Georgia is generally considered a still-developing country; however, its economy is growing steadily, and that makes this country very appropriate for creating a business in Georgia. To anyone who likes investing in the probabilities in this country, it is vital to know the amount of money and the process required to start a business in Georgia.

Cost of Starting a Business in Georgia

There are many strengths that are associated with Georgia as a destination for investors irrespective of their origin, and therefore Georgia is relatively easy to do business in Georgia. This is the step-by-step guide on the most important activities and the costs that are likely to be incurred when starting a business in Georgia.

Steps to Establish a Business

Choose the Type of Business: Choose the type of such business entity as a legal entity for your business in Georgia. These entities consist of a Limited Liability Company (LLC), Joint Stock Company, or may choose to operate as a Sole Proprietor.

Select a Business Name: Select a catchy but at the same time specific name for your business in Georgia. It is mandatory that the name selected fulfills Georgian business laws’ requirements and does not sound similar to other company names.

Prepare Legal Documents:

After deciding on the name, register formation documents such as the company’s charter and bylaws which contain the structure and policies of the company for your business in Georgia.

Provide Capital:

There is a difference in capital requirement for the type of business entity but you are required to meet the local legal capital for your business in Georgia.

Submit Registration Application:

Upon preparing the documents, the business person must forward the business registration application to the appropriate Georgian agencies or offices. The matter that must be placed in the application are the company details, the information on the shareholders and directors, and the company’s organization for your business in Georgia.

Obtain a Business License:

Upon making your registration application and its approval, seek a business license to begin any business operations in Georgia. This step essentially depends on a number of factors particularly, the kind of business that an individual is involved in.

Register for Taxes and Social Security:

Next step, require a business license and then formally register with the tax office and social security for your business in Georgia.

Open a Bank Account:

Open a bank account for your company where all financial transactions should be channeled for your business in Georgia.

Comply with Local Regulations:

Compliance with all the local business laws and/or regulations is mandatory when starting a business in Georgia.

Start Business Operations:

After all the above steps are followed to the latter, you can start engaging your business in Georgia.

Investment Opportunities for Business in Georgia

The Georgian government boasts several incentives to improve the business climate, four industrial areas in Tbilisi and Poti and two industrial cities in Kutaisi. It is in Georgia and given its strongly competitive market, it is the best place to create a business in Georgia.

However, about the nature of the business, Georgia has employed the offering of tax reliefs based on the type of business with some parts of Georgia enjoying tax-free zones. Self-employed persons have an opportunity to pay only the personal income tax as other taxes do not concern the exporter in Georgia. Additionally, I would like to mention that Georgia has 54 double taxation treaties which are in the interest of investors doing business in Georgia.

Aspects of Establishing a Limited Liability Company (LLC)

An LLC is a legal entity created by up to 50 investors both local and international investors for business in Georgia. In this case, they get the benefits of investing in Georgia. Like in a partnership, members’ liability in an LLC is limited to their investments, and shares can be bought, sold, or passed on to the heirs. However, if you own only one share there is none to sell and complete the transaction of selling, thus no revenue in your business in Georgia.

Establishing a Business Through Legal Entities

You can also do business legally in Georgia, not necessarily through individual business but through legally recognized entities for business in Georgia. This type of model is famous because of the fact that shareholders have a limited responsibility towards the company in relation to the number of shares they possess which is determined by the internal legislation of business in Georgia.

Steps to Establish a Business in Georgia

• Determine which type of business entity is appropriate for your endeavors in Georgia.
• Select and complete a business name with the Georgian national register for your business in Georgia.
• Photocopy all documents for the creation of the firm and take them to the notary for stamping and acknowledgment in your business in Georgia.
• Register the company with the Business Registration Office and obtain an identification number for the company in Georgia.
• Register for taxes for your business in Georgia.
• Bank with a commercial bank of your own that is situated in your country while doing business in Georgia.
• How Foreign Investors Can Register a Business in Georgia
• Foreign investors need to register their business in the Business Register by providing the following documents for their business in Georgia:
• A document, which has been prepared specifying how each member has contributed to the business in Georgia.
• The initial contracts regarding the formation of the legal entity – company charter for your business in Georgia.
• An application containing basic information about the company: the amount of registered capital; the company’s address; the business plan; the date of the company’s establishment; information about the founder of the company for your business in Georgia.
• After submitting these documents, one should open an account in a business firm so that the business operations can start in Georgia.

