DOING BUSINESS IN GEORGIA IN 2020
Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Georgia. Our services include i) Georgia business registration ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
| Compare different Georgian entities | Tax resident LLC | International Trading LLC | Intl. Finance Company | Free zone LLC | Virtual IT Zone Company | Representative office |
|---|---|---|---|---|---|---|
| Also known as | LLC | Special trade company | Intl. finance company | Free industrial zone company | VZE | Representative office |
| Best use of company? | All products and services | Trading with global Clients | Financial services | Manufacturing & export trading | Intl. IT services | Marketing & research |
| How soon can you invoice Clients\sign sales contracts? | 1 week | 3 weeks | 3 months | 3 weeks | 4 weeks | 4 weeks |
| How soon can you hire staff? | 1 week | 3 weeks | 3 weeks | 3 weeks | 4 weeks | 4 weeks |
| How soon can you sign a lease agreement? | 1 week | 1 week | 1 week | 1 week | 2 weeks | 1 week |
| How long to supply corporate bank account numbers? | 2 months | 2 months | 5 months | 2 months | 2 months | 2 months |
| How long to supply company registration/tax numbers? | 1 week | 3 weeks | 3 months | 3 weeks | 4 weeks | 4 weeks |
| Corporate tax rate on annual net profits? | 15% | 0% | 0% | 0% | 0% | None |
| Limited liability entity? | Yes | Yes | Yes | Yes | Yes | No |
| Government grants and tax incentives available? | Yes | Yes | Yes | Yes | Yes | No |
| Government approval required for foreign owners? | No | No | No | No | No | No |
| Resident legal representative required? | No | No | No | Yes | No | Yes |
| minimum paid up share capital? | US$1 | US$1 | US$100,000 | US$100,000 | US$1 | None |
| Can bid for Government contracts? | Yes | Yes | Yes | Yes | Yes | No |
| Corporate bank account location? | Bank of Georgia | VTB | Liberty Bank | Peoples Bank | VTB | TBC Bank |
| Can secure trade finance? | Yes | Yes | Yes | Yes | No | No |
| Legally tax exempt if properly structured? | No | Yes | Yes | Yes | Yes | No |
| VAT payable on sales to local customers? | 18% | 18% | 18% | 0% | 0% | Cannot trade |
| Average total business set up engagement costs? | US$11,650 | US$18,150 | US$32,550 | US$17,030 | US$12,150 | US$11,200 |
| Average total engagement period? | 2 months | 2 months | 5 months | 2 months | 3 months | 3 months |
| Accounting and tax considerations | Tax resident LLC | International Trading LLC | Intl. Finance Company | Free zone LLC | Virtual IT Zone Company | Representative office |
|---|---|---|---|---|---|---|
| Statutory corporate tax payable? | 15% | 0% | 0% | 0% | 0% | None |
| VAT payable on sales to local customers | 18% | 0% | 18% | 0% | 0% | Cannot trade |
| Withholding tax on payments to overseas shareholders? | 5% | 5% | 5% | 5% | 5% | 5% |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes | Yes |
| Monthly VAT reporting to the Government? | Yes | Yes | Yes | Yes | Yes | Yes |
| Social contribution tax? | 2% | 2% | 2% | 2% | 2% | 2% |
| Access to double taxation treaties? | Yes | Yes | Yes | Yes | Yes | Yes |
| This entity enjoys Government incentives? | Yes | Yes | Yes | Yes | Yes | Yes |
| Legally tax-exempt entity? | No | Yes | Yes | Yes | Yes | No |
| Company Registration | Tax resident LLC | International Trading LLC | Intl. Finance Company | Free zone LLC | Virtual IT Zone Company | Representative office |
| Minimum number of shareholders/partners? | 1 | 1 | 1 | Parent company | 1 | 1 |
| Minimum number of directors/managers? | 1 | 1 | 1 | 1 | 1 | 1 |
| Minimum paid up share capital? | US$1 | US$1 | US$100,000 | US$1 | US$1 | N/A |
| Shareholder and Director documents must be translated? | Yes | Yes | Yes | Yes | Yes | Yes |
| Shareholder and Director documents must be apostilled? | Yes | Yes | Yes | Yes | Yes | Yes |
| Foreign director must obtain work permit? | Yes | Yes | Yes | Yes | Yes | Yes |
| Shelf companies available? | Yes | Yes | Yes | Yes | Yes | Yes |
| Time to incorporate a new entity? | 2 weeks | 3 weeks | 2 months | 3 weeks | 4 weeks | 4 weeks |
| Can easily convert to a local PLC company? | Yes | No | No | No | No | No |
| This entity will likely be regulated by? | Ministry of Finance | Ministry of Finance | Ministry of Finance | Ministry of Finance | Ministry of Finance | Ministry of Finance |
| Business Considerations | Tax resident LLC | International Trading LLC | Intl. Finance Company | Free zone LLC | Virtual IT Zone Company | Representative office |
| Can invoice local customers? | Yes | No | No | Yes | Yes | No |
| Can hire local staff? | Yes | Yes | Yes | Yes | Yes | Yes |
