Enter the Baltic market through our Latvian PEO services, which manage payroll, benefits, taxes, and employment contracts for your foreign workforce.

Latvia offers real advantages for business expansion: direct access to EU markets, low operating costs, and a skilled workforce that speaks English, Russian, and Latvian. The country ranks 22nd globally for ease of doing business, with fast online company registration and tax incentives that reduce corporate taxes by up to 80% in special zones. 

The services sector contributes 62% of the $32.5 billion GDP, while a world-class IT industry and a strong bioeconomy generate 40% of national exports. Major investments in renewable energy, strategic EU-CIS logistics positioning, and growing construction and tourism sectors offer diverse opportunities across high-growth industries.

Export CategoryExport Value (USD)
Integrated Wood Products$2.5 billion
Machinery & Electrical Equipment$1.8 billion
Mineral Fuels & Oils$1.2 billion
Pharmaceuticals & Medical Instruments$0.9 billion
Textiles & Apparel$0.7 billion

In 2024, Latvia saw active investment projects reach around €11 billion due to foreign investment. If you’re looking to open a business and hire local talent in Latvia, you’ll need to comply with employment laws, establish payroll systems, and ensure full regulatory adherence. 

Our PEO services manage all the employment administration so you can hire quickly, stay compliant, and focus on growing your business in one of Europe’s most business-friendly markets. Let’s discuss how a PEO can fast-track your workforce expansion in Latvia.

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What is a PEO?

A Professional Employer Organization in Latvia is a specialized company that acts as a co-employer, sharing legal employer responsibilities for your workforce, though you maintain complete control of daily operations. 

The PEO processes payroll, withholds taxes, manages employee benefits, and ensures compliance with local employment laws and regulations. This co-employment arrangement lets you hire employees in Latvia without establishing a local legal entity. 

They provide instant local expertise and eliminate legal risks that could derail your expansion. You retain complete control over your team’s work, performance, and business decisions. The PEO simply removes the administrative barriers that would otherwise slow your market entry.

An alternative option is an Employer of Record (EOR). They become the full legal employer of your workforce and take complete responsibility for Latvia employment outsourcing, rather than sharing these responsibilities with your company. EOR and PEO are often used interchangeably; however, they have distinct legal structures and assume different degrees of liability.

Start hiring with a Latvia PEO

Let us handle the complexities of hiring, compliance, and payroll in Latvia while you focus on growing your team.

  • Hire employees in Latvia with a Latvia  PEO
  • No local entity is needed
  • Pricing starts at USD 199 per employee
  • Remote People can also help you find the best talent in Latvia

👉 Get Your Customized New Latvia PEO Proposal Today!

The Benefits of Using a PEO for International Businesses

Businesses expanding into Latvia often get bogged down by bureaucratic requirements. This involves multiple registrations with the State Revenue Service and the State Social Insurance Agency, as well as work permit applications for non-EU employees, all of which are conducted in Latvian.

Cultural and language barriers add complexity. While Latvians speak Russian and English, all official employment documents must be in Latvian. A PEO in Latvia simplifies hiring as follows:

Reduce Administrative Burden

Reallocate up to 18 hours weekly to your business instead of Latvia HR compliance. PEOs eliminate the time drain of employment paperwork, government registrations, and compliance tracking.

Compliance with Employment Laws

Don’t know about Latvia Labor Law compliance, including Section 61 minimum wage requirements, Section 40 written employment contract mandates, and Cabinet of Ministers regulations governing social insurance contributions? Don’t worry. A PEO does.

Improves Employee Satisfaction

Employees at businesses using a Professional Employer Organization report satisfaction scores that are 4 to 8 percentage points higher than those at non-PEO companies. This stems from better benefits packages and professional PR support.

Why Choose a PEO in Latvia?

Between social security payments, severance calculations, working time regulations, and mandatory leave provisions, there are extensive compliance requirements that go beyond what standard Latvia payroll services cover. A PEO provides access to local expertise on these granular details, allowing you to focus more on other business objectives. 

A Latvia PEO will help you maintain compliance with the following labor laws:

  • Working hours: Standard working hours are eight hours per day and 40 hours per week.
  • Overtime: Latvia’s Labour Law defines overtime as work performed beyond regular working time (8 hours daily, 40 hours weekly). Overtime requires written employee consent, except in exceptional circumstances, such as force majeure or an urgent public need. Overtime cannot exceed an average of 8 hours within a seven-day period, calculated over a four-month accounting period. Employees must receive at least 100% supplement (double pay) for overtime hours, and it’s prohibited for workers under 18.
  • Leave entitlements: Comprehensive leave protections include 20 working days of paid annual leave after six months of service, 12 separate public holidays with double pay for work performed, and structured sick leave, where employers pay 75-80% of the salary for the first ten days before social insurance takes over. New parents receive up to 140 days of paid maternity leave, 10 days of paid paternity leave, and flexible parental leave options ranging from 13-19 months with partial salary compensation. All unused vacation days must be paid upon termination.
  • Minimum wage: The minimum wage is €740 per month for full-time work, based on standard working hours (40 hours per week). The Cabinet of Ministers sets this rate and applies it to all employers under the Labour Law, representing approximately 45-50% of Latvia’s average wage.
  • Social Security: Latvia has a mandatory social security system that requires total contributions of 34.09% of the gross salary (23.59% from the employer and 10.50% from the employee), up to an annual cap of €105,300. The system provides comprehensive coverage for pensions, healthcare, unemployment, maternity, and disability benefits through a three-tier pension structure administered by the State Social Insurance Agency.

