Registration of a company in the Free Industrial Zone of Tbilisi
Registration of a company in the Free Industrial Zone of Tbilisi is a catching opportunity for investors to start their businesses in the capital of Georgia on beneficial terms. Due to the absence of taxation, legal entities and sole proprietors registered in the territory of a free zone may significantly diminish their costs and therefore increase the competitiveness of the business. An important factor that favorably influences the investors’ wish to start operation in the territory of FIZ Tbilisi is the possibility to issue a certificate of origin for goods. With the latter, businessmen can supply their products to markets of countries of the EU, CIS, EFTA, China and Turkey. This is especially alluring for investors from countries that have no similar agreements on free trade. Beside the abovementioned, benefits of operating in FIZ Tbilisi are low fees for electric energy, moderate rent, and which is also important, carrying business directly in the capital of Georgia.
Our company may undertake all the peculiarities of registration of a legal entity in the Free Industrial Zone of Georgia. In just 2 days we provide a client with all constitutive documents for a new entity under a beneficial tax regime. The cost of registration of a company in FIZ Tbilisi makes 3800 EUR, provided that all its participants are natural persons. If a legal entity is among the founders, the price increases for 1000 EUR. Besides mandatory expenses, you should purchase a standard (4 000 USD) or a general license (8 000 USD) for goods or services. Meanwhile, separate licenses should be purchased for goods and services.
Review of the Free Industrial Zone of Tbilisi
The Free Industrial Zone of Tbilisi is one of the Georgia’s youngest FIZ. It was established in December of 2015 on the basis of the Governmental Decree №549 dated 26.10.2015. Subject to the legislative act, rights of the administrator of the Tbilisi Technological Park was given to the LLP “Georgia Teknologi Park”. A territory in the region Gldani in the industrial zone with an area 17 ha was allocated for FIZ for the period of 49 years.
The administrator company was obliged to prepare all the necessary infrastructure for potential investors who wish to start operation in the territory of the Free Industrial Zone, including fencing FIZ and providing its security, placing and arranging points of customs control and customs post, and installing motor-truck scales. Creation of a necessary infrastructure and connection of mains by the company LLP “Georgia Teknologi Park” (owned by BitFury Holding BV) cost 2,5 million lari. In general, investment obligations of the administrator made 30 million lari.
The biggest investor of FIZ is BitFury Group – the company operating in the sphere of blockchain technologies and the industrial miner of cryptocurrency. In July of 2014 in Gori, the company opened the first Georgian data center with capacity 20 MW. In 2015, the company BitFury purchased the territory of the future Free Industrial Zone at the state for 1 lari. Already on the 1 December 2015, the second data center with capacity 40 MW was opened. The amount of investments in construction of the data center in Tbilisi made 30 million USD. Altogether, the company had invested in the Georgian economy 140 million lari and hired 180 people during the period from 2015 till 2017.
The company BitFury Group had certain reasons to decide operating in the territory of FIZ; the beneficial tax regime allowed it greatly shortening the costs of electric energy, which made a major part of its operation costs. Nevertheless, in the beginning of 2018 the company BitFury sold its data center in Tbilisi to Chinese investors Chong Sing Holdings.
More than 200 of companies are registered in the territory of FIZ Tbilisi, and the number of people who wish to start their businesses here is constantly growing. To boost the attractiveness of the beneficial zone, the logistic center with an area of 3 000 sq.m. was built in its territory (put in commission in November of 2018), and yet it was insufficient to cover the demand, and building of another one logistic center was started soon but now with an area of 2 500 sq.m. Most companies operating in the territory of the beneficial zone belong to the sphere of pharmaceuticals, IT technologies, logistics, and also use warehouses for storing products.
The territory of FIZ Tbilisi comprise full-scale smart offices, warehouses, as well as 28 ready land areas for construction of new buildings for individual need of companies. The zone is located not far from the international airport Tbilisi (30 km) and the international highway E60 (direct exit).
Benefits of the Free Industrial Zone Tbilisi
The main priority of the Free Industrial Zone is to further improve the conditions for businesses of potential investors. All legal entities registered at address of FIZ are exempted from most of budget payments, including the income tax (15%), taxes on dividends and interest (5%), VAT (18%), property tax (1%), and customs duties (up to 12%).
