Georgia, located at the crossroads of Europe and Asia, has been recognized by the World Bank as the world's top reformer in terms of ease of doing business for two consecutive years. The country has a strategic location and a favorable business environment that encourages foreign investors to set up their businesses. Georgia has recently been attracting foreign investors due to its business-friendly environment. If you're interested in doing business in Georgia, this guide will help you understand the process of incorporating a company and opening a bank account.
Here are some reasons why Georgia is a great place to do business:
Strategic Location: Georgia's location at the crossroads of Europe and Asia makes it a perfect gateway to the markets of Europe, Asia and the Middle East. This strategic location provides access to over 1.5 billion consumers and a combined GDP of $45 trillion.
Liberal Business Environment: Georgia has one of the most liberal and business-friendly environments in the world.
Skilled Workforce: Georgia has a highly educated and skilled workforce with a strong work ethic. The country has a high literacy rate of 99% and over 60% of the population speaks English.
Low Costs: Georgia has one of the lowest costs of living and doing business in Europe. The country has a low tax burden, low labor costs, and affordable real estate prices.
Free Trade Agreements: Georgia has signed free trade agreements with the European Union, China, Turkey, and several other countries. These agreements provide businesses with access to new markets and reduced tariffs.
Investment Incentives: The Georgian government provides a number of incentives to foreign investors, including tax exemptions, grants, and subsidies. These incentives are designed to encourage investment and promote economic growth.
Infrastructure: Georgia has invested heavily in its infrastructure in recent years. The country has modern airports, seaports, and highways, making it easy to transport goods and people.
Tourism: Georgia is known for its rich history, culture, and natural beauty. The country has become a popular tourist destination, attracting millions of visitors every year. This has created new opportunities for businesses in the hospitality, transportation, and service industries.
Incorporating a Company in Georgia
The process of incorporating a company in Georgia is relatively straightforward and can be completed within one working day. Here are the requirements: Instrument of Incorporation The instrument of incorporation must be drawn up in written form and signed by all founding partners of the company. Brand Name The brand name of the company should be checked in advance to ensure that it is not similar to any other company's name. If the name is similar, it might be rejected. Legal Address A legal address for the company must be registered, and consent from the owner of the property must be provided. However, a virtual office option is also available. Identification Data The identification data of each partner/founder must be provided, including the first name, last name, residential address, and personal identification number. If a partner is a legal person, its brand name, legal address, and identification number should be provided. Administrative Fees The administrative fee for company registration is GEL 100 (around $32). The rapid registration service costs GEL 200 (around $64) if you want to complete the registration process on the same day of the application. If the registration document in English is required, an additional GEL 20 ($3.2) must be paid. Foreign Citizens Foreign citizens can be appointed as directors or representatives of Georgian entities without any special permit. A residence permit is not required for being appointed as a director/representative. However, it is necessary if the director/representative plans to permanently stay in Georgia. Directors There are no restrictions on who can be appointed as a director of an LLC in Georgia. An employment contract should be signed between the LLC and the manager in accordance with relevant conditions. Bank Account Opening After the company registration is confirmed, the director can apply to open a bank account. The most popular banks in Georgia are TBC Bank and Bank of Georgia. Here are the requirements: AML and KYC Forms Anti-Money Laundering (AML) and Know Your Customer (KYC) forms must be filled out. Documents Confirming Business Registration The application must include documents confirming business registration and a passport. Bank Review The bank will review the application, and the response will be sent to the applicant within several days. Taxes Georgia is known for its favorable tax regime, with low tax rates that make it an attractive destination for businesses. Here's a quick summary of the tax rates in Georgia: Value Added Tax (VAT): The standard VAT rate in Georgia is 18%. However, certain goods and services, such as basic food items, healthcare, and education, are exempt from VAT. A reduced VAT rate of 5% applies to specific goods and services, such as pharmaceuticals and medical equipment, as well as hotel accommodations and transportation services. Income Tax: The personal income tax rate in Georgia is a flat rate of 20%. This rate applies to both residents and non-residents who receive income in Georgia. In addition, in specific cases, there is no tax on income earned from foreign sources. Corporate Income Tax: The corporate income tax rate in Georgia is also a flat rate of 15%. This rate applies to both domestic and foreign companies operating in Georgia. However, dividends paid by a Georgian company to a non-resident are subject to a withholding tax rate of 5%. Property Tax: Property tax in Georgia is levied on the market value of the property at a rate of 0.1%. However, certain types of properties, such as agricultural land, are exempt from property tax. In addition to these taxes, Georgia also offers various tax incentives and exemptions to businesses, such as a 4-year tax holiday for companies operating in the Free Industrial Zones, as well as exemptions for certain types of investments and activities. It's important to note that tax laws and regulations in Georgia are subject to change. Therefore, it's recommended that businesses seek professional tax advice to ensure compliance with all applicable laws and regulations. Overall, Georgia offers a favorable business environment for companies looking to expand their operations. With its strategic location, skilled workforce, low costs, and investment incentives, it is an attractive destination for businesses seeking new opportunities. ____ Please note that this article is not written by a lawyer, the information provided in this article is for general guidance and informational purposes only, and should not be considered professional advice. It is subject to change without notice and may not be accurate or up-to-date. The regulations described in this article are based on the information available as of the knowledge cutoff date and may have changed since then. We strongly recommend consulting with a qualified professional for up-to-date and accurate advice on taxation and business incorporation in Georgia. We remind you that tax regulations and legal requirements can vary greatly depending on the specific circumstances of each case, and we strongly recommend seeking professional advice before making any decisions related to taxation or business incorporation in Georgia. GB and Partners Law Office is not liable for any direct or indirect damages arising from the use of or reliance on any information provided in this article. We do not guarantee the completeness, accuracy, or reliability of the information, and we do not accept any liability whatsoever for any loss or damage incurred in reliance upon it. #Georgia #DoingBusiness #IncorporatingACompany #BankAccount #Investment #Entrepreneurship #SmallBusiness #Economy #InternationalBusiness #ForeignInvestment #BusinessOpportunities GB & Partners Law Office T +995 557 21 72 41 Email: info@gbplo.com www.gbplo.com
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