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Are you considering doing business in Georgia? This dynamic country offers numerous advantages, including simplified registration processes and attractive tax benefits. However, navigating the legal complexities and cultural nuances of the region can be a real challenge. Here’s how Gegidze Agency can help you navigate these challenges and thrive in Georgia's promising business environment.
Georgia: A Developing Business Hub with Simplified Registration & Tax Benefits
Georgia's business environment is promising, but understanding cultural norms and legal complexities is essential. Gegidze Agency provides guidance on every aspect of doing business here, ensuring you can take full advantage of Georgia’s relaxed tax rates, simplified business registration, and strategic location.
Navigating the Business Landscape in Georgia: Cultural Nuances & Legal Complexities
Beyond these advantages, the legal complexities and cultural nuances of the region remain a significant challenge in doing business in Georgia. Most business is conducted in Georgian, and official laws and regulations are also written in Georgian. According to the International Trade Administration, consulting a lawyer licensed to practice in Georgia is highly recommended before engaging in substantial business transactions.
Why move to Georgia?
Georgia offers one of the most affordable residency by investment programs in Europe, starting at just 300,000 euros.
In the first quarter (Q1) of 2019, Georgia attracted over 281 million USD in foreign direct investment (FDI).
During this period, the services, financial sector, and transport sector received significant investments, attracting 139.8 million USD, 42.7 million USD, and 28.6 million USD in FDIs, respectively.
The leading investors in Q1 2019 were Ireland, contributing 47.7%, the UK with 15.1%, and the USA with 8% of the total FDIs.
Lawyers in Georgia: Comprehensive Legal Services by Gegidze Agency
Gegidze Agency boasts a team of experienced lawyers in Georgia who specialize in various fields of law. We provide comprehensive legal services to meet all your business and personal legal needs, ensuring you have expert guidance at every step.
Registering a Company in Georgia with Gegidze Agency
Setting up a company in Georgia offers numerous benefits, but it requires careful navigation of the registration process. Gegidze Agency provides end-to-end support in registering your company, from selecting the best business structure to managing all necessary legal documentation.
Choosing the Right Business Structure in Georgia: A Breakdown for Foreign Investors
Before launching a successful business in Georgia, it’s essential for entrepreneurs to understand various business structures.
There are six primary organizational structures in Georgia, Each has unique liabilities and taxation structures (Get to know taxes in Georgia), five hold legal recognition.
Business Structures in Georgia
Limited Liability Company (LLC): A type of business entity that frees its owners from personal responsibility for their company obligations and debts and protects personal assets for its owners (members).
Joint Stock Company (JSC): A legal entity owned by investors, with capital distributed according to the amount invested. The company's charter specifies the number and type of shares. Ideal for businesses looking to raise funds through the public issuance of shares.
Joint Liability Company: Company is formed by two or more individuals who are collectively responsible for the company's debts with all of their assets.y. Shares responsibility for company debts among its members.
Commandite Company: A limited liability corporation is formed by two or more individuals to run a business enterprise under a joint trade name. Similar to a joint-stock company, but with two distinct partner categories: general partners with full liability and limited partners with liability restricted to their investment.
Cooperative: Owned and democratically controlled by its members, focusing on shared benefits rather than maximizing profits.
Besides that, there is an option for individuals to register as an entrepreneur.
The rules for registering a company and other related matters are outlined in the Law on Entrepreneurs.
Company Incorporation: Partner with Gegidze Agency
Gegidze Agency not only helps businesses choose the right format that suits the company's needs, but also effectively manages filling out documentation and guarantees adherence to local regulations.
Business structure: since there are different ways for launching business in Georgia such as LLC or corporation, Gegidze agency assists business owners in choosing the right structure that meets the company's needs.
Paperwork: Besides less bureaucracy in Georgia, registering a new company requires filling out forms, but official laws and rules are written in Georgian, which makes it hard for business owners to navigate in this process. Here comes Gegidze to handle all paperwork according to Georgian law.
Bank account: opening a business involves a bank account for the company. Gegidze helps in choosing a bank and make opening the account easier
Taxes: Taxes can be complicated and a real headache for business owners. Gegidze can offer advice on how to plan your taxes strategically.
Legal stuff: Gegidze with a top-notch experts team can give legal advice like a lawyer starting from choosing business structure to relocation.
Note: get to know your company's true worth for strategic selling, mergers, acquisitions and financing.
How to register as an individual Entrepreneur in Georgia?
Registering as an Individual Entrepreneur (IE) (the lowest taxes: 1% tax) in Georgia is a fairly straightforward process. Here's a breakdown of the steps involved. There are some criterias that Entrepreneur should meet before registering as an IE in Georgia:
Solo owner of the business;
Have a business activity that falls outside the list of prohibited activities;
Not exceed an annual income of GEL 500,000 (around USD 200,000);
IE registration process:
Gathering documentation: Passport, defined business activities, legal business address (owned property or written consent), Georgian phone number, and email address.
Visiting a Public Service Hall: here entrepreneur submits application in person or appoints someone to register on behalf with a notarized power of attorney (translated to Georgian)
Complete the application: The application requires personal information, business activities, and contact details.
