Georgia Financial Services companies in 2024

Since 2003, Healy Consultants assists multi-national Clients establish low tax financial services companies, regulated by the National Bank of Georgia including insurance, asset management, forex and securities brokerage, commodity trading and other services. Financial companies benefit from liberal policies and a lax regulatory framework in Georgia.

• Georgia Forex Exchange (FX) Licence

  • A Georgian LLC with a forex regulatory licence is attractive to multi-national Clients because:
    • If properly structured, the Georgian LLC will be legally tax exempt;
    • The Georgian company does not need a local director nor local employees but a lease agreement of at least US$2,500 per year for a local office is required;
    • Within 3 months, Healy Consultants Group will secure forex regulatory licence approval for our Client;
    • The minimum paid up share capital is approximately US$156,000, to be deposited to the Georgian multi-currency corporate bank account within 12 months of regulatory licence approval. The paid-up share capital can be used to pay for operational costs including rent and salaries and lawyers and accountants fees;
    • For a total business set up cost of approximately US$ 19,600, our Client should expect to legally conduct their forex business within five months of engaging Healy Consultants Group;
    • A Georgian LLC will be liable to pay 18% VAT for local payments only, no VAT applies to transactions carried out with foreign entities;
    • Georgia has adapted certain parts of European regulations and legislation but has kept its own local laws to protect the domestic financial industry and avoid over-regulation;
    • Georgia registration is common among new brokers because it is easier to pull in clients from Europe and Russia.
  • A Georgian LLC with an FX regulatory licence is not attractive to some multi-national Clients because:
    • The annual fees to maintain the Georgian forex LLC is approx. US$ 17,500 including i) Government regulatory licence fees of US$6,000, ii) Healy Consultants Group fees of US$ 3,950, iii) approximate lawyers and accountants fees of US$ 4,950 and iv) lease agreement of US$2,500;
    • To keep the Georgian Central Bank happy, we recommend our Client appoint a Georgian resident AML officer, to regularly communicate with them. Our Client should budget for annual fees of US$24,000 for this professional service;
    • Our Client needs to hire a Georgia certified accountant to fulfil accounting and monthly reporting requirements to the Central Bank in the Georgian language;
    • Our Client will require annual independent statutory audit for the Georgia FX company;
    • Over the past year Georgian banks have become reluctant to open corporate accounts for local companies with foreign beneficial owners. To increase the account opening success, we recommend our Client keep the corporate structure simple.
  • A Georgian LLC with an FX licence is allowed to provide local and international foreign exchange brokerage services. Permitted activities under the FX licence include:
    • providing direct consultations to investors/clients on investments, including securities pricing, securities investment, buying/selling of securities, as well as related FX transactions;
    • consulting on securities issuance and money raising services;
    • arranging and carrying-out distribution of issuer’s securities on a non-guaranteed basis;
    • receiving and transmitting client orders related to securities, and effecting securities transactions for client accounts with client funds;
    • managing client investment portfolios;
    • implementing research related to financial instruments;
    • holding client investment funds and/or securities, providing safekeeping, custody and nominee services for securities.

• Georgia Asset Management Licenses

  • A Georgian LLC with an asset management licence is attractive to some multi-national Clients because:
    • It is a less complicated licence compared to the Georgia FX Licence;
    • there is no paid-up capital requirement;
    • licence approval can be secured within 40 to 50 days;
    • there are fewer monthly reporting requirements and limited substance requirements;
    • the licence holder does not require a fully equipped office in Georgia, nor a resident compliance officer;
    • Customers of our Client’s asset management entity enjoy maximum privacy as no regulated or automated data exchange of account holder or subscriber data is required;
  • Drawbacks of a Georgia asset management licence include:
    • within 12 months of the licence being granted, holders must prove to the Central Bank that the company holds approximately US$ 250,000 in customer funds under mandate;
    • the director of the company is required to be present in Georgia for 14 days per month. Healy Consultants will be happy to provide resident director services if required by our Client.
  • A Georgia Asset Management licence is suitable for companies managing funds, taking customer deposits and trading on their customers’ behalf. Permitted activities include:
    • taking third-party deposits, managing client investment portfolios, receiving and transmitting client orders, effecting securities transactions, proprietary trading and engaging in short selling;
    • providing financial advice to clients on investments, including i) issues concerning securities pricing ii) securities investments iii) buying/selling of securities and iv) foreign exchange transactions;
    • consulting on securities’ issuance and raising capital;
    • distribution of issuer’s securities on both non-guaranteed and guaranteed basis;
    • providing custodian and nominee services;
    • loaning securities to and borrowing securities from clients.

