Estate planning in Latvia
It’s not generally known (but we’d love to tell you a secret) that the Baltic state of Latvia has very strict rules about banking secrecy. Riga, the capital of Latvia, is an ancient city with a glorious past. Riga is located within a stone’s throw from Helsinki and Saint Petersburg. If you fly over the frozen Baltic Sea in winter and you land at the small airport of Riga and drive to the city centre, you won’t be impressed by the prosperity of this small country. Everything looks a bit shabby. With a population of only 2 million inhabitants, this small country is still fighting for its place on the world map after nearly one century of brutal Russian oppression with a German war interlude. But still, a bright future as ‘the Switzerland of the high North’ might be in store for Latvia. And it has a very strict banking secrecy, which is certainly also attractive to many people.
The Credit Institution Law contains a section stating that it is the duty of a credit institution to guarantee the confidentiality of the identity, accounts, deposits and transactions of clients. The Criminal Law also provides for criminal liability when banking secrecy is breached. Latvia implemented the automatic exchange of information method in accordance with the EU Savings Tax Directive. This means that all Latvian banks report the interest earned by individuals who are residents of other EU countries to the Latvian tax authorities. This information is then passed to the tax authorities of those other EU countries. In other words, legal entities and legal arrangements such as companies, trusts and foundations are able to enjoy the banking secrecy in Latvia. No information about legal entities is passed to the Latvian tax authorities.
One can professionally and discreetly manage one’s financial affairs in Latvia. Everyone speaks perfectly English and the sometimes haughty air of the Swiss can be avoided here. The banks will make you feel at home right away.