Challenges of Setting Up a Business Entity in Latvia

The Labour Law (Darba likums) governs Latvia’s employment and labor laws, setting the framework for employment contracts, working conditions, employee rights, and employer obligations. European Union directives influence these laws, and additional regulations and amendments supplement them as needed.

Meeting these requirements involves registering with the State Revenue Service and the State Social Insurance Agency, establishing payroll systems, ensuring compliance with labor laws, and managing complex employment documentation.

A Latvian PEO simplifies this process by acting as your co-employer and handling all employment administration, allowing you to start hiring immediately.

How a Peo Simplifies Hiring and Compliance

PEOs help businesses identify and attract skilled, vetted candidates in Latvia’s competitive job market. A Latvian PEO streamlines onboarding by ensuring your employment contracts and workplace processes align with local labor requirements. With their expertise in Latvia’s employment regulations, they maintain your compliance and protect your business from potential penalties.

Services Offered by Latvia PEOs

Latvian PEOs provide specialized services to ensure seamless operations from day one. Here’s how they support your business:

Payroll Management

Wages, taxes, and social security contributions are managed by PEOs. They pay employees on time in euros and submit required payments to the State Revenue Service. The PEO also manages tax withholdings and ensures employee data protection in accordance with GDPR compliance standards.

Employee Benefits Administration

Managing employee benefits becomes straightforward with a Latvian PEO. They handle statutory requirements, such as annual leave and sick pay, as well as any optional perks that your company may want to offer its workers, including private health insurance.

Tax Compliance

Part of payroll management is tax compliance. A Latvia co-employment arrangement means the PEO assumes full liability for tax obligations in Latvia. They submit remittances to the State Revenue Service (Valsts ieņēmumu dienests) and ensure all social contributions are correctly calculated and filed on schedule.

Recruitment and Onboarding

While Latvian PEOs don’t typically run recruitment campaigns, they can connect you with trusted local talent networks to find qualified candidates. This makes hiring faster and more cost-effective. 

Once you’ve made your selections, the PEO takes care of onboarding by registering new hires for benefits and preparing employment documentation. Many also provide orientation support and training resources to help new employees settle into your company culture.

Employment Contracts and Terminations

Employment contracts and termination contracts in Latvia must include job descriptions, employee and employer details, and compensation in euros. Your PEO prepares these documents in Latvian, with translations provided for foreign employees who need them.

During contract termination, the PEO protects employee rights and manages proper notice periods. Notice requirements vary based on the reason for termination, ranging from no notice for gross misconduct to up to one month for standard dismissals.

Advantages of Using a PEO in Latvia

A PEO provides many benefits, from saving on administrative expenses to protecting your business against the risks of non-compliance. The advantages of using a Latvia PEO are described below:

  • Cost savings: Studies show businesses save an average of $1,775 to $2,000 per employee annually by partnering with a PEO, making it a cost-effective solution for managing your workforce in Latvia.
  • Speed to Market: Companies that use PEOs grow 7-10% faster than their competitors. They hire talent quicker, stay compliant effortlessly, and launch new projects at speed, giving you a serious edge in Latvia’s competitive business landscape.
  • Risk mitigation: PEOs continuously monitor Latvia’s evolving employment regulations and automatically update your compliance procedures. They identify potential legal risks before they become costly problems.
  • Focus on Core Business Activities: By partnering with a PEO, businesses offload time-consuming HR and administrative duties, unlocking the freedom to innovate, grow, and focus laser-sharp on what truly drives their success.

How RemotePeople.com Facilitates PEO Services in Latvia

RemotePeople.com connects you with Latvia’s best PEO partners. We’ve done the heavy lifting – vetting providers, negotiating rates, and mapping out the fastest route to compliance. No more endless research or guesswork about which PEO actually delivers. 

Our team knows Latvia’s market inside and out, from Riga’s startup scene to the country’s manufacturing hubs. We match you with the right partner for your industry and get you hiring within days.

Steps to Engage a PEO in Latvia

Initial Consultation

When meeting with a Latvian PEO, discuss their service offerings and pricing model. Ask about their sector expertise and HR technology platform for managing compliance. Clarify your specific requirements, like payroll processing and HR support. Confirm their deep knowledge of Latvia’s employment regulations and local market nuances.

Service Agreement

The service agreement must clearly outline each party’s responsibilities and associated costs for the requested services. This includes payroll, HR support, and administration of employee benefits. All related costs must be detailed in the agreement. This helps avoid clauses concerning fee adjustments or hidden fees.

Onboarding Process

The Latvian PEO will register employees on its platform. This includes creating accounts where employees enter banking details and upload compliance documentation. The process allows the PEO to efficiently manage payroll, HR, benefits, and tax requirements.

Partner With a PEO in Latvia To Expand Your Business Successfully

Latvia is a prime destination for businesses expanding into the EU, offering low operating costs, multilingual talent, and fast-track company registration. Still, navigating labor regulations and compliance requirements can be complex without local expertise. A PEO helps simplify market entry while keeping you fully compliant.

Looking for a trusted PEO provider in Latvia? Remote People connects businesses with reliable PEO services that manage HR, payroll, tax compliance, and employee benefits. Contact us today to start hiring in Latvia without setting up a local entity!