• Georgia Insurance Licence

  • A Georgian LLC with an Insurance Licence is attractive to some multi-national Clients because:
    • It covers multiple activities including:
      • life insurance;
      • non-life insurance (auto, property, health, accident, travel, disaster, mortgage);
      • reinsurance.
    • The licence fee for each activity is equal to 500 GEL (approximately US$160).
  • A Georgian LLC with an Insurance Licence is not attractive to some multi-national Clients because:
    • The minimum paid-up capital is:
      • Life insurance: 7.2 million GEL (approximately US$2.35 million);
      • Insurance (non-life), except compulsory form of liability insurance, suretyship and credit liability insurance: 4.8 million GEL (approximately US$1.5 million);
      • Insurance (non-life) compulsory form of liability insurance, including suretyship and credit liability insurance: 7.2 million GEL (approximately US$2.35 million);
      • Reinsurance: 7.2 million GEL (approximately US$2.35 million).
    • Our Client must present evidence of paid-up capital in the form of a certificate of deposit issued by any Georgian bank.

• Georgia Electronic Money Institution (EMI) Licence

  • A Georgian LLC with an EMI licence is attractive to some multi-national Clients because:
    • The founders of the company can be resident or non-resident;
    • Payment service providers are regulated by directly the Central Bank, which also issues licences to Georgian LLC and JSC financial institutions;
    • EMI Licenced companies are required to maintain a legal registered office address in Georgia though it can maintain a physical office outside of Georgia. However, it should:
      • keep and submit accounting and tax reporting to the Department of Revenue of Georgia;
      • keep financial records, and be audited annually by a Georgian audit firm;
      • notify the National Bank of Georgia of any internal restructuring, cessation of activities, commencement of bankruptcy proceedings or other circumstances affecting the nature of the activity.
  • A Georgian LLC with an EMI licence is not attractive to some multi-national Clients because:
    • Our Client must deposit the authorised capital amount of 250,000 GEL (approximately US$ 78,000) in full into a Georgian bank before filing the application. After the EMI licence is issued, the share capital must be maintained throughout the entire period of activity;
    • At least one director must be present in Georgia for 14 days per month. Healy Consultants will be happy to provide resident director services if required;
    • The Georgia e-money licence is limited to the domestic market. To supply international services authorisation is required from relevant regulators in each country.
  • Permitted activities under the EMI License include:
    • deposit and receipt of electronic money from third parties;
    • transfer of money on behalf of third parties;
    • issuing of debit cards/ electronic money;
    • opening merchant accounts to receive and forward payments;
    • conversion of electronic money into virtual money like Bitcoin, etc;
    • offering payment services to third parties.

• Georgia International Financial Company (IFC) License

  • A Georgian LLC with an IFC licence is attractive to some multi-national Clients because:
    • The Georgia IFC licence is issued directly by the Ministry of Finance;
    • It is not mandatory to hold any kind of additional licence from the Central Bank provided operations are conducted internationally and not in Georgia;
    • There are no share capital requirements or audit requirements, though the company must submit annual tax return;
    • The following is exempt from IFC corporate income tax:
      • profits from financial transactions and/or financial services and/or the sale of securities derived by a non-Georgian resident;
      • profits from the sale of securities;
      • profits derived by an investment fund from provision of financial instruments and/or from financial transactions and/or financial services, provided an investment fund is an IFC;
      • providing financial services to non-Georgian citizens.
    • Already licenced entities from the Central Bank (like PSPs or brokerages) can apply for an IFC licence, but that would mean they pledge not to receive more than 10% of their total income from Georgian sources.
  • A Georgian LLC with an IFC licence is not attractive to some multi-national Clients because:
    • A Georgian LLC obtains an IFC licence to conduct business outside Georgia, and the company must be established outside a free industrial zone;
    • A Georgian IFC company cannot generate more than 10% of its revenues from Georgia-resident individuals/entities. 90% must come from non-resident individuals/entities.
  • Permitted activities under the IFC Licence include:
    • Offshore Asset Management;
    • Brokerage and FX trading;
    • Cryptocurrency crowdfunding possibilities;
    • E-money and Credit Card processing;
    • Portfolio management services;
    • Cryptocurrency Exchange and Trading;
    • Initial Coin Offerings (ICO);
    • International Investment advice.

• Why set up financial companies in Georgia?

  • Georgia offers one of the most liberal banking and e-money processing laws worldwide, especially in on-boarding foreign customers and payment flows and is one of the world’s easiest places to do business;
  • Georgian regulators require minimal substance requirements such as office space, resident directors and local staff. Therefore, there are very low on-going costs in Georgia;
  • Georgia imposes no controls on foreign ownership of companies. Any legal or natural person, or foreigner, can own a Georgian company;
  • Georgia is a full member of MONEYVAL, an FATF-Styled Regional Body (FSRB), and must fulfil the same actions for money laundering and terrorism finance prevention as FATF;
  • Georgia’s location is geo-strategically perfect to establish a business and connect Asia to Europe/America. It also has an excellent reputation as a modern financial marketplace from which to serve offshore clients.