All About Forex in Georgia

A forex company in Georgia can become an attractive business tool for a foreigner who works in the brokerage services market. By means of a forex company, the business will be able to provide services abroad, at the same time with an ability to significantly reduce the tax burden. As a first step, it is necessary to register a legal entity in Georgia, get a Forex license and obtain the status of an international financial company.

Why a Forex company should be opened specifically in Georgia?

The ability to obtain a license and provide brokerage services attracts a significant number of foreign entrepreneurs and for this they are looking for jurisdictions that optimally meet these parameters:

• loyal tax laws;
• high level of confidentiality;
• ease of doing business;
• timing and ease of obtaining a brokerage license;
• reputation of the country.

It should be noted that you will find all of the above characteristics in Georgia.

Taxation

Having received the status of an “international financial company”, a Forex company in Georgia receives the following tax benefits:

• exemption from property tax (with the exception of land);
• only 5% of profit tax;
• exemption from dividend tax;
• Lack of obligation to withhold and control the payment of income tax from the wages of employees;
• A foreign resident of Georgia working here is exempted from paying income tax on his salary.

That is, thanks to this status, a forex company in Georgia will be able to significantly save on expenses and thereby increase profits.

Learn how to reduce taxation by using a company in the FIZ of Georgia

Confidentiality

Georgia is not a participant in the automatic exchange of financial and fiscal information within the framework of CRS , which means that the data on the company’s cash flows are reliably protected and cannot be accessed by the tax authorities of other countries.

Doing business

Not incidentally, for two years in a row  Georgia has been in the TOP 10 countries of the Doing Business ranking, which directly reflects the level of complexity of registering and doing business in 198 countries of the world. It can be stated with confidence, that most favorable conditions for doing business have been created in this small country, namely:

• no barriers for foreigners;
• it is possible to register a company in just 1 day;
• no restrictions on the level of capital (does not apply to brokerage companies, for which the minimum amount of charter capital is 500 000 GEL).

Moreover, consider that the country is practically free from corruption, bureaucracy; moreover, sudden, unplanned inspections by regulatory authorities are not practiced in the country.

All of the above plays quite favorably into the hands of businessmen who want to set up a business in Georgia, especially if plans to actively cooperate with foreign contractors.

Reputation

Georgia has established steady cooperation ties with all international organizations, it is not included in any “black” and “gray” lists, it scrupulously fulfills all the requirements of the FATF. Therefore, its reputation among international banks and organizations is at a fairly high level.

Forex License

In Georgia, it will be possible to obtain a Forex license in 30-60 days, subject to the availability of a full package of documents and compliance with the requirements established by the regulator. And it should be noted that these parameters for the Forex company in Georgia, as well as the list of documents are relatively standard ones, therefore, there should be no difficulties its registration. However, to ensure 100% success, it is recommended to use our services, as we have lawyers who are native speakers of the Georgian language and are well versed in local legislation.

The presence of so many favorable factors should cause interest in businesspeople who want to set up a Forex company in Georgia.

Requirements for Forex companies in Georgia

Companies that meet the following conditions can obtain a Forex license in Georgia:

• conduct activities in the form of LLC or OJSC;
• lack of criminal convictions record among the company’s management: over the past 10 years – for economic crimes, over the past 5 years – for violation of Georgian legislation in the field of securities, as well as especially serious crimes;
• requirement for authorized capital is in the amount of GEL 500,000 (about 162,000 USD);

There are no restrictions on citizenship or residency for the founders of the Forex company. To illustrate the ease of registering a legal entity in Georgia, it is noteworthy that even foreigners will be able to create a company here in just 1 business day. The main obstacles that non-residents will have to encounter, may include the lack of knowledge of the Georgian language and absence of legal address. However, with our help it will be possible to overcome these bottlenecks. We can assist you in registering a company in Georgia and opening a corporate account remotely without the actual presence of the founders in the country, and this EXCLUSIVE SERVICE is available only to our customers. 

