t have to be a lengthy and complicated process. With a professional and reliable partner like INS Global you can enter Latvia quickly and confidently. INS Global has been helping companies reach their expansion goals for the past 15 years. Our staff are uniquely equipped to meet any challenges you might face and offer personalized solutions for every need.

Partnering with an Employer of Record (EOR) in Latvia allows you to easily hire and onboard local talent. An EOR takes care of recruitment, contract management, and more so that you can focus on reaching your market goals.

A Professional Employer Organization (PEO) is similar to an EOR. With a PEO you can bring over existing staff and set up smoothly in a new market without the risk of costly legal errors.

Employer of Record in Latvia & PEO - Summary

Employer of Record in Latvia & PEO

Five Reasons to Partner with a Global PEO

Receive Legal Advice from Experienced Experts

Understanding a foreign legal system is not easy, and any misunderstanding can lead to paying expensive fees and fines. A PEO will not only keep you legally secure, but will also make sure you implement any necessary changes as new laws or bills are passed.

Reduce Unnecessary Spending

Rather than having to train your staff to handle complex HR tasks, a PEO covers all administrative responsibilities with speed and professionalism.

More Time to Focus on Company Goals

Having a PEO handle payroll, taxes, and contract management gives you more time to explore the new market and make valuable business connections to further your expansion goals.

Set Up Faster, Succeed Easier

With traditional company incorporation you might have to wait a whole year before you can start operations. A PEO can have you set up in just a few days.

Everything You Need at One Point of Contact

Instead of having to outsource to multiple services, you can have all your needs met on a single platform.

Why Expand with a PEO Instead of Company Incorporation?

While company incorporation is a more traditional method of global expansion, it’s time-consuming and can have a much higher risk of non-compliance errors. A PEO acts as the legal entity through which you can expand to new markets. This cuts down the wait time and reduces the amount of paperwork you have to go through.

Other benefits of a PEO include: 

  • Faster market entry
  • Less time and money spent on expansion
  • Having a team of experts on hand at all times
  • Connections to local talent pools and resources
Employer of record Latvia
testimonial from Manuel Ramos

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately. 

5/5

How Does A PEO In Latvia Work?

INS Global uses a tried-and-proven four step plan to help realize your expansion dreams:

  1. We discuss your situation and formulate a custom-made plan
  2. Our PEO in Latvia is the legal entity through which you can bring staff over and start setting up.
  3. We handle essential tasks like payroll, taxes, and HR services.
  4. Your staff can continue day-to-day operations while we ensure that you are legally secure in every way.

The Difference Between A PEO and EOR

Although there are many similarities between the two services, a PEO and EOR are not identical. When you understand how they differ you can make an informed choice about which one to partner with.

  • A PEO and EOR both function as organizations that offer services for employees of other companies. Some of these services include contract management, onboarding, payroll, and HR tasks.
  • One difference is that an EOR becomes the official employer of any employees it hires on behalf of the client. This also makes the EOR liable for any issues with the employees.
  • The contracts in a PEO or EOR relationship are also not the same. In a PEO, the contract is made between the company and the employer. In an EOR, the contract is directed by the company but officially made between the EOR and the employer.

Labor Law in Latvia in 2024

Employment Contracts

  • Written employment contracts are required in Latvia and must state all details of employment including compensation amount.
  • Fixed-term contracts cannot last longer than 2 years.
  • Probation periods are typically 3 months. During this time either party may terminate the contract with a 3-day notice.
  • Termination notice periods are 10-30 days, depending on the circumstances.
  • Severance pay is calculated by seniority and is as follows:
  • 1 month’s wages for those with less than 5 years of service
  • 2 months’ wages for those with 5-10 years of service
  • 3 months’ wages for those with 10-20 years
  • 4 months’ wages for those with more than 20 years of service

Working Hours

  • A standard work week in Latvia is 40 hours, 8 hours 5 days a week.
  • Overtime must be agreed upon by both parties in writing and cannot exceed 144 hours over 4 months’ time.
  • Overtime must be compensated for at 200% of regular wages.
  • The current minimum wage is 620 euros a month.

Holidays

  • In 2023 there are 12 public holidays in Latvia.
  • Employees who work during public holidays must be compensated with either 200% of their regular wages or with additional days off.

Annual and Sick leave

  • Paid annual leave is four weeks. Employees may request use of their annual leave after working for six consecutive months.
  • Sick leave is calculated as follows:
  • The employer pays for days 2-10.
  • The state covers from the 11th day to a maximum of 26 weeks.
  • From day 2-3 of sick leave the employee receives 75% of their regular wages.
  • From day 4-10 the employee receives 80% of their wages.
  • From day 11 the state compensates the employee with 80% of their wages.

Maternity/Paternity Leave

  • Maternity leave is 112 days in total and can be split as 56 days before birth and 56 days after.
  • Those who must receive extra care due to pregnancy complications receive a maximum of 140 days of maternity leave.
  • Paid paternity leave is 10 days.
  • Parental leave is 13-19 months, 2 months of which can be taken until the child is 8 years old.
  • Parental leave is compensated at 75% to 60% of the parent’s salary, depending on the situation.

