Registration of a company in Georgia
Georgia has been attracting investors from all over the world for several decades already. The state administration actively works on simplification on procedures of registration of legal entities and proprietors, lower taxes, and creates zones with beneficial taxation. The favorable investment climate of the country was marked by the World Bank, which in 2018 placed Georgia on the 6 place in its rating “Doing Business”. Low taxes are not the only benefit of the country. Registration of a company in Georgia is also beneficial for manufacturers; by placing here the production capacities they not only save on taxes, having the license “Made in Georgia” businessmen obtain a duty-free access to markets of countries of EU, CIS, China, and Turkey.
Our company actively deals with establishment of legal entities in Georgia. We have a wide experience in this sphere and established contacts with all related state departments that participate in company registration. Clients that order our service obtain a full set of services related to business in Georgia: preparation of constitutive documents, registration of a legal entity of the desired organizational-legal form, bookkeeping support, nominal service, and preparation of hire agreements. Besides, our Russian-speaking lawyers and bookkeepers easily deal with the local legislation, while also being residents of Georgia. Due to this, we clearly understand wishes of our clients with no language barrier between us.
Speaking Georgian is very important when registering a company. Despite most citizens of Georgia understand Russian, all applications and files when addressing the tax service or the House of Justice should be completed in Georgian. Mastery of language is also necessary to communicate with state officials. Having a wide experience in registration of legal entities, we may quickly register a company and open an account in the leading Georgian bank. Independently, without speaking the state language and without knowing the applicable legislation, it will be problematic to establish a business in Georgia, while the entire procedure will take much more time.
The price of our services on registration of a company in Georgia starts from 1900 EUR. The price depends on founders – natural persons or legal entities, and the desired status – standard, a company of IT zone, or a company in FIZ.
Types of legal entities in Georgia
For 2018, direct investments in Georgia made 1,232 bln. USD. Most of all, interests in business was demonstrated by investors from Azerbaijan (240 mln. USD, 19,5%), Great Britain (203 mln. USD, 16,5%), Netherlands (167,9 mln. USD, 13,6%), USA (103 mln. USD, 8,4%), Panama (74,7 mln. USD, 6,1%), China (65,4 mln. USD, 5,3%), Russia (60,1 mln. USD, 4,9%). A great interests to business in Georgia was also demonstrated by neighbor countries: Kazakhstan, Turkey, Ukraine, and Armenia.
The leading sectors on attracting investments are: finance (277,9 mln. USD, 22,5%), transport (209,9 mln. USD, 17%), energy (157,2 mln. USD, 12,8%), and manufacture (142,3 mln. USD, 11,5%).
In comparison with 2017, the amount of investments in Georgia had reduced to one third. Decrease of the amount of accruals is not related to worsening of the economic situation in the country. The reason is that in 2018 construction of the gas pipeline Baku-Tbilisi-Erzurum was finished, as well as certain enterprises transferred from foreign investors to the ownership of citizens of Georgia.
In Georgia there are 4 types of companies: with solidary responsibility, limited liability, joint stock and limited share. Also it is possible to register a cooperative or function as a sole proprietor. According to statistics, the most popular form of business in Georgia among legal entities, with a great predominance, are limited liability companies. They take 98% in the total number of all existing companies and enterprises.
The reasons to choose this organizational-legal form are the following:
- residents or non-residents can be the founders;
- no limitations on the amount of the authorized capital;
- perfect variant for manufacturers in the segment of small and medium business, who also may expect tax benefits from the state;
- company is liable not only with its property, founders bear responsibility between themselves according to their shares of capital.
Special statuses of legal entities in Georgia
An investor can register a legal entity in Georgia under regular terms. Such companies carry business according to the applicable legislation of the country, pay taxes, and file reports.
The advantage of the fiscal system in Georgia is that after the reformation the number of taxes had greatly reduced — to 5 national and 1 local. Moreover, authorities introduced the Estonian model of taxation that allows avoiding income tax if a company re-invests in into development of its business. In the rating made by the international audit company PricewaterhouseCoopers, Georgia takes the 16 place by the level of simplicity of the tax system. As demonstrated by the study, a local company needs only 220 hours to perform all tax duties, while the share of tax payments makes 9,9% in the total income of a taxpayer.
Due to the loyal and simply system of taxation at registration and during business activity, Georgia attracts many businessmen from neighbor countries.
Nevertheless, authorities of Georgia let increase the effectiveness of investments even more. This is made through registration of a company in the territory of the Free industrial zone (FIZ) or registration as a person of virtual zone.
Benefits of registration of a company in the territory of FIZ in Georgia
In the territory of Georgia, 5 FIZ operate: Poti, Tbilisi, Kutaisi, Hualing and Kulevi. Benefits of registration of companies in their territory are:
- exemption from tax: VAT (18%), on income (15%), on dividends (5%), on property (1%);
- exemption from payment of customs duties – up to 12% depending on products;
- no need in reporting;
- cheaper public utilities (electricity, water, gas) due to savings on VAT;
- provision of the entire infrastructure and services for effective business – the territory of FIZ comprise warehouses, office premises, and customs points operating 24/7. In the territory of free zones broker, security, and loading services are provided, parking lots for transport are available;
- automatic provision of a legal address for registration;
- location in the relative proximity to airports, railroads, highways, sea ports, which allows greatly saving on logistics;
- right of payments in different currencies and the absence of currency control.
