With Latvia’s accession to the euro-zone, a law was enacted to required companies to restate their share capital and the nominal value of shares in euros (€). The deadline for registering these restated values with Latvia’s enterprise registry is 30 June 2016.
The revaluation in euros is primarily the responsibility of the management board. A key requirement is that under the revaluation measures, the existing proportion of the shareholdings among the shareholders of the company must be retained, and that the amount of share capital must remain the same to the extent possible (a permitted change is allow if below 1.6%).
Under the revaluation, the nominal value of a share may be rounded down; however, it is possible to set a different nominal value for a share if to comply with the proportionality rule. The residual value of shares that cannot be translated into new shares must be disbursed to the shareholders in proportion to their shareholdings or, if not possible, transferred to reserves.
With the approaching 30 June 2016 deadline, companies that have not yet made these euro-revaluation changes need to consider steps now to start recalculating their share capital and to draft the required documents.
Read a May 2016 report [PDF 120 KB] prepared by the KPMG member firm in Latvia
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