Business entities in Georgia
Georgia is a good location for setting up a company, as it imposes few restrictions for foreign investments and has an easy and fast incorporation process. We at Healy Consultants usually recommend our Clients to set up a Georgian LLC or a free zone company, if they are interested in establishing an export-oriented manufacturing company. However, we can also assist our Clients that wish to establish a joint stock company, a branch office or a representative office in Georgia.
The Georgia limited liability company (LLC)
- The Georgia LLC is the most common legal entity used by entrepreneurs looking to setup an SME in Georgia. An LLC must appoint at least 1 director and 1 shareholder who can either be an individual or a legal entity. The directors and shareholders can be of any nationality and can reside in any country. There are no minimum share capital requirements and this type of entity is not required by law to undergo statutory audits;
- Best uses: As the most common type of legal entity, a Georgian LLC is a suitable option for foreigners interested in conducting trading and manufacturing activities in the country.
The Georgia Joint-stock company
- Georgia joint stock companies can be both public or private companies, however, it is mostly used for entrepreneurs that wish to publicly list their companies in the Georgian Stock Exchange Market;
- The joint stock company’s capital is divided into shares of equal nominal value, which can be either ordinary or preferential. The liability of the shareholders is limited to its share ownership. A Georgian JSC requires only one shareholder and one director, which can be of any nationality and residents of any country, and no minimal capital. If the shareholders wish to increase the company’s capital, they may issue additional shares;
- Best uses: Georgian join stock companies are recommended for larger projects that involve large investments of funds or raising private or public capital.
The Georgia free zone company
- Foreigners can form a wholly owned company in one of Georgia’s free trade zones. The free zones offer tax advantages, such as i) exemption from corporate income tax, ii) exemption from VAT and iii) exemption from property tax;
- Best uses: Georgia’s free zones offer attractive tax incentives suitable for investors looking to start export-oriented manufacturing companies in the country.
The Georgia branch
- The Georgian legislation allows foreign companies to set up a branch office in Georgia. The branch is permitted to conduct business in Georgia like any other legal entity, although its scope of operations is defined by the parent company. The branch must appoint a branch representative, of any nationality, to oversee the branch’s operations in Georgia;
- In order to complete the registration, Branch offices must submit i) application form; ii) appointment of branch representative and iii) details of the parent company and directors;
- Best uses: Do to the easiness to start a business in the country, establishing a LLC is usually recommended over branches. Branch offices are usually suitable for foreign banks that wish to conduct activities in the country.
The Georgia representative office
- Companies who are interested in Georgia business set up but do not want to incorporate a company should consider a representative office. This entity is only permitted to engage in market research and to promote the parent company’s products and services. It is not allowed to conduct any profit generating activities in Georgia;
- Best uses: Representative office are recommended for investors that wish to promote and explore the Georgian market, without carrying any commercial activity in the country.
Comparison table between Georgia business entities
|LLC||JSC||Free Zone company||Branch office||Representative Office|
|How long to set the company up?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes||Yes|
|Minimum paid-up capital?||US$1||US$1||US$1||US$0||US$0|
|File annual tax return?||Yes||Yes||Yes||Yes||No|
|Recommended corporate bank account?||TBC Bank||Bank of Georgia||Bank of Georgia||Terabank||ProCredit Bank|
|Does our Client needs to travel?||No||No||No||No||No|
|Resident director required?||No||No||No||No||No|
|Resident shareholder required?||No||No||No||No||No|
|Minimum directors allowed?||1||1||1||1||1|
|Georgia resident company secretary required?||No||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes||Yes|
|Georgia corporate tax rate?||15%||15%||0%||15%||0%|
|Annual financial statements required?||Yes||Yes||Yes||Yes||No|
|Statutory audit required?||No||No||No||No||No|
|Allowed to issue sales invoices?||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts?||Yes||Yes||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||Yes||No|
|Can rent an office space in Georgia?||Yes||Yes||Yes||Yes||Yes|
|Can buy property in Georgia?||Yes||Yes||Yes||Yes||No|
|Can own equity in other Georgian companies?||Yes||Yes||Yes||Yes||No|
|Estimate of total annual costs in Yr. 1||US$9,550||US$10,750||US$13,930||US$9,750||US$9,200|
|Estimate of total annual costs thereafter (excl. accounting and tax fees)||US$2,250||US$2,250||US$1,150||US$2,250||US$2,250|
|Sample engagement fee Invoice|