Registration fee: The fee is minimal.
registration confirmation: This typically takes one business day.
International company status in Georgia: Legally Reduced Taxes
In order to improve Georgia's business environment, attract international companies, and, in essence, turn Georgia into a regional hub, the Georgian government allows to obtain international company status for international companies to benefit from tax breaks.
While a regular company pays 15% for corporate income tax, with applying IT international company status business pays only 5%.
What is IT international company status
According to the Georgian Tax Code, an international company is a Georgian-based enterprise that engages in activities specified by the Georgian Government and generates income solely from approved operations.
Businesses, whether Georgian or non-Georgian enterprises, operating in IT services like software development, web stuff, or computer game development, as long as they register as Georgian enterprises, have a Georgian office, and operate in the Georgian market, have the possibility of attaining international company status in Georgia and benefiting from the low taxation.
Who can attain International company status in Georgia
There are certain criteria which must be met by businesses to qualify for International Company Status (ICS) like eligible activities (IT services, software development, web stuff, or computer game development); two years of operating experience in IT sector; income - businesses must derive over 98% of their income from qualifying IT activities conducted outside of Georgia
How to get International company status in Georgia: Partner with Gegidze Agency
Businesses seeking International Company status navigating complex procedures, such as analyzing documentation; qualifying the required two years of experience in the IT sector; handling all the details for qualifying IT activities outside of Georgia, etc.
Here comes the Gegidze agency and goes to all the processes, ensuring a smooth launch and compliance of businesses with Georgian regulations.
With a reliable legal partner like the Gegidze, companies can maximize tax benefits within the framework of Georgian law while simultaneously minimizing liability.
How does it work:
Registration & Setup: Gegidze assists with company registration in Georgia and offers full services such as application completion, submission of essential papers, and coordination with relevant authorities.
Strategic Tax Optimization: The agency maximizes tax benefits by providing assistance on tax structures, managing tax return files, and assuring lowest tax responsibility while remaining compliant.
Banking & Financial Support: Gegidze simplifies opening a corporate bank account in Georgia, which can be a challenge for foreign businesses.
Legal & Compliance Assistance: The agency’s legal specialists guide businesses on Georgian regulations concerning IT International Companies.
What is virtual zone status in Georgia
Virtual zone status in Georgia is a specific tax break for IT companies operating internationally. Businesses with this status have major tax advantages, including: 0% corporate tax; 0% VAT; 5% capital gains tax on dividends; and no annual license fees.
Business In order to benefit from the “legally reduced” taxes, going through pretty complicated processes, and in reality, it’s not quite as straightforward as it seems.
Besides that, if the company is eligible to get virtual zone status, it can enjoy a real tax haven in Georgia .
Let’s break into the topic:
Who can Get Virtual Zone Status (VZP)?
There are some criterias that must be met by the company so as to attain virtual zone company (VZP) status.
IT company: business must be connected to software development; web services IT support; design and production of IT systems.
Business registration: company (legal entity) must be officially registered in Georgia;
International Businesses: The company services or products should be provided to foreign, non-resident clients
Physical presence: business should have local connection to Georgia (typically it’s small office with Georgian employees)
Contact information: Businesses ought to have Georgian phone numbers and bank account for revenue service purposes.
Step-by-Step guide How to Get Virtual Zone Status (VZP)
The process of registration for virtual zone company (VZP) status involves the following steps:
Company registration (two working days);
Registering entities with the Revenue Service and its online portal (one working day);
Application of the digital Virtual Zone at http://newzone.mof.ge/ (it takes approximately ten working days to process application)
Clarification of the business model, services and products, local staff contracts, and other documentation can be requested. (minimum ten working days)
Open a Branch vs. a Subsidiary in Georgia: Expert Advice from Gegidze Agency
Choosing between a branch and a subsidiary is a crucial decision for businesses expanding into Georgia. Gegidze Agency offers expert advice on the benefits and legal implications of each option, helping you make the best choice for your business strategy.
Feature | Branch | Subsidiary |
Legal entity | Not a separate legal entity | Separate legal entity |
Formation process | Simpler | More complex |
Management | Controlled by the parent company | Independent management |
Liability | Parent company is liable for the branch's debts | Subsidiary is only liable for its own debts |
Taxation | Taxed on its worldwide income | Taxed on its Georgian income |
Repatriation of profits | Profits can be easily repatriated | Profits can be subject to withholding taxes |
Control | Parent company has full control | Parent company has less control |
Brand recognition | Maintains the parent company's brand | Can develop its own brand |
Apostille and Notary Legalization Services in Georgia
Legal documents often require apostille and notary services for international use. Gegidze Agency provides efficient apostille and notary legalization services in Georgia, ensuring your documents meet all necessary standards for global recognition.
What is the Difference Between Apostille and Legalization?
The difference between an apostille and legalization lies in the complexity and steps involved in the document authentication process. An apostille, governed by the Hague Convention, offers a streamlined, one-step certification process for documents intended for use in member countries. Legalization, on the other hand, is a more intricate, multi-step procedure required for countries that are not part of the Hague Convention.
