Company Formation in Georgia – Overview
How easy is it to do business in Georgia? According to reports by WBG, Georgia is ranked the 24th country in terms of ease of doing business out of the investigated 189 countries. In the last twelve years, Georgia has had the best results in business, and the density of business tripled during this period. WBG report analyzed ten factors, and based on the analysis, here are the scores awarded to Georgia.
Access to electricity was ranked 6th;
Insolvency resolution was ranked 19th;
Payment of taxes ranked 7th;
Contracts enforcement ranked 5th;
Cross border trades ranked 18th;
Access to credit ranked 1st;
Ease of starting a business ranked 3rd out of 189 countries;
Property registration ranked 2nd;
And finally, accessing construction permits was ranked 2nd.
Bides these ranks, Georgia offers a conducive environment for foreign investment.
company formation in Georgia
One of the best locations to register your international company is Georgia. The fees involved in company registration is low compared to any other location in the world. Secondly, the process involved in company formation in Georgia is made simple by the elimination of a lot of bureaucracy. Finally, Georgia gives you other strategic advantages should your company embark on an adventure to invest in other foreign countries.
Specificity of company formation in Georgia
Just like every other country, Georgia has specific laws, rules, and regulations for company formation. The registration of companies in Georgia is done in accordance with the civil code 1997, laws of assistance, and guarantees for foreign investments and laws on the entrepreneurial act of 1994. These laws offer directives on how to set up businesses in Georgia. An example is for a company registration process; the necessary documents have to be translated to local Georgian language.
Foreign investors willing to set up companies in Georgia must notarize the company documents; this is done at the public notary. The registration documents should also be validated in the foreign investor’s original homeland according to the provisions set by the Hague convention.
Foreigners in need of registering limited liability companies must be present in Georgia during the process of registration to submit the necessary legal requirements or legal notarial aspects needed during the registration process. The process of business incorporation takes about a week in Georgia. However we have an option to form a company in Georgia even without a visit.
Company Formation in Georgia and Registrations Fee
The following are the necessary costs for company registration in Georgia.
The company registration fee which is usually GEL 100 or EUR 32. This cost is for the standard registration procedure, which usually takes one day. Alternatively, you can pay GEL 200 for an instant/immediate registration;
A virtual office fee. The cost is approximated at EUR 300 annually and is necessary for obtaining office address in Georgia;
Minimum share capital. No capital set requirements for company formation in Georgia;
A company formation fee. Our company is always available to help and guide you through the company registration process; however, we charge a fee of approximately EUR 900;
Accounting costs. These prices are approximated to be a minimum of EUR 50 per month; it includes all related accounting services such as a guide on corporate taxation system and bookkeeping services;
Types of companies available for company formation in Georgia
Limited liability companies in Georgia can be set up by either an individual or an already existing legal entity. Limited liability is the most preferred business form in Georgia since it specifies the liability of the company shareholders that is the minimum amount of shares they can own in the company at any given time. The formation of any limited liability company is based on the LLC charter, which outlines the company’s internal regulations.
Foreign investors are at the freedom to set up other business entities besides the limited liability companies. Foreigners and local investors are free to start up other entities, such as partnerships that are both general and limited partnerships. Foreign legal entities are free to diverse into Georgia through franchising, branch offices, and setting up local subsidiaries. A point to note, subsidiary, unlike branch office, is considered as an independent business structure.
The most common taxes in Georgia is the Value added tax rated at 18%. There are no reduced rates to this. However, Georgia offers a 0% value-added tax on exports, internal shipping services, electrical energy, tourism services, gold transfer to the National Bank of Georgia. Companies must register or value-added tax as long as they make a minimum annual revenue of GEL100. There is no income tax in Georgia. Corporate tax rate is 15%.
Company dividends are a subject of a 5% dividend whether paid to the individual or foreign legal entities. Should the dividends be distributed from a local Georgian company to another local company, then no dividend taxes are applicable. Any foreigner interested in starting a company in Georgia should know that the country is very receptive to foreign investments.
development is allowing foreign investment into the country. For any foreign businessman interested in investing in Georgia, all you have to do is to seek a business visa as long as you are ready to invest more than GEL300 000. Should this condition be met, you will be awarded as permanent resident permit, but before all these, it’s empirical that you confirm the investment value with an auditor in Georgia.