After obtaining a Forex license, the company is obliged:

• to prepare financial statements in accordance with IFRS;
• not to reduce the level of capital below the threshold of 500,000 GEL;
• to provide access to reporting to the regulatory authority ;
• to keep storage of all reports in paper and electronic form for 6 years;
• to have a code of ethics, pricing policy, adequate procedures developed for risk management;
• to keep quarterly and annual reports, as well as provide the necessary information at the request of the regulator;
• to submit annual financial statements with an audit report no later than 90 calendar days after the end of the year;
• to submit quarterly reports no later than 45 calendar days after the end of the quarter,
• to comply with a number of other requirements regarding the management of funds of its customers.

Forex license in Georgia: required documents

In order to obtain the right to provide brokerage services to a company, it is necessary to provide the following package of documents to the Central Bank of the country:

• application in the prescribed form;
• certificates of absence of a criminal record among the company management;
• extract from the Public Register of Legal Entities of Georgia;
• constituent documents;
• information on the ownership structure of the company (data on shareholders / founders, partners, intermediate owners, including individuals, particularly: passports / IDs, information on citizenship and place of residence, a detailed curriculum vitae, certificates of no criminal record, income certificates and documents confirming sources of income; from legal entities : constituent documents, financial statements for the last year with an audit report);   
• information on the identity of all beneficiaries of the brokerage company who directly or indirectly own more than 10% of the capital (identification document, autobiography, income data), as well as evidence of their welfare (documents for real estate, vehicles, deposits);
• diploma of education of the company head, personal resume and two letters of recommendation;
• documents confirming compliance of all members of the governing body of a brokerage company with the requirements established by law. And each member of the governing body should issue a separate statement in confirmation of the above;
• all members of the governing body should fill out declarations in the prescribed form;
• documents confirming the right of ownership or use of real estate, where the head office of the brokerage company will be located;
• business plan;
• name of the supplier of the trading platform and a description of its technical characteristics (if any);
• financial statements for the last year or six months;
• a document confirming the presence of the authorized capital in the amount of GEL 500,000 and information about the sources of its origin;
• license fee receipt.

Attention!!! Documents issued abroad must be translated into Georgian and apostilled.

The regulator takes a decision to issue a Forex license in Georgia within 30 days after receiving a full package of documents.

Documents for opening a branch of a foreign Forex company in Georgia

Foreigners can not only open a new legal entity for providing brokerage services in Georgia, but also expand their branch network. This is especially true if the brand is international and has recognized reputation in many countries.

So, to open a branch of a foreign brokerage company, the following package of documents should be submitted to the regulatory authority:

• brokerage license of the foreign legal entity;
• extract from the register of legal entities in Georgia confirming the registration of a branch;
• consent of the supervisor of a foreign legal entity to open a branch in Georgia;
• a document confirming the existence of a minimum authorized capital;
• list of types of brokerage services that the branch is planning to provide.

The National Bank may require additional documents if the information provided is considered not sufficient for making the decision.

Requirements to the management of a Forex company

Not everyone can become a leader or enter the board of a Forex company in Georgia. In order to filter out unreliable applicants, the legislation of the country clearly defines the requirements that they must comply with:

• education in one of the areas: economics, finance, banking, management, audit, accounting;     
• minimum work experience in the relevant position in the financial sector – at least 4 years.

At the same time, it will not be possible to occupy a leadership position in a forex company, if the applicant:

• has in any way caused a damage or losses to a brokerage company or bank, the rights of clients of a financial institution were violated, or its activities led to the bankruptcy of the company;
• has abused authority in the line of duty;
• has held a managerial position in a Forex company or other financial institution in the past, and as a result of his activities, the company has become insolvent;
• has been convicted of a serious or especially serious crime;
• has been imposed an administrative fine over the past 5 years for violation of the legislation of Georgia in the field of securities.

All these requirements are set to protect the interests of brokerage clients.

Fulfilling all the requirements in order to open a Forex company in Georgia by foreign businessmen on their own may be quite challenging, as it is necessary to navigate the local legislation and know the Georgian language. In this regard, we are here to provide a full range of services necessary for opening a brokerage company in the country, as well as help obtain the status of an “International Finance Company” in order to optimize taxation. Write to us by mail: info@offshore-pro.info  and we will contact you as soon as possible.