Welcome to the business-friendly landscape of Georgia, where entrepreneurship thrives and opportunities abound. Whether you’re an ambitious businessperson seeking new horizons or an established entrepreneur looking to expand, Georgia offers a strategic gateway for growth and prosperity.
Embarking on the journey of establishing a company in Georgia opens doors to a thriving economy with a rich history and diverse culture. As a haven for innovation and business development, Georgia boasts a welcoming environment that fosters growth and success.
PopulationThe current total population in Georgia is approximately 3.7 million (2021, World Bank).
| Country |
Georgia |
| Language |
The most spoken languages in Georgia are Georgian (87.6%), Russian (6.2%), Azerbaijani (3.9%), and Armenian (1.2%). |
| Time in Georgia |
Georgia is in the GMT+4 time zone. |
| Currency |
(GEL, GEO) |
| Religion |
The most professed religion in Georgia is Orthodox Christianity (83.4%), followed by Muslim (10.7%), Armenian Apostolic Church (2.9%), and other religions (3%). |
| Tax regime |
The tax regime in Georgia offers competitive rates, with income tax ranging from 0% to 20%. |
| VAT |
VAT is not provided in Georgia. |
| Overage salary |
The average salary in Georgia is around 1,100 GEL per month (2021, GeoStat). |
| Types of incorporations |
Types of companies in Georgia: Limited Liability Company (LLC), Joint Stock Company (JSC), General Partnership (GP), Limited Partnership (LP), Cooperative (COOP) |
Why opening a company in Georgia
Opening a company in Georgia offers a strategic advantage for entrepreneurs seeking favorable fiscal options and a supportive business environment. The country’s streamlined bureaucracy, low tax rates, and progressive regulations make it an ideal destination for business expansion and innovation.
Advantages
- Business-Friendly Environment: Georgia is known for its pro-business stance. The state government has various initiatives to support businesses, both big and small.
- Low Cost of Doing Business: Relative to other states, Georgia generally has lower property costs, competitive labor costs, and beneficial utility rates, making it economically attractive for entrepreneurs.
- Skilled Workforce: Georgia boasts a large, skilled workforce, particularly in sectors like logistics, IT, film, energy, and advanced manufacturing. Georgia Tech, University of Georgia, and other institutions provide a steady stream of qualified professionals.
- Strategic Location: Located at a transportation crossroad in the southeastern U.S., Georgia is a logistical hub, with the Port of Savannah, a major international airport in Atlanta, and a dense highway and railway system.
- Tax Incentives: Georgia offers a range of tax credits for businesses, including credits for job creation, R&D, and investment in certain sectors.
- Diverse Economy: From agriculture to technology, Georgia’s diverse economy means there are opportunities across various sectors.
- Supportive Infrastructure: The state has invested in top-tier infrastructure to support businesses, like broadband expansion and transportation facilities.
Disadvantages
- Competition: Due to its business-friendly environment, many companies are headquartered or have significant operations in Georgia, leading to high competition in certain sectors.
- Regulations: While Georgia is pro-business, entrepreneurs still need to navigate various state and local regulations, permits, and licenses.
- Weather Concerns: Georgia can be prone to severe weather, including hurricanes, tornadoes, and occasional floods. This can lead to disruptions in business operations.
- Seasonal Variations: Some businesses, particularly those dependent on tourism or agriculture, might face seasonal fluctuations in revenue.
- Workforce Limitations: Despite having a large pool of skilled workers, competition for top talent, especially in tech and specialized industries, can be fierce.
- Cultural Considerations: For international entrepreneurs, it’s important to understand and navigate the cultural nuances and local business etiquettes.
Company types in Georgia
Georgia offers various types of company formations, each catering to different business needs and structures. Here are some of the most common company types along with detailed information:
Limited Liability Company (LLC)
An LLC is a flexible and widely chosen option for entrepreneurs. It provides limited liability protection for shareholders, who are typically not personally liable for the company’s debts. LLCs have a simple management structure and can be owned by both individuals and legal entities. They require a minimum of one shareholder and one director, who can be the same person. An LLC can be formed with relatively low costs and doesn’t have a specific minimum share capital requirement. The corporate income tax rate for LLCs is 15%.
| Type |
Cost of Incorporation |
Minimum Share Capital |
Taxes |
| LLC |
Varies |
No minimum |
15% corporate income tax |
Joint Stock Company (JSC)
A JSC is a suitable option for larger-scale businesses and those seeking public fundraising. It can issue shares to the public and raise capital through the stock market. A JSC must have at least one shareholder, and the shares can be freely transferred. The minimum registered capital requirement for a JSC is 50,000 GEL. The company is managed by a board of directors and is subject to a 5% corporate income tax.
| Type |
Cost of Incorporation |
Minimum Share Capital |
Taxes |
| JSC |
Varies |
50,000 GEL |
5% corporate income tax |
General Partnership (GP)
A GP is suitable for businesses where partners wish to jointly manage the company. Partners have unlimited liability for the company’s debts, and the partnership is not a separate legal entity. GPs are formed based on partnership agreements and don’t require a minimum capital. Partnerships are subject to personal income tax based on profit distribution.
| Type |
Cost of Incorporation |
Minimum Share Capital |
Taxes |
| GP |
Varies |
No minimum |
Personal income tax |
Limited Partnership (LP)
LPs are similar to GPs but consist of general partners with unlimited liability and limited partners with liability limited to their contributions. Limited partners cannot actively participate in the company’s management. LPs are established based on partnership agreements and don’t have a minimum share capital requirement. They are subject to personal income tax based on profit distribution.
| Type |
Cost of Incorporation |
Minimum Share Capital |
Taxes |
| LP |
Varies |
No minimum |
Personal income tax |
Cooperative (COOP)
Cooperatives are formed by individuals or legal entities to pursue common economic, social, or cultural interests. Members have limited liability, and decision-making is based on democratic principles. Cooperatives can engage in various activities and are subject to applicable taxation based on the activity they undertake.
| Type |
Cost of Incorporation |
Minimum Share Capital |
Taxes |
| COOP |
Varies |
No minimum |
Varies based on activity |
VAT in Georgia
VAT is not provided in Georgia.
