Hiring in Latvia

The contract sets out role, salary in EUR, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

The contract must be in Latvian. Bilingual Latvian and English versions are common, and a foreign hire who does not speak Latvian must get the terms in writing in a language they understand.

Fixed-term contracts are only allowed for reasons listed in the Labour Law and are capped at five years, so most EORs default to indefinite terms.

Set probation from day one. It cannot be extended past the cap by individual agreement, although time off sick or other justified absence does not count towards it. Only a collective agreement with a trade union can stretch it to 6 months.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime needs the employee's written consent and may not average more than 8 hours a week over a reference period of up to four months. A collective agreement can reduce the premium to 50% in some cases.

Senior and professional hires are generally covered too, so overtime stays a statutory matter rather than a contractual one. Agree how it is approved and recorded before the first payroll.

Market practice for professional roles sits close to the statutory four weeks, so the legal minimum is a fair starting point when you budget. Check whether the EOR's standard contract adds days.

The first day of sick leave is unpaid, the employer pays days 2 to 10 at 75% to 80% of average earnings, and the state takes over from day 11. Maternity and paternity benefits are paid by the state, so confirm the EOR is not billing you for them.

The employer can only dismiss on a ground listed in the Labour Law, in writing and with the reason stated. Severance is fixed by statute and scales with length of service for no-fault exits such as redundancy, and trade union members generally need the union's prior consent before notice is given.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave and any severance. Employees have one month to challenge a dismissal in court, so keep a documented reason. Many exits are agreed by mutual consent instead.

Private medical cover is the standard extra for professional roles even though it is not mandatory, and employer-paid premiums are tax free up to an annual limit.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer social contributions add 23.59% on top of gross salary, plus a business risk fee of EUR 0.36 per employee per month. That is before the EOR fee.

Registration is the trap. Each new hire must be reported to the State Revenue Service at least an hour before they start work, so a late signature can push back a start date. The legal default is also two pay dates a month, so a monthly cycle has to be agreed in the contract.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the vacancy registration with the State Employment Agency and the salary floor, tied to the average gross wage (about EUR 1,685 a month in 2026, higher for an EU Blue Card), apply to the sponsor, not to you.

EU, EEA and Swiss citizens need no permit. For everyone else, set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers outside the EEA need a lawful basis such as an adequacy decision or standard contractual clauses.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporating an SIA here is relatively quick and the minimum share capital is EUR 2,800, but the running cost is the point: a Latvian legal address, bookkeeping, annual accounts, monthly payroll reporting and, above size thresholds, an audit set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.