PayPal account limited or permanently limited, and the 180-day hold
If PayPal has limited your account and holds your money, the user agreement you accepted sets the rules. The US agreement caps a hold at 180 days, outside court orders, regulatory requirements and other legal process (US agreement). The agreement a Latvian business signs, updated the same day, sets no cap and allows more than 180 days for restricted activity (Latvian agreement).
What limited and permanently limited mean
The PayPal User Agreement for Latvia, updated on 4 November 2026.
A business in Latvia contracts with PayPal (Europe) S.à r.l. et Cie, S.C.A., under one agreement for residents of 13 countries, and must be registered in one of them. PayPal can limit the account if it believes a third party uses it without your knowledge, your card or bank account was used without authorisation, you broke the agreement or the Acceptable Use Policy, or there is a risk of liability. It can also limit to comply with the law, and keep the limit after your explanations if the risk remains (Latvian user agreement).
We found no official PayPal definition of "permanently limited". A forum reply attributed to a PayPal representative describes a hold, then a withdrawal; no official page we found says so.
2 months' notice
PayPal can close the account at its convenience with 2 months' notice, at least 60 days (Latvian user agreement).
Breach, inactivity or unauthorised access
A breach, 3 years without a login or suspected unauthorised access lets PayPal close at any time, giving reasons where practicable (Latvian user agreement).
After closure, PayPal can keep the e-money as long as reasonably needed for reversals, fees, fines and other liabilities, with no fixed duration, then you withdraw what is undisputed (Latvian user agreement).
The 180-day hold: US against Latvia
Two agreements updated the same day, two different ceilings.
| Agreement | How long PayPal may hold your money | Official source |
|---|---|---|
| US, 4 November 2026 | "For up to 180 days", unless a court order, a regulatory requirement or other legal process requires otherwise | US user agreement |
| Latvia, 4 November 2026 | As long as reasonably needed, no fixed duration. For restricted activity, more than 180 days if PayPal requires it | Latvian user agreement |
The Latvian text mentions 180 days once, for restricted activities: PayPal can keep the funds in the reserve account "including, without limitation, for more than 180 days if so required by PayPal". For a card payment, the risk lasts until the chargeback period ends. PayPal can also set a reserve when it judges the risk high, rolling (its example: 10% held for 90 days) or minimum (Latvian user agreement).
The European agreement is not softer on holds
A Latvian company's money can be held longer than a US account's, because the Latvian text has no 180-day ceiling. A European company does not shorten a hold.
The risks PayPal names
None of them depends on the company's country.
Selling months before the date
The agreement gives tickets sold months before an event as its example of a risk that is "higher and more enduring" (Latvian user agreement).
A rapid rise in your usual volume
Poor selling performance is a signal: an abnormal number of claims and chargebacks, an entirely new or expensive type of product, or a rapid rise in your usual volume (Latvian user agreement).
The Acceptable Use Policy, updated on 17 July 2023, bans, among others, firearms and currency exchange, and needs PayPal's approval first for gambling, crypto and adult content (Acceptable Use Policy). Organisers: see our guide for event promoters in Europe.
What a Latvian SIA changes, and what it does not
A file PayPal can check, not a shield against limits or holds.
A company registered in the account country
Latvia is one of the agreement's 13 countries, so an SIA applies as a business registered where the account is held (Latvian user agreement), with an account in its own name and a Latvian IBAN.
The grounds for limits and holds
Claims, chargebacks, volume spikes and restricted activities count whatever the country, and the Latvian text has no 180-day ceiling. It does not say where the owner must live.
What PayPal can check on an SIA
The commercial register is public and shows the board, the paid-in capital and the legal address (Commercial Law). An accountant, in-house or external under a written contract, keeps the books (Accounting Law). The annual report is due 5 months after year end for micro and small companies, 7 for medium and large ones, and the register publishes it (Annual Accounts Law). The VAT number can be checked in VIES.
Why substance matters
Article 21.¹ of Latvia's anti-money-laundering law bars Latvian banks, payment and e-money institutions from serving a shell arrangement that has no real economic activity and whose country of registration does not require it to file financial statements (AML law). It binds institutions under Latvian law and says nothing about providers licensed elsewhere. An SIA files public accounts but must still prove real activity. A nominee director or an unreachable address works against you: where it finds a breach, the VID can suspend the company within 5 working days and have its settlements suspended (Law on Taxes and Duties). Tell PayPal where you live, where your customers are and what you sell: a coherent, truthful file is the point.
What to do with a limited account now
Find the agreement you signed
US or Latvian: the hold rules differ.
Answer exactly what PayPal asks
Send identity, invoice and delivery documents that match your account details.
Fix the signal behind the limit
Chargebacks, a new product, a volume spike or an activity needing approval.
Do not work around the limitation
No account in someone else's name, no borrowed details, no VPN.
Build the company first, then apply
Form the SIA with real activity, a reachable address and proper accounts, then apply as the company.
What no structure can promise
No set-up guarantees that PayPal accepts an account or keeps it open: PayPal decides. Providers limit and close European accounts too, for restricted activities, high dispute rates and sanctions. Payoneer's EU terms bar anyone who lives, works or does business in a country restricted by OFAC, whatever the company's country (Payoneer EU terms).
Your home country's rules still apply: foreign-exchange rules, the tax residence of a company managed from there and controlled foreign company rules. They were outside our sources, so check this with a licensed adviser in your country before you form anything.
What Balt Partners does
From Riga, we form the SIA, introduce it to banks or payment institutions, set up VAT and accounting, and prepare the documents providers usually ask for. You apply to PayPal yourself. See a bank account for a Latvian company, and what to do when Stripe closes your account or when Wise closes a business account.
Questions about limited PayPal accounts
The Latvian agreement allows a limit for unauthorised use, a breach of the agreement or the Acceptable Use Policy, a risk of liability, or legal compliance.
We found no official definition. The Latvian agreement lets PayPal close for a breach and keep the money as long as reasonably needed, then you withdraw the undisputed funds.
The US agreement allows up to 180 days, longer only under legal process. The Latvian agreement sets no cap and allows more than 180 days for restricted activity.
In Latvia, an ordinary closure needs 2 months' notice. A breach, 3 years without a login or suspected unauthorised access allow closure at any time.
Yes. Latvia is on PayPal's worldwide country list, and the Latvian agreement requires a business to be registered in one of the countries it covers, Latvia included.