| Can rent local office space? | Yes | Yes | Yes | Yes | Yes | Yes |
| Can secure resident visa for business owner? | Yes | Yes | Yes | Yes | Yes | Yes |
| Monthly VAT reporting to the Government? | Yes |
| Maximum number of staff allowed? | No maximum limit |
| Our Client must travel to Georgia? | No |
| Can be wholly foreign owned? | Yes |
| Maximum shareholding for foreigners? | 100% |
| Govt. approval required for foreign owners? | No |
| Temp. physical office solutions available? | Yes |
| You need local resident as bank signatory? | No |
| Withholding tax on payments to shareholders? | 5% |
| Must appoint an auditor? | Yes |
| Dividends received are legally tax exempt? | No |
| Security deposit to be kept with Government? | No |
| Must sign an office lease agreement? | No |
| S.holder/director docs attested? | Yes |
| Foreign non-resident director needs a work permit? | No |
| S.holder/director docs translated? | No |
| Expatriate to local staff ratio? | Depends on business activity |
| Other useful information | |
| Georgia has signed free trade agreements? | Yes |
| Georgia is a member of WIPO/TRIPS? | Yes |
| Georgia is a member of the ICSID? | Yes |
| Average customs duties suffered? | 0-12% |
| Average monthly office rent? (US$/sq m) | 35 |
| Minimum statutory annual salary? | US$7,1 for private and US$125 for government sectors |
| Average US$ salary for local skilled staff? | US$425 |
| Overseas remittance currency controls? | None |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Moderate |
Georgia business setup summary
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Advantages and disadvantages
Advantages of Georgia company registration
- Georgia has one of the world’s freest economies, and has made particular progress in the last year with upholding the rule of law;
- The World Bank ranks Georgia the world’s 7th easiest place to do business. Georgia companies:
- only need one shareholder and one director, and they can be any nationality;
- do not require any minimum paid up capital deposit;
- can be registered in just two weeks, without our Client’s travel;
- have low company annual maintenance fees.
- The country has an attractive tax system and a network of tax-free zones;
- Georgia is ideally located for Clients wishing to expand into Russia and the Caucasus regions;
- Georgia is located on China’s ‘One Belt, One Road’ route. This is likely to lead to massive new investments in infrastructure such as roads, railways and ports, facilitating trade and opening new business opportunities;
- Georgia has free trade agreements with the European Union, CIS counties, Turkey, United Kingdom, Ukraine, China and Hong Kong;
- Georgia is a signatory to the General Schemes of Preference, giving manufacturers preferential access to sell products in the United States, Canada and Japan;
- Georgia has signed double taxation avoidance treaties with 56 countries including India, Germany, China, and the United Kingdom, Singapore, Ireland;
- Georgia is a low-cost base:
- With low electricity costs of just 4 cents per kWh, it is an ideal manufacturing hub;
- With a deep talent pool and an average monthly wage of just US$425, it is a cost-competitive location for start-ups;
- Georgia is not a member of the Common Reporting Standards network. Information about foreign investors, beneficial owners and bank account holders is not shared with global governments and tax authorities;
- Georgia has a liberal, pro-business work visa policy for investors.
Disadvantages of Georgia company registration
- Georgia has a tense relationship with Russia since a regional war in 2008. The Caucasus is vulnerable to conflict in future;
- The standard of living in Georgia is low, with about 20% of the population living below the poverty line. Consequently, foreign entrepreneurs relocating to Georgia can find it challenging to adapt to the environment.
Best uses of a Georgian company
- Georgian international trading companies and international financial companies are tax efficient solutions for Clients with international operations. Such companies can benefit from complete corporate tax exemption on their worldwide income;
- Clients that wish to explore the Russian market, can consider setting up their operations in Georgia as the country allows easy access to Russia and offers several tax advantages for local companies.
Company registration
- Time to incorporate: Four weeks
- Cost to set up: US$11,650
- Minimum capital: US$1
- Physical office required: Yes
Required appointments
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
Key facts
- Corporate tax rate: 15%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: LLC
