Why Start a Business in Georgia?

Starting a business in Georgia offers numerous advantages for foreign entrepreneurs, including a streamlined registration process, favorable tax regimes, and access to international markets.

Why Start a Business in Georgia?

• Strategic Location: Situated at the crossroads of Europe and Asia, Georgia provides access to over 2.3 billion consumers through free trade agreements with the EU, EFTA, CIS countries, China, and Turkey.

• Business-Friendly Environment: Georgia ranks highly for ease of doing business, with minimal bureaucracy and a commitment to reducing friction for foreign investors, ranking 7th in the world, according to the World Bank, in the “simplicity of bureaucratic procedures”. ??????

• Attractive Tax System: The country offers a simplified tax regime with flat rates and incentives for certain industries.

Choosing a Business Structure

Georgia offers several business entity types to suit different needs:

• Limited Liability Company (LLC): The most common structure, offering limited liability without minimum capital requirements.

• Individual Entrepreneur (IE): Similar to a sole proprietorship, suitable for small-scale operations.

• Joint Stock Company (JSC): Ideal for larger businesses planning to issue shares.

• Limited Partnership (LP) and General Partnership (GP): Suitable for businesses with multiple partners.

Steps to Register Your Business

1. Choose a Company Name: Ensure it's unique and complies with Georgian naming conventions.

2. Prepare Documentation:

• Application form

• Company charter

• Shareholders' agreement

• Proof of legal address

• Director's appointment and consent

• Passport copies of founders

• Submit Documents: File your application with the National Agency of Public Registry. Standard registration takes one business day for a fee of 100 GEL; expedited service is available for 200 GEL.

1. Tax Registration: Obtain a Tax Identification Number (TIN) from the Revenue Service.

2. Open a Corporate Bank Account: Required for business operations; banks may request additional documentation.

Taxation Overview

• Corporate Income Tax: 15% on distributed profits; reinvested profits are tax-exempt.

• Personal Income Tax: Flat rate of 20% on local-source income.

• Value-Added Tax (VAT): 18%; mandatory registration if annual turnover exceeds 100,000 GEL.

• Special Regimes:

• Virtual Zone Status: For IT companies, offering 0% corporate tax on services delivered outside Georgia.

• International Company Status: Applicable to certain IT and maritime companies, providing reduced tax rates.

Additional Considerations

• Licensing: Depending on your business activity, additional licenses or permits may be required.

• Language: All official documents must be in Georgian; consider hiring a local consultant for assistance.

• Legal Assistance: Engaging a local legal or business consultancy can streamline the registration process and ensure compliance.