Offshore Banking in Latvia

25 April 2016

Offshore banking in a very broad sense means providing banking products and services to non-residents of a country. However, offshore banking also usually assumes at least high level of banking secrecy and simple KYC (know-your-customer) procedures.

According to the statistics Latvia is a small but an important offshore banking center in the European Union: out of 21 banks operating in Latvia, 13 provide products and services to non-residents; amount of deposits attracted from non-resident customers is even slightly bigger them those from Latvian residents.

Although Latvia committed to start Automatic Information Exchange (AIE) in September 2017 and also committed to participate in FATCA exchange for 2017 and the subsequent years, Latvia remains an attractive offshore banking destination for several reasons:

Overview of Latvian Banking Sector

By the end of 2015, there were 26 banks operating in Latvia: 12 domestic banks and 14 foreign-controlled banks (4 branches and 10 subsidiaries). Most of the foreign-controlled banks are originated from Scandinavian countries (Denmark, Finland, Norway and Sweden); most of the domestic banks are privately owned. The majority of Latvian banks operate as universal banks, however there are also specialized banks, focused solely on wealth management or corporate banking.

Share of Offshore Banking Products

During the recent years (2010-2015), Latvian banks have been attracting deposits from both Latvain residents and non-residents, with the share of non-resident deposits slightly growing. Deposits of private non-financial non-resident companies accounted for about 75% of all the non-resident deposits. About one-third of non-resident deposits are coming from other countries of the European Economic Area (EEA), one-sixth - from the countries of the Commonwealth of Independent States (CIS) and one-half from the rest of the world.

Deposits of Residents and non-Residents in Latvian BanksStructure of non-Resident Deposits in Latvian BanksStructure of non-Resident Deposits by Country in Latvian Banks

During 2010-2015 domestic loans have been dominating in the loan portfolio of Latvian banks: the share of loans to non-residents comprises about 15% of total loans, with about 70% of loans granted to non-resident non-financial companies.

Loans to Residents and non-Residents in Latvian BanksStructure of Loans to non-Residents in Latvian Banks

Offshore Banking Services

Most of the banks in Latvia offering offshore banking products and services are domestic banks rather than foreign-controlled. Services offered to non-residents include retail, private and corporate banking as well as online trading and brokerage. The services are offered to private individiual, families and companies. Usually it's possible to sumbit an online application for account opening. Several banks also offer their assistance in obtaining Latvian investor residence permits.

NameCountry of OriginServicesNon-Resident ClientsResidence AssistanceWebsite LanguagesOnline Application
 ABLV Bank, AS Latviaretail banking
private banking
natural persons
companies
yesLatvian
English
Russian
yes
 AS "Baltic International Bank" Latviaprivate bankingnatural persons
families
noLatvian
English
Russian
no
 AS "Citadele banka" Latviaretail banking
private banking
corporate banking
natural persons
companies
noLatvian
Russian
yes
 AS "Reģionālā investīciju banka" Latviaretail bankingnatural personsnoLatvian
English
Russian
no
 AS "Rietumu Banka" Latviaretail banking
corporate banking
online brokerage
natural persons
companies
noLatvian
Chinese
English
French
Russian
yes
 AS "Meridian Trade Bank" Latviaretail banking
corporate banking
natural persons
companies
yesLatvian
English
Russian
yes
 AS "NORVIK BANKA" Latviaretail banking
corporate banking
trade & investment
natural persons
companies
yesLatvian
English
Russian
yes
 AS "PrivatBank" Ukraineretail bankingnatural personsnoLatvian
English
Russian
no
 AS BlueOrange Bank Latviaretail banking
corporate banking
natural persons
companies
noLatvian
English
Russian
yes
 AS Expobank Latviaretail banking
corporate banking
online brokerage
natural persons
companies
noLatvian
English
Russian
no
 Rigensis Bank AS Latviaretail banking
private banking
natural personsnoLatvian
English
Russian
yes
 Signet Bank AS Latviaprivate banking
corporate banking
natural persons
companies
noLatvian
English
Russian
yes
 Swedbank AS Swedenretail banking
corporate banking
natural persons
companies
noLatvian
English
Russian
yes
 

Recent Developments

On March 03, 2013 Financial and Capital Market Commission (FCMC) of Latvia withdrew the authorisation of AS “TRASTA KOMERCBANKA” in view of the fact that the bank had been committing serious and sustained breaches of regulatory requirements in several areas for a long period.

On March 10, 2016 FCMC applied fines to AS "Baltic International Bank" (1,100,000 EUR) and its board chair (25,000 EUR) for repeated violations of the provisions of the Law on the Prevention of Laundering the Proceeds from Criminal Activity (Money Laundering) and of Terrorist Financing (AML/CTF) and Regulations on Customer Due Diligence.

See Also

External Links

  1. Latvijas Banka
  2. Financial and Capital Market Commission