Company Registration in Georgia: A Comprehensive Guide
Georgia, nestled in the Caucasus region, has emerged as a strategic hub for international business, offering a favorable tax regime, simplified registration processes, and a growing economy. For entrepreneurs and investors eyeing this dynamic market, understanding the intricacies of company registration is crucial. This guide provides a detailed, step-by-step walkthrough of the process, addressing legal requirements, procedural nuances, and strategic considerations.
Why Register a Company in Georgia?
Before diving into the registration process, it’s essential to understand why Georgia is an attractive jurisdiction for business incorporation. Georgia ranks 12th globally in the World Bank’s Ease of Doing Business 2020 report, boasting:
- Flat Tax Rate: A 5% tax on distributed profits for small businesses and 15% corporate income tax.
- Simplified Regulatory Framework: Minimal bureaucracy and online registration systems.
- Strategic Location: A gateway to European and Asian markets.
- Free Trade Agreements: Access to the EU, CIS, China, and other key markets.
Types of Business Entities in Georgia
Georgia offers several legal structures for business registration. The most common are:
Limited Liability Company (LLC):
- Minimum Capital: No minimum requirement.
- Liability: Limited to the company’s assets.
- Ideal For: Small to medium-sized businesses.
- Minimum Capital: No minimum requirement.
Joint Stock Company (JSC):
- Minimum Capital: GEL 50,000 (approximately USD 18,000).
- Liability: Limited to shares held.
- Ideal For: Large enterprises planning to raise capital publicly.
- Minimum Capital: GEL 50,000 (approximately USD 18,000).
Branch Office:
- Liability: Parent company is fully liable.
- Ideal For: Foreign companies testing the Georgian market.
- Liability: Parent company is fully liable.
Representative Office:
- Liability: Cannot engage in profit-generating activities.
- Ideal For: Marketing or liaison purposes.
- Liability: Cannot engage in profit-generating activities.
Step-by-Step Registration Process
Step 1: Choose a Unique Company Name
- Requirements: The name must be unique and not resemble existing entities.
- Verification: Check availability via the National Agency of Public Registry (NAPR) online portal.
- Reservation: Reserve the name for up to 3 months.
Step 2: Prepare Required Documents
- Charter (Articles of Association): Outlines the company’s purpose, structure, and shareholder rights.
- Passport Copies: Certified copies of all founders/shareholders.
- Power of Attorney: If using a representative for registration.
- Address Proof: A lease agreement or ownership document for the registered office in Georgia.
Step 3: Submit Application to the NAPR
- Online Submission: Via the E-Business Registration System (www.businessregister.ge).
- Fees: Approximately GEL 100-200 (USD 35-70), depending on the entity type.
- Processing Time: Typically 1-3 business days.
Step 4: Obtain Tax Identification Number (TIN)
- Automatic Issuance: TIN is assigned upon registration.
- Tax Residency: Companies registered in Georgia are considered tax residents.
Step 5: Open a Corporate Bank Account
- Required Documents: Registration certificate, TIN, and passport copies.
- Banks: TBC Bank, Bank of Georgia, and Liberty Bank are popular choices.
- Currency: Accounts can be opened in GEL, USD, or EUR.
Step 6: Register for Social Security and Employment
- Mandatory: If hiring employees, register with the Social Service Agency within 10 days of employment.
Tax and Compliance Obligations
| Tax Type | Rate | Notes |
|---|---|---|
| Corporate Income Tax | 15% | Only on distributed profits. |
| Value Added Tax (VAT) | 18% | Applies to goods/services exceeding GEL 100,000 annual turnover. |
| Dividend Tax | 5% | For non-resident shareholders. |
Special Economic Zones (SEZs)
Georgia offers 8 SEZs with additional incentives:
- Tax Exemptions: 0% corporate tax, import/export duties.
- Sectors: Manufacturing, logistics, and technology.
- Example: The Kutaisi SEZ is popular for manufacturing due to its proximity to the Black Sea port.
Common Challenges and Solutions
Language Barrier:
- Solution: Hire a local translator or attorney fluent in Georgian and English.
- Solution: Hire a local translator or attorney fluent in Georgian and English.
Bank Account Opening:
- Solution: Provide a detailed business plan and source of funds documentation.
- Solution: Provide a detailed business plan and source of funds documentation.
Regulatory Changes:
- Solution: Subscribe to updates from the Georgian Revenue Service and NAPR.
- Solution: Subscribe to updates from the Georgian Revenue Service and NAPR.
FAQ Section
Can a foreigner own 100% of a Georgian company?
+Yes, Georgia allows 100% foreign ownership with no restrictions on profit repatriation.
What is the minimum capital requirement for an LLC?
+There is no minimum capital requirement for an LLC in Georgia.
How long does company registration take?
+The process typically takes 1-3 business days, provided all documents are in order.
Are there annual reporting requirements?
+Yes, companies must submit annual financial statements and tax returns.
Can I register a company remotely?
+Yes, registration can be done remotely using a power of attorney for a local representative.
Conclusion
Registering a company in Georgia is a straightforward process, thanks to its streamlined regulatory framework and digital systems. However, navigating local nuances—such as language requirements and banking procedures—requires careful planning. By leveraging Georgia’s tax incentives, strategic location, and business-friendly policies, entrepreneurs can establish a robust foothold in this emerging market.
This guide serves as a foundational resource, but consulting with legal and financial professionals is recommended for tailored advice.
