Last year saw the lowest number of companies since 2004

8,826 new companies were registered in Latvia last year, which is the lowest figure since 2004, according to “lursoft“information collected.

“Lursoft” has already announced that with the Covid-19 pandemic, the activity of registering new companies in Latvia has decreased, as a result of which there were 14.4% fewer new companies in 2020 compared to the previous year . Last year, the number of newly registered companies increased cautiously again, while the year 2022 brought another decline in momentum. A Lursoft study reveals that 401 fewer new companies were registered in 2022 than in the previous year.

At the same time, the number of liquidated companies has also decreased, according to data compiled by Lursoft. If 14,157 companies were liquidated in 2021, last year there were 10,959, or 22.6% less. Numerically, the largest number of companies liquidated in 2022 was in Riga (5,710), Ogre county (280) and in Daugavpils (275). Last year, there were both liquidated companies and newly registered companies in all municipalities of Latvia.

Analyzing data by month, data from “Lursoft” reveals that the lowest number of new companies in 2022 was registered in April (650) and December (682), while the highest number was registered in September (803). It should be noted that this is also the only month of 2022 where more than 800 new companies were registered within the month. For comparison, it should be noted that more than 1,000 new companies were also registered in March 2021, which is 259 more companies than last year in the corresponding period.

“Lursoft” has already announced during the previous year that the total capital of new companies tends to decrease. Presumably, this can be seen when collecting data for the entire year 2022. If the total share capital of newly registered companies in 2021 was EUR 243.49 million, then last year – only 63.92 million. EUR. It should be noted that the largest company registered in 2021, SIA “JT Offices”, had a share capital of 130.24 million. EUR, while the largest company last year – 5 million. EUR.

Almost half (48.5%) of all new companies in 2022 were registered in Riga, however, the largest share capital last year belonged to two companies outside the capital. The largest company registered in 2022 with 5 million SIA “RR Baltic Holding” of South Kurzeme district has registered capital in EUR. Just a few days after the registration, SIA “RR Baltic Holding” became the new owner of SIA “Otaņķu dzirnavnieks” and SIA “Otanki Farming”, whose major shareholder was Ričards Riepšs, the only member of SIA “RR Baltic Holding” until so.

In the presented annual report, grain processing company SIA “Otaņķu dzirnavnieks” said that its biggest challenge last year was planning development and operations at least a year or even two in advance. Despite the fact that the production of agricultural products was significantly lower than the average of other years, SIA “Otaņķu dzirnavnieks” even managed to increase the transportation of agricultural products, since the main emphasis was on increasing the volume and not on the profit indicators, because it was important for the company to get the maximum market share. The annual report available from Lursoft shows that the turnover of SIA “Otaņķu dzirnavnieks” in 2021, compared to the previous year, increased by 16.37% to reach 19.67 million. EUR. The grain processor closed last year with 581.8 thousand. Profit in EUR after tax.

The second largest company registered in 2022 is AS “Puto” in Ropažu District, whose registered capital is 4.49 million. EUR. Currently the company has already registered 20 active structural units, including 18 car washes throughout the territory of Latvia. Available information from Lursoft reveals that less than a month and a half after registering in May last year, AS “Puto” registered 120,000. Commercial commitment worth EUR.

1 million A total of 15 companies with capital of EUR or more were registered last year, two of which are public limited companies – the aforementioned JSC “Puto”, as well as JSC “IDX1R”, which ranks 6th among the largest companies registered in 2022 in terms of amount of share capital.

“Lursoft” data shows that the only board member of AS “IDX1R” is “Indexo” co-founder and chairman of the board Valdis Siksnis, while Vladimirs Bolbats, Henriks Karmo and Tīna Kukka hold positions on the board. At the end of last year, the investment management company “Indexo” established a subsidiary AS “IDX1R”, which will later become the bank “Indexo”, according to a statement to the exchange. Information provided by the company shows that “Indexo” has already applied to the Financial and Capital Market Commission for a banking license. It should be noted that more than 10 years have passed since the last time a new license was issued to a credit institution in Latvia.

Of all limited liability companies registered last year, more than half (62.7%) have small capital, meaning that the share capital is less than €2,800. Lursoft has investigated that among them there are also four companies whose share capital does not even reach 1 euro. The smallest, i.e. just 1 cent, is for SIA “MS Markets” registered in the Saldus district, which has stated that its main business is related to online retailing. SIA “GubGub”, whose share capital is 2 cents, is also active in the retail sector, while SIA “Akmensaule” (share capital is 50 cents) registered its business in the field of electricity generation, and SIA “Betas konusnīca” (capital capital of 10 cents) operates in the confectionery sector.

More than a third of all small capital SIAs registered last year have a share capital of up to 1 euro. At the same time, it should be noted that out of all 426 small capital AIS cases registered in 2022, the share capital has already been increased over the last year. In general, 541 limited liability companies had the registered capital increase in the registration year, of which the registered capital amount for newly registered companies was greatly increased in several cases. For example, SIA “SG Capital Meža Fonds” was registered in April last year with 3 thousand euro share capital. A month later, it was increased to 6.3 million. Euros, up to 7.65 million in July. EUR, but two weeks later – up to 16.35 million. EUR. The sole shareholder of the aforementioned company is the limited partnership “SG Capital Partners Sustainable Forest and Land Fund I”.

Similarly, the share capital of SIA “NĪ Holdings”, registered in March, also increased last year, according to information collected by Lursoft. The initial capital of the new company registered in real estate was 2.8 thousand. euros, in June it was raised to 8 million. EUR, but already next month – up to 13 million. EUR.

At the same time, it should be noted that not all new companies had a successful first year last year. A research by “Lursoft” reveals that 51 of the companies registered in 2022 have already been liquidated, while two have been reorganised. One of them is SIA “Livonia Glass”, registered at the end of January 2022. Less than a month after registration, the company’s share capital was increased by 2.8 thousand. EUR up to EUR 2.35 million, while at the end of August it was decided to reorganize SIA “Livonia Glass” by merger, incorporating the company into SIA “Transparence”.

In 2021, the main market of SIA “Transparence”, manufacturer of glass processing and facades, window glass packages, was Latvia, which accounted for more than half of its total revenues. Last year, the company had revenues of less than 5 million. EUR.