In Latvia, a residence permit is a document issued by the Office for Citizenship and Migration Affairs to foreigners, granting the right to reside in Latvia either for a specified period of time, usually between six months and five years, or permanently. Residency in Latvia gives you the opportunity to live, work and/or study in the country and use the medical, public and other services available to Latvian citizens. Latvian residency not only offers you the opportunity to travel visa-free to all countries within the Schengen zone, but also facilitates the visa process for other countries, such as the USA and the UK. The main advantages of a temporary residence permit in Latvia are:

Be able to stay in Latvia without restrictions (according to the conditions of your temporary residence permit)
The ability to travel to any country within the Schengen area for a period of up to 90 days within a period of six months
After obtaining your residence permit, your family members (husband/wife and any children under the age of 18) are entitled to obtain a residence permit and enjoy the same benefits as Latvian citizens.
After five years of temporary residence in Latvia, you can apply for a permanent residence permit, and after ten years, you have the right to apply for Latvian citizenship through the naturalization procedure.
Subordinated deposit: a ticket to a temporary residence permit
One option is to make a subordinated deposit to a credit institution; this is a legal route to obtaining a temporary residence permit for a period of five years. In order to apply for residence in this way, you need to make a financial investment of at least 280,000 EUR in a form of subordinated capital — e.g. subordinated debentures or a subordinated loan — to a credit institution, thus becoming its partner for a certain period.

Various Latvian credit institutions offer subordinated deposits as a service to non-residents, and each offers personalised terms for subordinated loans. The most common conditions are as follows:

The currency of deposit can be either EUR or USD; some banks accept RUB and other currencies.
The minimum deposit is usually 100,000 EUR or 150,000 USD, but if you are obtaining the subordinated loan in order to apply for a temporary residence permit, the investment needs to be at least 280,000 EUR.
An additional state fee of 25,000 EUR is required to process your residence permit application, regardless of which bank you choose to invest in.
Typically, the term offered is five, seven or ten years. In contrast to other kinds of financial investments, a subordinated deposit is non-terminable throughout this period.
Due to the non-terminable nature of subordinated deposits, banks are able to offer significantly higher interest rates in comparison with other types of deposits.
Subordinated deposit application procedures and requirements
If you have decided to apply for a temporary residence permit in Latvia through the subordinated deposit route, the first thing to do is to approach one of the banks offering this service. After acquiring the subordinated capital of a Latvian credit institution, you can prepare the documents that must be submitted to the Office of Citizenship and Migration Affairs in Latvia. The main documents include:

Evidence of sufficient assets and place of residence in Latvia
Reference letter regarding your criminal record from your home country
Completed questionnaire with attached photographs
Confirmation of marriage and/or birth of children, if applicable
Confirmation that all state fees have been paid
Upon receiving your residence permit, you will need to take out health insurance and obtain a medical reference issued by a medical institution registered in Latvia. Most banks offering subordinated deposits as a means of acquiring a temporary residence permit have put comprehensive advisory and support services in place to facilitate this process for their clients.

Advantages of acquiring subordinated deposits
Other than the residence permit itself, which is of course the main purpose and advantage of investing in the subordinated capital of one of Latvia's credit institutions, another noteworthy advantage is the larger gains to be made due to the higher deposit rates offered in comparison with other types of deposits. This is due to the fact that these deposits are non-terminable, which means that you cannot retrieve your funds before the agreed maturity date. However, when the maturity date arrives, you will be able to retrieve your original funds in addition to the interest that has been paid regularly throughout the investment period. The only non-retrievable payment is the official state fee of 25,000 EUR. Moreover, banks typically consider subordinated deposits to be the most convenient way of acquiring a residence permit.