Also, note that investing in Georgia is not restricted to the above stipulation; as such, you are free to even start a lower investment in the hope that it will grow. Should you start such a lower investment note that you will be given a permit that will expire after one year of operations. These regulations are assigned to a foreigner who works as a freelancer, i.e., sole trader. Still, he or she will have to show a bank statement proving that they have sufficient capital to reside and operate in Georgia. As a freelancer, you can seek for the C2 visa category, which is inclusive in the ordinary visa. Contact our company for more specialties and details on how to go about the registration process and to meet the requirements.
Foreign businessmen can also use other visas to trade in Georgia, such as diplomatic visas and A5 visas, which you can use upon your arrival in Georgia for specific business dealings. As a businessman, you may also need an ordinary visa, a C3 category visa that is necessary when attending workshops, and other short- term business events in Georgia.
Georgia is open to investment from both locals and foreigners. So as a foreign investor interested in registering your entity or perhaps investing in Georgia, the first procedure is to seek registration with the entrepreneurial register. You will have to produce necessary documents that are essential for the registration procedure, and they include the following:
1. A company charter. This is a legal document that defines any legal entity seeking to have its operations in Georgia.
2. A document stating the Value and the contribution of each company shareholder in the company should also be provided.
3. An application with details such as company name, the amount of company capital available from shareholders, details of members of the company management team and board of supervisors, and the company legal entity is necessary for company registration.
All these details should be specific to the company. In case the business form is a limited liability company, additional requirements will have to be included in the company registration details that are the address of each shareholder, date of business commencement, business plan, details of the company founders such as profession, date of birth, address, etc.
These documents should be submitted to the appropriate authority, after which you can proceed to open a local bank account. To open the bank account with any local banks in Georgia, you have to provide certain documents that will be requested by the bank. After completing these procedures, you can officially start your commercial operations.
Company Formation in Georgia – The Process
Company formation in Georgia is not a complicated task. The following steps apply to both local and foreign investors:
Selection of the company type most suitable for your business;
Selection of the company name and registration through the National Public Registry of Georgia;
To register your company through this avenue, a statutory document has to prepared by the company representatives;
The statutory documents must be certified and authorized by a public notary in Georgia;
Get an identification number from the entrepreneurial register. The institution is charged with offering tax registration procedures for new companies and issuance of a certificate of state;
Open a company bank account with the local banks.
What happens during the Annual General Meetings in Georgia?
AGM is when all the shareholders gather annually for company meetings. During the AGMs, shareholders can engage in the following: the privilege to stop the current commercial undertakings of the company, trading of their shares, review of the company annual statements, buying or selling real estate property, amongst other activities. During the meetings, they can also hire and fire management team, approve the company statements, borrow money, refund and request for deposit payments.
The company director has the authority to summon for the AGM. This is done by sending invitation letters to company shareholders and the agenda of the AGM. The invitation should be issued a week before the company meeting. The shareholders’ cam makes any modifications three days after receiving the invitation. Voting on important matters is only allowed when the partners with voting rights are present; however, if they are absent, a meeting with a similar voting agenda can be rescheduled. Should the meeting ne rescheduled, the voting will take place in the absence or presence of the partners with voting rights.
We provide various legal services that are focused on covering all the specifics involved in company formation in Georgia. With our company, we guarantee a quick and efficient company registration process with minimal costs incurred.
One of our best lawyers is based in Tbilisi, the capital city of Georgia. Hiring our services to mean that you will have 23 years’ experience in the process of company formation in Georgia and our staff are committed to delivering nothing less but quality services beyond your expectations. Our company currently provides numerous services as listed:
Legal services. We offer you services related to intellectual property laws, civil laws, permits and business licenses, insurance laws, corporate laws, among others;
Company registration services such as guidelines on the type of business to start and assistance related to the incorporation of any type of company you are interested in registering in Georgia.