Besides, investors might be interested in the following benefits of FIZ:
- no need in keeping records;
- responsibility for payment of the income tax from salary are born by employees themselves, who also submit declarations;
- cost of electric energy and other public utilities is lower due to the absent VAT, as the trade between FIZ entities are VAT free;
- export of companies operating within FIZ Tbilisi is VAT free, while they may appeal for a tax benefit;
- presence of a developed infrastructure, including warehouses, offices, conference rooms, land areas, as well as all communications;
- carrying business directly in the capital of Georgia;
- possibility of a rental agreement for a long term – up to 49 years;
- no limitations on type of business, or amount of capital;
- no matter who the founder of a new company is, a legal entity or a natural person, a resident or not;
- virtually no limitations on types of activity. In the territory of the beneficial zone, it is prohibited to produce and trade ammunition, weapons, drugs and psychotropic substances, and nuclear matters. In FIZ Tbilisi, it is prohibited to rent property for living, to trade or purchase excisable goods or tobacco (only personal use);
- not necessary to hire employees;
- carrying business directly in the capital of Georgia (available highly qualified human resources, developed urban infrastructure);
- available services on security of the territory, broker services, services on managing infrastructure, 24/7 customs-toll booth in the territory.
Price of registration of a company and extra expenses in the Free Industrial Zone Tbilisi
Registration of a company in FIZ Tbilisi makes 3800 EUR, provided that its founders are natural persons only. If a legal entity is among the participants of a new company, the price increases for 1000 EUR. Besides, to carry business in the territory of the Free Industrial Zone Tbilisi, the company should purchase a license:
- special license for one product/service – 4 000 USD;
- general license for multiple products/services – 8 000 USD.
For full-time operation of a company, a corporate account should also be opened; the price of service is 2900 EUR.
Moreover, companies registered in FIZ Tbilisi pay 4% tax on commercial deals with Georgian residents. It is possible to avoid tax expenses whether the products are realized outside the country boundaries.
It should be noted that saving on taxes, public utilities, and bookkeeping is much more significant than cost of registration of a company. BitFury is a stunning example.
Another benefit of carrying business in the territory of FIZ is the possibility to issue a certificate of origin, using which manufacturers can duty-free realize their products in countries of EU, CIS, China, and Turkey.
Registration of a company in FIZ Tbilisi
Most clients register companies in the Free Industrial Zone Tbilisi on a remote basis, using an authorized representative. In such a way, they greatly save their time and in just a few days obtain documents of a legal entity.
The stages of establishing a company with registration in FIZ:
- Addressing us via email: email@example.com.
- To define the client’s needs, we ask to complete a short questionnaire. You need to state all the required details of a further company: name, language of constitutive documents, planned type of activity, participants of company (natural persons or legal entities),information on its directors, contact details, main customers and suppliers.
- Our employee processes the questionnaire and contacts the client to discuss the details of the transaction.
- The client pays the price of services according to the invoice.
- Our corporate lawyer prepares the text of the power of attorney, which is always approved by the client.
- The client notarizes the power of attorney for our employee and delivers to us.
- Our lawyers prepare constitutive documents for registration of a new company: by-law and protocol of meetings. The by-law is executed according to client’s wish in English or Russian language.
- Registration of a company in the Register of proprietors and non-commercial legal entities.
- Completion of a questionnaire for the administrator of FIZ Tbilisi.
- Payment of the license price.
- Delivery of the license to the tax service.
The procedure of registration of a company in FIZ Tbilisi takes not more than 2 working days. Meanwhile, the whole procedure can be performed remotely without wasting one’s time. Upon registration of a legal entity, we deliver to the client: by-law, protocol of meetings, extract from the register and the license for working in FIZ.
Documents necessary for registration in FIZ Tbilisi
To prepare constitutive documents, a client should provide us with:
- international passport (if the participant is the resident);
- if the participant is the legal entity – the full set of constitutive documents, including: by-law, protocol of meetings, extract from the register of legal entities, decree on assignment of the director, his international passport, international passports of founders.
If you have questions or need to register a company in the Free Industrial Zone located in the capital of Georgia, feel free to contact us: firstname.lastname@example.org. We immediately start to process your application. Usually, registration of a company in FIZ Tbilisi takes 2 working days, after which you will obtain an effective instrument for carrying business on an international scale – a legal entity with practically absent taxation.
Tags: #FIZ georgia