What Happens During the General Meeting of Shareholders in Georgia?

The general meeting of shareholders is the highest authority in the Georgian company according to the Company Law when doing business in Georgia. There are ordinary and extraordinary meetings of shareholders that occur; where shareholders decide whether to start or wind up business operations and pass or ratify reports and financial matters including deposits or loans in Georgia.

The eligibility of a meeting may be performed and scheduled by the company’s director, and an invitation for the meeting should be sent to all those who need to attend the meeting a week before the meeting, together with the agenda for business in Georgia. In case the participants want to change the agenda, they may do so within the three days that the notice is required to be given for business in Georgia. Agreements can only be reached if key partners attend; otherwise, agreements can be made without partners’ participation in Georgia.

Permanent Residency in Georgia Through Investment

The process of starting a business in Georgia for the purpose of carrying on a business activity in Georgia can qualify for a work visa in case of investing not less than Three Hundred Thousand US dollars. In order to obtain permanent residency in Georgia you can inform an auditor of the amount of the investment which you intend to make for business in Georgia.

Real Estate Investment in Georgia

Purchasing land or any other desired value investment in Georgia does not qualify one to acquire residential status. Real estate purchases should be at least $100,000 or its equivalent in Georgian Lari with evidence of means for personal subsistence in Georgia for your business.

Currently, freelancers can apply for a C2 visa. If you are interested to know how to get the visa, please do not hesitate to contact us for business in Georgia.

Obtaining a Georgian Visa

The following are visa types for foreign entrepreneurs. Diplomatic Visas A1 and A5 are issued for business purposes in Georgia. Businesspersons may also need a Regular Visa (C3) for business and commercial transactions and for holding workshops in Georgia.

Costs of Starting a Business

Here are the primary costs associated with registering a Georgian company for business in Georgia:

Registration Fee:

The general registration fee is 130 GEL, subject to the costs of notarization and the legal contract for business.

Virtual Address Cost:

A virtual address is about 100 Georgian Lari one time payment to a Georgian person for a legal address in Georgia.

Minimum Capital Requirement:

Georgia provides favorable conditions for doing business without having a minimum capital to start a business.

Key Regulations for Company Formation in Georgia

Company formation in Georgia is governed by the Civil Code of the country passed in 1997, the Entrepreneurs Law of 1994, and the Foreign Investment Assistance and Guarantees law for business in Georgia.

Document Notarization:

Foreign investors are supposed to legalize company documents and this can only be done by following the Hague Convention recommendations for business.

Establishing an LLC:

In the case of an LLC, you have to be physically present to register where the process takes one week at most in Georgia for business.

Types of Legal Entities for Foreign Investors

Apart from the LLCs, foreign investors can open a partnership, subsidiary, or branch in Georgia. This means that the subsidiaries are separate legal entities, unlike the branch office for business.

Main Taxes for Businesses in Georgia

Value Added Tax (VAT):

VAT is 18% which is applicable to most services and goods except export, tour operator services, electricity, international shipping activities, and gold supplied to the National Bank of Georgia where the VAT rate is 0% for business.

Corporate Income Tax:

The tax applied on the company’s income is called corporate income tax and it stands at 15%. While Georgia does not impose consumption tax some products can be subject to consumption tax for business in Georgia. Any kind of business must pay VAT if its turnover is over 100,000 Georgian Lari a year.

Profit Tax:

Any distribution of dividends by a company attracts a fifteen percent profit tax regardless of whether the recipient is a non-resident or an individual in Georgia. However, there is a 0% tax for dividends to be distributed between companies in Georgia which in turn makes the country liberal for the formation of companies doing business.

Virtual Office Services in Georgia

Thus, while setting up a business in Georgia it is compulsory to have a business address and an office. The reality is that most companies require a fixed address, however, virtual office services will enable you to run your business in Georgia without that new office.

Thus, to do business in Georgia, it is necessary to fulfill several significant procedures and follow the legislation of the country. Expect legal and procedural demands governing the setup of your business in Georgia to enable a favorable business environment. That is true. You can also reach York Towers for help regarding the commercial and administrative real estate projects in Tbilisi, Georgia, for your business in Georgia.