Accounting and tax
- Corporate tax in Georgia is imposed at a standard rate of 15%. All companies must register for taxation with the Revenue Service of the Ministry of Finance and must file annual tax returns by 1st of April of the year following the end of the fiscal year. The authorities allow a deadline extension to a maximum of 3 months;
- The Value Added Tax (VAT) in Georgia is levied at a standard rate of 18%. Companies with an annual turnover exceeding US$57,000 must register for VAT and file returns by the 15th of the month following the taxable month;
- Capital gains tax in Georgia is applicable on business income at the standard corporate income tax rate;
- A 5% withholding tax is applicable on dividends paid to non-resident companies, this can however be reduced where a double tax treaty is concerned;
- Interests paid to both resident and non-resident legal entities is subject to a 5% withholding tax. A higher rate of 15% is however applicable to companies residing in offshore jurisdictions such as British Virgin Islands, Cayman Islands, Hong Kong, among others;
- A 10% withholding tax is applicable on royalties paid to non-resident companies. A higher rate of 15% is applicable if the foreign company is resident in a low tax jurisdiction;
- Companies in Georgia are exempt from a number of taxes including i) capital duty ii) social security contributions iii) payroll tax and iv) branch remittance tax;
- Ordinarily, Georgian companies can carry forward business losses for a period of 5 years, however this can be increased to 10 years through a special application to the tax authorities. Carryback of losses is however not permitted;
- Georgia has so far concluded 46 double tax treaties with different countries including India, Germany, China, United Kingdom, Singapore, Ireland among others;
- Healy Consultants will assist the Client with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
- Georgian limited liability companies can be fully foreign owned;
- All business registered in Georgia must to maintain a legal registered office address within the country at all times;
- Clients and suppliers from foreign countries can verify the legal standing of a Georgian company by visiting the Georgia’s Secretary of State – Corporates Division webpage. Publicly available information include i) business name, registered address and legal status; ii) names and details of the company officers and iii) latest submitted annual returns;
- Positively both limited liability companies and public companies in Georgia do not require minimum issued share capital before business registration;
- Annual financial statements for both private and public companies must be filed in accordance to the IFRS, which are implemented in Georgia.
- Georgian Labour Code negates any discrimination on the workplace, by sex, race or nationality;
- All employment contracts must be in a language which is understood by the both the employee and the employer;
- In Georgia, the period of probation may not exceed six months and must always be accompanied by written agreement;
- The minimum wage in the Georgia is low and fixed at US$58 per month for private workers and US$64 for public workers;
- The standard working week is i) fixed at maximum 41 hours of work in a five-day working week. It is mandatory to have at least 12 hours between shifts;
- All employees working in Georgia are entitled to
- at least 25 days of paid annual holidays per annum;
- no less than 15 days unpaid holidays per annum;
- 13 days of national holidays and;
- no minimum amount of sick leave;
- 365 days after childbirth of which 70 are paid.
- Employers are entitled to suspend employment contract with a minimum notice of two weeks in case of i) infringement of contract terms; ii) long-term disability and iii) if work is performed in clear violations to Labour Code or other Georgian Legislation;
- In case of labor conflicts, both parties can settle the case in a Municipal Court.
Other business regulations
- The Georgia is one of the five permanent members of the United Nations Council and has acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention). Therefore, arbitration awards made in countries that are party to this convention should be enforceable in Georgia according to the provisions of the convention;
- The Georgia is a member of the World Intellectual Property Organization, since 1970 which allows i) foreign businesses to apply for a patent or a trademark and ii) give them same intellectual property protection conferred to Georgia nationals.