Entering a new sales market is a long process, which consists of several stages, such as: collecting information about the market of interest, analyzing the information received, assessing the feasibility of entering this market, then searching for potential partners, collecting information about them, conducting preliminary negotiations, the conclusion of a contract.
All these stages are quite laborious and costly, they include a lengthy collection of information, numerous phone calls, and repeated flights, and knowledge of the language and specifics of the market of interest is also often required.
Setting up a company in Georgia: business benefits
The jurisdiction provides several advantages when setting up a Georgian company:
- Globally, Georgia stands out as one of the countries with the simplest registration procedures.
- According to the 2019 Index of Economic Freedom, this jurisdiction is ranked 16th in terms of economic stability, ahead of Sweden and Germany.
- It is possible to register a company in the industrial zone of Georgia, where certain tax benefits are provided (depending on the activities of your organization).
- Low commissions when registering a business in Georgia.
- The country’s location between Europe and Asia makes it an important transit route for goods delivered to and from two continents.
- This state has signed agreements for the avoidance of double taxation (DTA) with more than 50 countries, including the UK, Germany, India, and China.
- Special tax incentives are provided when registering an international trading company in Georgia or setting up a Georgian financial company.
The process of establishing a company in Georgia
Before starting to operate in this jurisdiction, you must log in to the National Public Registry Agency. To register a business in the Republic of Georgia, you need:
Prepare a statement indicating:
- company name;
- type of company;
- goals and corporate objectives;
- registered address;
- data of shareholders;
- information about the authorized capital;
- data of each member of the management board and supervisory board.
This application must be signed and notarized.
- Prepare the Articles of Association of the company.
- Confirm that representatives of the firm are not subject to punishment for property violations.
- Provide documents on the appointment of directors and board members.
After submitting these documents, together with confirmation of payment of the registration fee, the company will receive an identification number, a certificate of state status, and a tax registration number. After that, you will be able to open a corporate account in a Georgian bank.
Some business areas require a special license in Georgia, in particular, this concerns strategic areas and registration of the gambling business in Georgia.
Registration of a company in the Republic of Georgia: available OPF
Before setting up a business in Georgia, check out the available legal types of companies:
- limited liability company (LLC);
- full/limited partnership;
- Joint-Stock Company;
- individual entrepreneur;
- subsidiary division;
- international trading company.
Registration of a Georgian company is available for both residents and non-residents (except for setting up a private enterprise in Georgia). The purchase of a ready-made company in Georgia is available.
Starting a business in Georgia: other forms of companies
Entrepreneurs can open a joint-stock company (JSC) in Georgia. Such a business structure has capital divided into shares owned either by the founders or by third parties (through the purchase of shares on the market). JSC can issue both common and preferred shares. Their owner can freely transfer shares without the consent of other shareholders. Partners or members are not personally liable for company losses. JSC’s liability to creditors is limited to all of its assets. JSC registration in Georgia is considered the preferred option for complex projects requiring significant investment. They are also suitable for launching an IPO project in Georgia.
Registration of a special trading company (STC) in Georgia offering financial services to foreign clients allows you to receive full exemption from corporate income tax on all income associated with the sale of services and securities to clients of other countries if the income from foreign sources exceeds 90% of their total income … The creation of an international financial company in the Republic of Georgia is permitted outside the free trade zone. To obtain STC status in Georgia, a company must:
- obtain a Georgian license for financial services;
- submit a request to the Revenue Service of that country.
Georgian international financial companies are attractive for providing offshore financial services to clients around the world.
A foreign enterprise can open a branch in Georgia, which is not a legal entity. The business activities of the Georgian branch are limited to the volume of operations determined by the parent firm. Such a legal entity must appoint a representative resident in that country to oversee the activities of the branch. Registration of a branch in Georgia is considered the preferred option for foreign banks that want to expand their activities in this state and consolidate profits.
It is also possible to create a representative office in Georgia. His activity is to study the Georgian market.
If you want to create your own business in Georgia, you should initially familiarize yourself with the tax policy of this state. VAT – 18%. The corporate income tax rate is 15%. Excise duty applies to certain categories of goods.
When registering a new company in Georgia, emphasize that dividends are subject to 5% tax (both for legal entities and non-resident individuals). Imported goods are subject to tax duties depending on the type of product: 0%, 5%, and 12%.