Obtaining an Apostille in Georgia
In Georgia, the Public Service Hall and the Ministry of Justice are the primary institutions for obtaining an apostille. Here's how you can proceed:
Where to Apostille
The Public Service Hall and the Ministry of Justice offer apostille services. The appropriate location depends on the type of document you need to be authenticated.
Process Overview
To get an apostille in Georgia, you can submit your document either online or in person. The process is straightforward:
Submit the Document: Determine whether your document should go to the Public Service Hall or the Ministry of Justice.
Service Options: Choose a service level based on your urgency—options range from one business day to eight business days.
Open a Bank Account in Georgia
Investing in Georgia, starting a business venture, or managing your finances while living there? Opening a Georgian bank account is essential for seamless financial operations. Here’s why it’s a smart move:
Why Open a Georgian Bank Account?
Comprehensive Internet Banking - Benefit from advanced online banking features that allow you to manage your finances anytime, anywhere, ensuring convenience and accessibility.
Seamless Transactions - Pay bills, transfer money, and shop with ease using a local Georgian bank, making your daily transactions smooth and efficient.
Investment Opportunities - Tap into the growing Georgian market, leveraging local banking to facilitate investments and financial growth.
Business Friendly - Essential for entrepreneurs and companies, a Georgian bank account supports business operations, from payroll management to supplier payments.
Stability - Georgia's banking sector is known for its sound regulations, providing a stable and secure environment for your money.
Eligibility for Foreigners
Georgia welcomes non-residents to open bank accounts, providing access to a range of financial services. Generally, you will need:
Passport: Valid proof of identity.
Proof of Georgian Address: A utility bill, lease agreement, or similar document.
Income Source: Information on how you’ll be funding the account.
Residence Permit (If Applicable): Simplifies the process and increases approval chances.
Georgian Translation Services by Gegidze Agency
Challenges of Georgian Legal Translation
Translating legal documents into Georgian presents unique challenges that require specialized expertise.
Complex Grammar - The Georgian language features intricate verb systems, case markings, and an agglutinative structure, which means that a word-for-word translation approach often results in significant errors. Mastery of these grammatical nuances is essential to ensure accuracy and precision in legal texts.
Evolving Terminology - Like any dynamic legal system, Georgian legal language continuously evolves. This evolution demands that specialized translators stay current with new legal terms and precedents to provide up-to-date and reliable translations.
Limited Resources - Compared to more widely spoken languages, finding qualified Georgian legal translators can be challenging. This scarcity highlights the importance of partnering with an experienced and reputable provider who can guarantee quality and consistency.
Choosing the Right Georgian Legal Translation Partner
Selecting the right translation partner is crucial for ensuring the integrity and confidentiality of your legal documents.
Credentials - Seek translators who specialize in legal translation and ideally have experience in your specific industry. Their expertise will ensure that the translations are not only accurate but also contextually appropriate.
Security Protocols - Verify the translation provider’s data protection measures and confidentiality policies. Ensuring that your sensitive information is secure should be a top priority.
Reputation - Look for a provider with a proven track record and positive client references. A reputable partner will have demonstrated their ability to deliver high-quality translations consistently.
Responsiveness - Legal matters are often time-sensitive. Choose a partner who prioritizes communication and can meet your deadlines reliably, ensuring that your legal processes remain on track.
The Importance of Human Touch in Legal Translation
Legal translation is more than just converting words from one language to another; it’s about capturing the full meaning and context.
Nuances - Effective translation captures the subtle meanings and cultural references that literal translations often miss. This is particularly important in legal documents, where precision and context are paramount.
Expertise - Specialized terminology in legal contracts, medical documents, or industry-specific jargon requires a deep understanding and expertise. A professional translator can navigate these complexities, ensuring the translated text retains its original intent and legal validity.
Trust - When dealing with sensitive information, from business plans to personal records, trust in your translation provider is crucial. Knowing that your documents are in safe and competent hands provides peace of mind and assurance of confidentiality.
Start Your Journey with Gegidze Agency
In the dynamic business environment of Georgia, having a reliable and experienced partner is crucial. Gegidze Agency offers unparalleled expertise and comprehensive services to help your business thrive. Contact us today to discover how we can support your business goals and ensure your success in the Georgian market.
Optimize Your Business Operations with Gegidze Agency
From legal services and business structuring to tax optimization and immigration support, Gegidze Agency is your trusted partner in Georgia and the Caucasus region. Our commitment to excellence and client satisfaction makes us the ideal choice for businesses looking to succeed in this vibrant market.
Ready to take the next step? Reach out to Gegidze Agency and let us help you navigate the complexities of the Georgian legal system with confidence and ease.
Frequently Asked Questions (FAQs)
Why Choose Gegidze?
Experience: Our team has a deep understanding of Georgian law and business practices.
Comprehensive Solutions: We offer a wide range of services to support every aspect of your business.
Client-Focused: We prioritize your needs and goals, tailoring our services to your specific situation.
Proven Results: Our track record speaks for itself – we deliver successful outcomes.