There are practically no limitations for companies in FIZ. A company may be registered here with founders-citizens of Georgia or foreigners, as well as foreign or local legal entities. There are practically no limitations for types of activity as well. In the territory of free zones, it is only prohibited to manufacture and sell weapons, ammunitions, drugs, psychotropic substances, tobacco and excisable goods. Besides, within FIZ services of residential lease are not provided.
Companies registered in the Free industrial zones can use all tax benefits provided that they sell their products outside the country. Trade deals with residents of Georgia are taxable at rate 4%, imposed with VAT and tax on income.
FIZ are designed for companies that wish to save on taxes and obtain duty-free access to markets of countries, with which Georgia signed agreements on free tradeе.When choosing a free industrial zone, its specialization shall be considered. For example, FIZ Tbilisi is focused on consumer goods and IT, FIZ Kutaisi and Hualing – production, processing of wood and stone, Kulevi — oil production companies, Poti – also production of various types of goods, trading.
Benefits of registration as a person of virtual zone
Obtaining status of a person of virtual zone in Georgia is only possible for companies dealing with IT. This means the activity regarding development and implementation of software, web design, studying information technologies, in other words – everything related to creation of program products. Companies registered as a person of IT zone are not subject to tax on income or VAT; their products when exported are not subject to customs duties. Persons of virtual zone pay only 5% of the extracted capital. Deals between them and Georgian companies are taxed at regular rates.
Benefits for companies operating in the IT sphere were implemented by the government of Georgia to attract extra investments, and should promote the development of computer technologies in the country. The certificate verifying the status of the company is issued for 1 year, after that it should be updated. Issuance of the certificate takes 10 working days; receiving it takes 2 more days. Please mind that the document exists in electronic form, not in a printed form.
Benefits of registration of a company as a virtual person:
- less tax burden;
- possibility of working remotely, without visiting the territory of Georgia;
- no need to hire a complete working staff.
Prices for registration of a company Georgia
The price for registration of a company depends on its status:
- regular – 1900 EUR;
- with virtual status – 2800 EUR;
- with registration in FIZ – 3800 EUR.
The prices increases for 1000 EUR if a legal entity is among founders of a company. Except payment for registration, non-resident should pay the price of opening of a corporate bank account, and companies from FIZ should also purchase a license.
In turn, the legal address And yearly service are provided to our clients for free.
Benefits of registration of companies Georgia
Non-residents choose Georgia as the country for leading business activity due to the following:
- clear taxation and available beneficial zones;
- quick and simple registration;
- absence of hardly fulfilled requirements to legal entities (no limitations on the amount of capital; non-residents can be founders);
- stable banking system;
- Georgia is not a participant of the system of automatic exchange of information;
- developed Internet banking, due to which managing bank accounts can be done even outside Georgia;
- registration of a company or opening a bank account can be made through a representative with a power of attorney;
- Russian-speaking officials in banks; many Georgians also speak Russian (which is important from CIS residents).
Procedure of registration of a company in Georgia
A legal entity can be registered without visiting the country. In most cases, clients address us for the service of registration, which is made remotely with a notarized power of attorney.
To start operation in Georgia, you should:
- Contact us at: email@example.com.
- Complete a short questionnaire so that we could prepare a list of recommended services: nominal service, bookkeeping support of business, opening corporate or personal account.
- Pay for services according to the invoice.
- Our company prepares all the necessary constitutive documents and sends to the client via email.
- A client signs the by-law and the protocol of meetings of the new legal entity and notarizes the power of attorney for our representative. All the prepared documents are sent by global shipping service.
- Upon receiving all documents, we start registration of a company.
- We open a corporate account i one of the leading Georgian banksов: Bank of Georgia/Silk Road Bank/TeraBank.
Upon registration of a company and opening of an account, a client receives the extract from the register of registration of legal entities, the by-law and the protocol of meetings, the license (if a company is from FIZ), and the electronic certificate (if a company obtained a status of a virtual person).
Documents necessary for registration:
- international passports and/or constitutive documents of participants of the company;
- the by-law and the protocol of meetings of the new legal entity;
- the decree of assignment of the director and his consent for execution of duties;
- power of attorney for a company representative;
- samples of signatures of managers of the company (for the bank).
It should be noted that opening a corporate account for a regular company can be made in 1 working day. Opening an account for a для legal entity with registration in FIZ is also made quickly, provided that a resident of Georgia is among founders. Whether founders are non-residents, the procedure may take up to 1 week. Registration of a company in IT zone takes 13 working days, which is explained by a long process of execution of the certificate.
If you are interested in registration of a company in Georgia (regular, in FIZ or with a status of a virtual person) or you have any questions, please contact us at: firstname.lastname@example.org. We will answer your questions immediately and will clarify all the peculiarities of starting business in Georgia, will help to prepare all necessary constitutive documents and open a bank account, so that you could start business here in the nearest future and with optimum benefits for you.
Tags: #FIZ Georgia #Registration of companies in Georgia #Taxes in Georgia