Сompany registration in Georgia: Legal aspects and advice

Company registration is the process of formalizing the status of a legal entity in accordance with the laws of a certain country. During this process, the company is officially recognized as a legal entity with its own legal capacity.

To receive this status, it is necessary to provide certain documentation and fulfill the requirements established by the state authorities. Due to registration, the entity is able to conduct commercial activities, conclude contracts, participate in court proceedings and perform other legally significant actions.

If you plan to start a business in Asia, Georgia is an excellent choice for registering your company. The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Georgia, and is ready to share its results and help you choose the right jurisdiction.

What are the main advantages of incorporating a company (business) in Georgia?

Advantages of Registering a Business in Georgia

1. Promising location

Georgia is at the crossroads of Europe and Asia, making it an ideal hub for international trade and logistics. With duty-free access to the markets of the EU, CIS, and China, entrepreneurs benefit from favorable conditions for exporting goods and services. This strategic positioning also supports businesses looking to expand into global markets.

2. Favorable tax regime

Georgia boasts one of the most competitive tax systems in the world. The corporate tax rate is 15%, and reinvested profits are tax-exempt, significantly reducing the financial burden on businesses. Additionally, the country has signed over 50 double taxation avoidance agreements, making it an attractive destination for international companies.

3. Political stability and business support

The Georgian government promotes entrepreneurship by implementing reforms to create a transparent business environment. The country enjoys a stable economy and a reliable legal framework, which minimizes investor risks. Government support programs for small and medium-sized enterprises also provide additional growth opportunities for businesses.

4. Highly skilled workers

Georgia offers competitive salaries to well-educated workers in key sectors such as IT, finance, and tourism. The country’s educational institutions produce specialists who meet modern business demands.?

5. Residency opportunities for investors

Georgia allows foreign entrepreneurs to obtain a residence permit through investment in the country. This allows business owners to operate in a favorable economic environment and gain access to the country’s social and economic benefits. The combination of investor-friendly legislation, developed infrastructure, and a growing economy makes Georgia an excellent location for international business.

How to register a company in Georgia and what are the main requirements for such registration?

Step 1. Initial setup

• Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
• Preparation and filing of the package of documents.

Step 2. Company registration

• Choosing a company name;
• Facilitating the notarial process for the company’s official registration;
• Submitting the application for registration together with all necessary documents including the Charter of incorporation with the National Agency of Public Registry of the Ministry of Justice of Georgia;
• Payment of state fees;
• Assisting with the company’s registration with the tax authorities;
• Obtaining a special license for your business, if required (depending on the license needed, the company will be a subject to a higher capital requirement).

*Duration: up to 2 weeks if all documents and information are complete and correct; to incorporate a company in Georgia, all documents issued outside of Georgia must be notarized and apostilled or legalized, then translated into Georgian and notarized

Requirements for registering a company in Georgia on the example of a Limited Liability Company (LLC):

• Shareholders: Georgian laws do not state any limitations with regard to the minimum/maximum number of shareholders, so the company must have a minimum 1 shareholder. In addition, there are no restrictions on foreign ownership and corporate governance of legal entities.
• Director: Georgian laws do not state any limitations with regard to the minimum/maximum number of directors, so the company is required to have at least 1 director. The director can be a resident or non-resident of the country.
• Company secretary: there is no requirement.
• Minimum share capital: there are no requirements with regards to the minimum amount of the share capital.
• Legal address: the company must have a registered office address in Georgia for legal correspondence and official notifications.
• Liability: the shareholders’ liability is limited to their contribution to the company’s capital.
• Accounting: company is required to prepare all necessary filings and financial statements.

What do you have to know about taxes when registering a company in Georgia?

Corporate income tax (CIT):

• The standard CIT rate is 15%.
• Generally, this tax is only levied at the time of distribution.
• Profits reinvested in a company can remain in the company indefinitely without being taxed.
• CIT for Virtual Zone Companies / Free Industrial Zone (FIZ) entities is 0%.
• CIT for International Company status is 5% at the time of distribution.

Personal income tax (PIT):

• The standard PIT rate is 20%.
• Individuals with an annual turnover of less than GEL 30,000 (~ €9,947), without employees and registered as a micro-business are exempt from paying tax on their business income.
• Individual entrepreneurs with an annual turnover of less than GEL 500,000 (~ €165,797) can register as a small business and pay tax at the rate of 1% of their turnover. The rate increases to 3% if the annual turnover exceeds GEL 500,000 (~ €165,797).

Value-added tax (VAT):

• The standard rate is 18%.
• Georgia does not have reduced VAT rates, making it relatively simple compared to countries with multiple VAT rates.
• A person / company who provides economic activity and the total amount exceeds GEL 100,000 (~ €33,159) during any continuous 12 months, is required to register as VAT payer.

For readers?

Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Georgia. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.?

By choosing our company formation service in Georgia, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Georgia and pave the way for your business success!

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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.