Doing business in Georgia (the country) is known for its relatively simple procedures and business-friendly environment. Here is a general overview of the key steps and considerations:
1. Choose a Legal Form
The most common legal forms for business in Georgia are:
- Limited Liability Company (LLC): The most popular choice, where the liability of the owners is limited to the company’s assets. There is no minimum capital requirement. Can be 100% foreign-owned and managed by foreign citizens.
- Individual Entrepreneur (IE) / Sole Proprietorship: Suitable for freelancers, consultants, and small-scale operations. The owner is personally liable for the business debts. Can be eligible for Small Business Status (see Taxes).
- Joint Stock Company (JSC): Generally for larger corporations looking to raise capital through shares.
2. Registration Process
The business registration process is notably quick and simple, typically done through the Public Service Hall (PSH):
- Speed: Registration often takes one business day for standard service, and expedited service can complete it on the same day for an additional fee.
- Requirements (for an LLC as an example):
- Application for registration.
- Charter or Shareholder’s Agreement.
- Legal/Registered Address (you need a document confirming the right to use the address, e.g., a lease agreement or owner’s consent).
- Passport copies of the director and founders.
- All non-Georgian documents must be notarized, apostilled/legalized, and officially translated into Georgian with a notary’s confirmation.
- Foreigners: Foreigners can register a company in Georgia without needing a local partner or director, and it can often be done remotely via a notarized Power of Attorney (POA).
- Tax Registration: The initial business registration with the Public Registry also serves as tax registration with the Revenue Service.
3. Open a Bank Account
Once registered, you will need to open a corporate bank account in a local Georgian commercial bank. This process usually requires your company registration documents and the director’s passport.
4. Understand the Tax System
Georgia has one of the world’s most competitive tax systems. Key points include:
- Corporate Profit Tax: The standard rate is 15%, but it only applies to distributed profits (dividends). Reinvested profits are generally tax-exempt.
- Individual Income Tax: A flat rate of 20%.
- Value Added Tax (VAT): The standard rate is 18%. Businesses must register for VAT if their annual taxable turnover exceeds 100,000 GEL (Georgian Lari).
- Small Business Status (for Individual Entrepreneurs): If annual gross turnover is less than 500,000 GEL, an IE can qualify for Small Business Status, which levies only 1% tax on gross turnover (with some exceptions on business activities).
- Special Tax Regimes: Incentives exist for certain sectors like:
- Virtual Zone Status: For IT companies, offering 0% Corporate Profit Tax and 0% VAT on services exported outside Georgia.
- Free Industrial Zones (FIZ): Businesses operating here benefit from a 0% tax regime.
5. Legal and Compliance
- Licenses and Permits: Most commercial activities do not require special licensing. However, certain regulated sectors like construction, financial services, and pharmaceuticals do require specific licenses or permits.
- Labor Law: If you plan to hire employees, you must comply with Georgian labor law, including formal employment contracts and regulations on working hours and employee rights.
Disclaimer: This is a simplified overview. Since regulations and tax laws can change, it is highly recommended to seek professional advice from a Georgian legal and tax consultant before starting your business.