Georgia company registration

DOING BUSINESS IN GEORGIA IN 2018

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.

Summary table of Georgia company registration

Summary	Tax resident LLC	International Trading LLC	International Finance Company	Free zone LLC	Representative office
Also known as	LLC	Special trade company	International finance company	Free industrial zone company	Representative office
Best use of company?	All products and services	Trading with global Clients	Supplying financial services	Manufacturing and export trading	Marketing & research
How soon can you invoice Clients\sign sales contracts?	1 week	3 weeks	3 months	3 weeks	4 weeks
How soon can you hire staff?	1 week	3 weeks	3 weeks	3 weeks	4 weeks
How soon can you sign a lease agreement?	1 week	1 week	1 week	1 week	1 week
How long to supply corporate bank account numbers?	2 months	2 months	5 months	2 months	2 months
How long to supply company registration/tax numbers?	1 week	3 weeks	3 months	3 weeks	4 weeks
Corporate tax rate on annual net profits?	15%	0%	0%	0%	None
Limited liability entity?	Yes	Yes	Yes	Yes	No
Government grants and tax incentives available?	Yes	Yes	Yes	Yes	No
Government approval required for foreign owners?	No	No	No	No	No
Resident director/partner/manager/ legal representative required?	No	No	No	Yes	Yes
minimum paid up share capital?	US$1	US$1	US$100,000	US$100,000	None
Can bid for Government contracts?	Yes	Yes	Yes	Yes	No
Corporate bank account location?	Bank of Georgia	VTB	Liberty Bank	Peoples Bank	TBC Bank
Can secure trade finance?	Yes	Yes	Yes	Yes	No
VAT payable on sales to local customers?	18%	No local sales allowed.	No local sales allowed.	0%	Cannot trade
Average total business set up engagement costs?	US$11,500	US$18,150	US$32,550	US$17,030	US$11,200
Average total engagement period?	2 months	2 months	5 months	2 months	2 months

Georgia business setup summary

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Advantages and disadvantages
Advantages of Georgia company registration
1. It is possible to register a Georgia limited liability company with only one shareholder and one director, both of which can be foreigners and are not required to live in the country. Furthermore, there is no minimum paid up capital requirement;
2. It is easy to set up a business in Georgia because:
  - The country has fewer and simpler registration steps that most other Central Asian countries. Therefore, starting a business in the country can be done in a week;
  - The application is done with the National Agency of Public Registry, and can be done either by one of the shareholders or by a legal representative;
  - For the above reasons, the country is ranked 16^th in the Ease to do Business ranking by the World Bank.
3. Foreigners registering a company in Georgia can take advantage of the country’s beneficial tax regime, including:
  - Currently, the corporate tax rate is set at 15%, the 4^th lowest in Central Asia after Kyrgyzstan, Turkmenistan and Uzbekistan;
  - Companies are exempt from i) capital duty ii) social security contribution iii) payroll tax and iv) branch remittance tax;
  - Clients that wish to set up their companies in one of Georgia’s free trade zones, are exempt from i) corporate income tax ii) property tax and iii) VAT and import/export tax for certain products.
4. Furthermore, full exemption of corporate income tax on foreign source income may be granted to:
  - Trading companies with Georgian sourced income i) lower than US$420,000 or ii) 5% or their total custom value of the products traded with overseas customers;
  - Financial companies with foreign sourced income exceeding 90% of their total income.
5. Georgia’s location can offer our Clients the following advantages:
  - Georgia is both culturally similar and geographically near to Russia, optimal for Clients that wish to expand their activities in the country;
  - Georgia is one of the countries which China’s “One Belt, One Road” project will pass through. The planned railway will link the Asian country with the European continent. Investments in Georgia will be able to take advantage of such link.
6. Other benefits of investing in Georgia include:
  - Georgia has so far concluded 52 double taxation avoidance treaties with different countries including India, Germany, China, the United Kingdom, Singapore, Ireland among others;
  - The country was positively ranked as the 13^th freest economy in the Heritage Foundation’s 2017 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labor markets. A free labor market and minimal trade regulations were listed as the main reasons for Georgia’s high rank;
  - Due to low electricity costs of just 4 cents per kWh, Georgia has become the Eurasian go-to destination to register crypto-mining companies.
7. Georgia is a great country to get a talented pool of workers due to the following reasons:
  - Georgia is a country with abundance of quality labour that is affordable by the entrepreneurs;
  - The country has a top-ranked skill development, vocational education and training program namely, the OECD Eurasia Competitiveness Program that is offered by the OECD;
  - Georgia also benefits from the EU-Georgia Comprehensive Free Trade Agreement that allows Georgian companies to set up a subsidiary, a branch or a representative office in the EU. Moreover, EU companies can do the same in Georgia. Because of this, more jobs are being created in Georgia and citizens are directly benefiting from it.
Disadvantages of Georgia company registration
1. Clients that wish to produce for the domestic market are faced with several challenges, including:
  - Georgia has a total population of 3.5 million, the 2^nd lowest in Central Asia, just behind Armenia;
  - Georgia also has one of the lowest purchasing power of Central Asia; way below the medium for the European continent.
2. Georgia has a very tense relationship with Russia, due to:
  - Russia’s military occupies the regions of Abkhazia and South Ossetia in northern Georgia since the war in 2008 and considers them both independent territories under Russian control. Since Russia refuses to allow international interference, the issue continues to go unresolved;
  - Although the vast majority of gas is supplied by Azerbaijan, Georgia’s consumption of Russia gas, part of the supply chain to Armenia, is essential to maintain a diversified gas supply and to balance prices.
3. The standard of living in Georgia is quite low standard irrespective of the ongoing investments and developments. As of 2016, 21% of the population lived below the poverty line. This might be a major challenge for foreign entrepreneurs as they might find it difficult to adapt to the Georgian economy.
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 are exempt from corporate income tax in 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.