- Latvian companies can now register limited liability companies using cryptocurrency for share capital.
- The new law removes the need for an external valuation of crypto assets as non-monetary contributions.
- Sats Inc is the first company to use this option, specializing in Bitcoin infrastructure and consulting services.
- Latvian officials believe the measure will attract investment and boost the country’s Web3 industry.
- New rules require crypto assets for company capital to be stored with registered providers to reduce risks.
Businesses in Latvia are now able to form limited liability companies by contributing share capital in cryptocurrency, following changes made this year to the national commercial law. This update eliminates the previous requirement to use an appraiser for non-monetary assets and applies to all local companies wishing to use crypto assets as part of their initial capital.
The first business to make use of this rule is Sats Inc, a firm providing Bitcoin-related infrastructure and consulting services. Jānis Sprenne, a board member at Sats Inc, said, “I strongly support and appreciate our country’s ability to lead the way in an innovative industry. It is only natural that we take advantage of the latest legislation to promote a fast-growing industry supported by state institutions.” Minister for Economics Viktors Valainis stated, “Attracting new investments and creating new jobs is a key priority. If we are forward-thinking and act quickly, Latvia has a great opportunity to rapidly develop in industries that are still emerging.”
According to the Latvian Blockchain Development Association, the new regulation marks a significant point for local innovation and entrepreneurship. Last year, the Latvian Parliament approved legal amendments that allow companies to use crypto assets to pay share capital from 2024, aligning with preparations for the EU’s Markets in Crypto-Assets (MiCA) regulation. In the past, Latvia had already made it easier to use securities for non-cash capital payments.
To reduce risks like money laundering and ensure transparency (such as identifying who really owns the company), the law sets clear guidelines. Crypto assets used for company capital cannot be stored in private digital wallets. Instead, they must be deposited into an account registered on a distributed ledger or managed by a crypto service provider listed under MiCA regulations. These requirements apply to all firms planning to use cryptocurrencies for their share capital.
Officials express optimism that these measures will support growth in Latvia’s crypto and Web3 sectors. Further steps are expected to reinforce compliance and security as the country shifts toward emerging financial technologies.
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