Tax Law in Latvia

  • Corporate tax is 20%.
  • VAT is 21%, with a reduced rate of 12% for certain goods.
  • Income tax is charged at a progressive rate from 20-31%.
  • Social security contributions are 10.9% for employees and59% for employers.
  • Self-employed individuals pay 31.07% for social security contributions.
  • Latvia has DTTs (Double Taxation Treaties) with over 60 countries worldwide.
Employer of Record in Latvia & PEO

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FAQs

In Latvia, the price of specialized EOR services is calculated as a percentage of a coworker’s monthly income. This price includes all HR tasks required to ensure compliance with all local employment rules.  

Without the need for a new firm structure, handling employer duties through an EOR is secure, legitimate, and efficient in Latvia. EOR services achieve this by having top-notch HR support and in-depth familiarity with local legal authorities. 

With an EOR service agreement, your team members will be completely protected by the law, receive correct and timely monthly payments, and be eligible for all Latvian employee benefits.  

While working with clients through a Latvian EOR, independent contractors have complete control over their work and may be eligible for many or all of the same benefits as regular employees or as if they were utilizing an umbrella firm. 

Our recruiting professionals can find the best local employees in Latvia for your needs by utilizing their vast professional networks, in-depth knowledge of the local business resources and standards, and strict adherence to ethical hiring processes.  

As a result, integrating them into our Latvian EOR system will be easier and more effective than hiring these candidates through more conventional employment methods. 

You obtain thorough compliance-assured employment outsourcing assistance from a genuinely global EOR services provider through INS Global. An EOR complies with all relevant municipal, national, and regional laws.  

There may be strict hiring requirements or a limit on the number of employees you can hire at once at some Latvian PEO or EOR service providers. However, your global business plan may require you to scale up or down quickly. 

INS Global is aware of this, so when you work with us, you can employ as few or as many individuals as you need to in order to accomplish your goals. 

Payroll costs, hiring costs, signing bonuses, and other direct and indirect expenditures like incentive programs, managing the taxes of international workers, and social insurance should all be considered as parts of the total labor cost in Latvia. 

Using Latvian PEO services won’t need a local site, which could help you avoid onerous incorporation regulations.  

It’s still a good idea to give your staff the option of working in a shared workspace or the freedom to do so whenever and wherever it’s most convenient. INS Global can help set up suitable working environments in Latvia. 

If Latvian citizens or foreigners are subject to various local employment standards, tax legislation, or employee incentives, we can deal with all the important distinctions, like visa and work permit requirements.  

The best EOR and PEO solutions are accessible to businesses of all sizes, from SMEs to multinational corporations. Employment outsourcing solutions enable the efficient and secure hiring of international or local staff.  

Our services can even replace more complex internal HR requirements and are easy to scale up to meet the demand for new hires.  

The legal expertise provided by PEO and EOR services would be beneficial to businesses in a number of industries that either don’t have their own structures in a target country (or seek to avoid cost-scaling difficulties while focusing on expansion).  

Staffing firms and umbrella corporations are two more third parties that may be used to directly or indirectly employ independent contractors.  

In Latvia, most independent contractors are self-employed or run their own small businesses. According to Latvian law, hiring contractors requires using labor agreements rather than employment contracts. 

An independent contractor might have to produce a CV, portfolio, verifiable references, and a signed NDA before work begins. 

Payroll in Latvia is typically organized every month, with different rules for residents and non-residents. Employers are generally responsible for managing tax and social security contributions on behalf of their employees. 

The monthly minimum wage in Latvia was raised to €620 per month for 2023.  

As a country within the Schengen area, Latvian visas follow typical Schengen patterns. EU and EEA citizens can live and work in Latvia without requiring a visa, but for everyone else, there are C (short stay, 90 days) and D visa (90 days to 1 year) types alongside the EU Blue Card (for highly qualified specialist works, valid for up to 4 years) 

In Latvia, employers must contribute an amount equivalent to a percentage of an employees salary to their social security fund every pay period. This percentage depends on the companys registration status but typically varies between 20-23%.  

Employees in Latvia are eligible for all the usual employee benefits provided by Latvian Labor Law, including paid leave, overtime, workplace safety protection, pension, unemployment, and health insurance. 

All amendments to an employment contract in Latvia must be made by mutual consent, with adequate notice given in advance.  

Latvian citizens are eligible for free healthcare through a public system funded by social security contributions. 

Expat workers may be required to pay an additional fee to access the public healthcare system.  

Notice periods for employees in Latvia must be a minimum of 1 month unless otherwise specified in the employee’s contract or CBA.  

Employees who are terminated due to redundancy or economic reasons may be eligible for severance pay equalling 1-4 months of salary (dependent on seniority). 

The Latvian Labor Inspectorate oversees the implementation of occupational safety and workers’ rights in the country.  

There are typically 15 days of paid public holidays per year in Latvia, with employees expected to work on a public holiday eligible for double pay or time off on another day.  

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