Buying a turnkey business in Georgia remotely
The onset of heavy economic downturn is not far off, and many businesspeople have already been thinking about new ways to optimize their business so as to avoid drastic declines in their profits. Georgia is one of the few countries nowadays, which offers a realistic opportunity to reduce tax and fiscal expenses, while maintaining high confidentiality of cash flows. Moreover, you will not necessarily have to spend your personal time on handling company registration and solving the border-crossing issues, as Offshore Pro Group can help you to buy a turnkey business in Georgia remotely.
What are the benefits of the Georgian jurisdiction for foreigners? Here you should pay attention to such instruments as company registration in the Free Industrial Zone or an entity in the Virtual Zone. With their help, it will be possible to practically reduce taxes to zero, and without having to actually transfer your business.
Attention!!! For questions of acquiring a turnkey company or registering a business in Georgia, as well as opening accounts, including remotely, contact us by e-mail: [email protected] or online chat and we will reply you as soon as possible.
Buying a turnkey company in Georgia: varieties of options
Georgian law allows doing business in the country in the following organizational forms:
- Joint Stock Company (JSC) – suitable for large businesses and large manufacturers. Number of JSC in Georgia at the beginning of the year – 891 entities.
- a limited liability company (LLC) is the best option for small and medium-sized businesses. The number of operating LLCs as of 01.01.2020 was 76,838 entities;
- cooperative (Coop.) – is more suitable for farms and enterprises engaged in agriculture and trade. There were only 197 cooperatives in Georgia at the beginning of the year;
- limited partnership (LP) – provides for partnership activities under the identical name, though this is not a very popular form of doing business in Georgia; at the beginning of the year, only 22 active limited partnerships existed in the country;
- joint liability company (JLC) – these companies are created by individuals who plan to operate under one name, and at the same time bear equal liability for the company’s obligations. The number of these entities in Georgia is not very large – only 202 entities.
High level of interest towards LLCs in Georgia is determined primarily by the relative simplicity of registration. Since there are no restrictions on the founding capital and the residency of shareholders. Representatives of any countries can create an LLC in Georgia, having formed a capital as low as only 1 GEL. This is the preferred form of doing business most often selected by foreigners, except the cases where enormous investments are envisaged in the production, mining, or power sector. In such cases, naturally, joint-stock companies are a more appropriate option. Secondly, accounting and tax administration of an LLC in Georgia is much simpler.
Turnkey company in Georgia: preferential tax treatment
Georgian jurisdiction offers foreigners the following options to reduce taxation:
- buy a ready-made company in one of the Free Industrial Zones of Georgia (FIZ);
- buy a ready-made IT company in the Virtual Zone of Georgia.
The first option is suitable practically for activities other than those prohibited in the country, the second – only for companies working in the field of information technology. It should be noted here that both options are only suitable for legal entities that sell their products outside of Georgia, that is, if their business has an export orientation.
Let’s take a closer look at the reasons why it is better to use these companies to conduct business on an international scale.
Buy a turnkey company in the tax-free zone of Georgia
As of March 2020, four free industrial zones are fully functioning in Georgia: Technological Park of Tbilisi, Poti, Kutaisi and Kutaisi- Hauling. Any tangible differences between these options will be observed only in case of actually conducting activities there (different levels of infrastructure development, access to maritime and railway transport, rental parameters, etc.). If you manage the business remotely through the company in the FIZ, you will not experience significant difference between the tax-free zones.
Advantages of doing business through a company remotely in a FIZ of Georgia:
- no taxation of export earnings (standard rate of 15%);
- no VAT (18% );
- no property tax (up to 1% );
- no tax on dividend payment (5%);
- low cost of banking services;
- the availability of remote account management systems (online banking), including with English and Russian language support;
- minimum costs for accounting support;
- there is no requirement to hire Georgians on open vacancies;
- no requirement to make contributions to the Pension Fund from the salaries of non-residents (2%).
Owing to the above, it is possible to significantly reduce the cost of doing business without actually transferring activities.
Nevertheless, it should be noted that companies registered in the FIZ of Georgia are required to annually renew their license for conducting activities in the tax-free zone. Therefore, a turnkey company in the SIZ of Georgia will not be suitable for a small business, since licensing costs will exceed the benefits of tax reduction.
Buying a turnkey IT company in the Virtual Zone of Georgia
Virtual zone is a zone with a designated special status, established by the Georgian government to attract businessmen to the country who are involved in the development of computer games, mobile applications, or working in other areas of information technology. The presence of a virtual zone certificate makes it possible to benefit from lower tax costs, mainly due to the absence of:
- Corporate tax on profits ;
Given the remote nature of operation with a finished Virtual Company in Georgia, businesspeople also receive these advantages:
- low cost of banking services;
- availability of remote account management programs;
- the opportunity to conduct business without an actual presence in Georgia;
- there is no obligation to apply for Georgian citizens;
- no need to pay contributions to the Pension Fund if there are no resident employees.
But it is necessary to take into account that companies registered in Georgia in the Virtual Zone are obliged to renew the certificate annually, but its cost is significantly lower than that for licenses in FIZ, although entities from Virtual zones are not exempt from the dividend tax of 5%.
In general, a turnkey company in the Virtual Zone of Georgia will enable businesses operating in the information technology field to reduce the tax burden and thereby increase efficiency.
Turnkey companies in Georgia: additional benefits for foreigners
There are a number of advantages that businessmen who want to buy a ready-made company in Georgia should pay attention to:
- the country is not a member of the automatic financial data exchange (CRS) system, while at the same time it is not on the black or gray lists of international organizations;
- bank employees speak Russian and English;
- No strict monitoring applied for transactions;
- Bank accounts are usually opened in the main currencies: EUR , USD and GEL, but it is possible in other currencies;
- no currency control and restrictions on international transfers;
- 56 existing agreements on avoidance of double taxation.
The procedure for buying a turnkey company in Georgia
Acquiring a fast, high-quality and effective tool for doing business on an international scale with the help of Offshore Pro Group is very simple. All you need is:
- Send us an email at [email protected] about your intention to buy a turnkey company in Georgia.
- Send us the scanned copies of documents to prepare a power of attorney.
- Pay for the cost of our services starting from 1 500 USD. You can make the payment transfer in any method convenient to you: PayPal , Western Union , MoneyGram , Webmoney , bank transfer or any other way.
- Discuss and finalize the text of the power of attorney.
- Sign the power of attorney and forward it to us along with other documents.
- We then perform the registration of the company in your name, and send you all the constituent documents, as well as keys and passwords for access to the corporate account (if any).
The cost of the service is directly affected by:
- tax exemptions: Free Industrial Zone or Virtual Zone;
- a variation of the Free Industrial Zone;
- the period of operation of the company;
- availability of a corporate account in a Georgian bank and/or in a foreign payment system.
If you want to reduce the tax burden on an existing business, we recommend that you pay special attention to turnkey companies in Georgia. These, among other benefits will allow you to significantly reduce the tax burden. To obtain detailed information and purchase a finished company, remotely write to: [email protected] and we will contact you shortly.
Tags: #Companies in Georgia