Simplified evaluation of contribution in kind and payment of share capital

COBALT informs that as of 16 July 2025, amendments to the Latvian Commercial Law (available in Latvian) will enter into force, introducing a more flexible approach to the evaluation of contribution in kind, as well as simplifying various document submission requirements to the Register of Enterprises (the Register).

Below is a summary of the main changes.

1. The amendments simplify the requirements for engaging an independent expert to evaluate contribution in kind and prepare an opinion at the time of incorporation of the company and share capital increase.

From now on, when incorporating a limited liability company (SIA), the founders themselves will be able to provide an opinion on the contribution in kind without involving an expert, if the amount of contribution does not exceed EUR 25’000 (previously EUR 5’700) and its total value is less than half of the share capital of the SIA.

Meanwhile, when increasing the share capital of an SIA or a Joint Stock Company (AS), the Management Board will be able to provide an opinion in the following cases:

• if the share capital is increased through debt capitalisation, i.e. when a loan to the company is converted into the share capital, with the company becoming both debtor and creditor, and the claim is extinguished by confusion;
• if the share capital is increased by other types of contributions in kind whose total value does not exceed EUR 50’000.

2. Submission of applications on acquiring shares within the share capital increase with the Register – will no longer be required.

3. The amendments set a threshold of EUR 50’000, upon which a bank statement or other document confirming payment of the share capital must be submitted to the Register.

If, upon incorporating an SIA or AS, the amount of cash contributions to the share capital does not exceed EUR 50’000, the founders themselves will be able to certify that a payment account has been opened in the name of the company being incorporated and that the share capital has been paid into it. The same applies to the Management Board in the case of share capital increases: if the total amount of the share capital after the increase does not exceed EUR 50’000, the Management Board itself may certify that the capital has been paid.

As a result, if the threshold is not reached, the founders / Management Board will be able to confirm the payment directly in the Register’s application form, making the process significantly less complex and eliminating the need to obtain supporting documents from the bank.

4. Starting from 1 January 2026, submission of the liquidation closing financial report of a liquidated company to the Register will no longer be required.

Nevertheless, as part of the liquidation process, the liquidator will still have an obligation to prepare a liquidation closing financial report and certify that it, together with the property distribution plan, has not been contested in court.

Please note that, since property valuation standards and the prohibition of providing false information are mandatory in the process of evaluation of contributions in kind, only a comprehensive and properly prepared opinion can help to avoid legal liability for incorrect valuation.

If you have any questions or concerns, please contact our experts: partner Gatis Flinters and senior associate Marija Berdova.