Common questions
How to register a company in Georgia?
Registering a company in Georgia involves several steps. First, choose the type of company you want to form, such as an LLC or JSC. Prepare the necessary documents, including the company’s articles of association and registration application. Once your documents are ready, submit them to the National Agency of Public Registry. You’ll receive a tax identification number (TIN) and can then register for VAT if necessary. It’s recommended to seek legal guidance or engage with a business consultant to ensure accurate and timely registration.
What are the company registration fees in Georgia?
The company registration fees in Georgia vary based on the type of company and its share capital. For example, registering an LLC with a minimum share capital may have lower fees compared to registering a JSC with a higher share capital requirement. It’s advisable to consult the official fee schedule provided by the National Agency of Public Registry to get accurate and up-to-date information.
What documents are required for company registration?
Documents required for company registration include the company’s articles of association, registration application, copies of shareholders’ and directors’ identification documents, proof of address, and any additional documents specific to the chosen company type. If the documents are not in Georgian, you may need to provide notarized translations. Ensure that all documents are accurate and properly prepared to expedite the registration process.
How long does it take to incorporate a company in Georgia?
The timeline for incorporating a company in Georgia can vary depending on factors such as the type of company, completeness of documentation, and the workload of the relevant authorities. In general, the process can take a few days to a couple of weeks. Working with experienced legal professionals or consultants can help ensure a smoother and quicker incorporation process.
What are the corporate tax rates in Georgia?
Georgia offers a competitive flat corporate income tax rate of 15%. This rate applies to most types of businesses, including LLCs and JSCs. The tax regime is designed to attract investment and foster economic growth. Moreover, Georgia has signed double taxation treaties with various countries to prevent the double taxation of income and provide further incentives for international business activities.
Can foreigners own a company in Georgia?
Yes, foreigners can own and operate companies in Georgia. The country encourages foreign investment and provides a favorable environment for foreign entrepreneurs. Non-resident individuals or legal entities can establish companies, own property, and engage in various business activities. Having a clear understanding of local regulations and seeking legal advice can help ensure a successful foreign investment venture.
What is the minimum share capital requirement for company registration?
The minimum share capital requirement varies based on the type of company. For example, an LLC does not have a specific minimum share capital requirement, while a JSC must have a minimum registered capital of 50,000 GEL. It’s important to note that the share capital requirement can influence the type of business activities the company can undertake and its credibility in the market.
What are the accounting and reporting requirements for companies in Georgia?
Companies in Georgia are required to maintain accurate accounting records and prepare financial statements annually. Annual financial statements must be submitted to the Revenue Service, and companies may be subject to audits based on their size and activity. Compliance with accounting and reporting standards is crucial to ensure transparency, legal compliance, and a positive reputation in the business community.
Are there any incentives for foreign investors in Georgia?
Yes, Georgia offers various incentives to attract foreign investors. These incentives may include preferential tax treatment, simplified administrative procedures, and support for specific industries or regions. The government’s ongoing efforts to improve the investment climate and provide a welcoming environment for foreign investors make Georgia an attractive destination for international business activities.
How to obtain a business license in Georgia?
The process of obtaining a business license in Georgia varies depending on the nature of the business. Some businesses may require specific permits or licenses from relevant government agencies. It’s important to research and identify the specific licensing requirements for your industry and business activities. Consulting with legal experts or business advisors can help navigate the licensing process efficiently.
What is the procedure for hiring employees in Georgia?
Hiring employees in Georgia involves several steps to ensure compliance with labor laws and create a harmonious working environment. Below is a comprehensive overview of the procedure:
- Employment Contract:
When hiring an employee, the first step is to prepare an employment contract. This contract outlines the terms and conditions of employment, including job responsibilities, working hours, compensation, benefits, and other relevant details. The contract should be clear and transparent, providing a solid foundation for the employment relationship.
- Registering Employees:
After finalizing the employment contract, you need to register the employee with the Social Service Agency (SSA). This registration process helps the government keep track of the workforce and assigns a unique Personal Identification Number (PIN) to each employee. The PIN is essential for various administrative purposes, including tax calculations and social security contributions.
- Providing Benefits:
Georgia’s labor laws require employers to provide certain benefits to employees, including paid leave, health insurance, and social security coverage. Ensure that you understand the legal requirements for benefits and provide them accordingly.
- Minimum Wage Compliance:
As an employer, you must adhere to the minimum wage regulations set by the government. The minimum wage varies based on factors such as location and job category. Make sure the compensation offered to your employees meets or exceeds the minimum wage standards.
- Working Hour Limits:
Georgia’s labor laws stipulate maximum working hours to prevent employee exploitation. The standard working week is 40 hours, and any additional hours are considered overtime. Overtime work requires higher compensation rates.
- Workplace Safety and Health:
Creating a safe and healthy work environment is a legal obligation for employers. Adhere to safety regulations, provide necessary training, and implement safety measures to protect employees from workplace hazards.
- Termination Procedures:
In the unfortunate event that an employee needs to be terminated, it’s crucial to follow proper termination procedures. Provide adequate notice and adhere to termination rules outlined in the employment contract and labor laws.
- Legal Compliance:
Throughout the hiring process and during the employment period, ensure strict adherence to labor laws, tax regulations, and other relevant legal requirements. Failure to comply with these regulations can result in penalties and legal complications.
- Taxation and Social Security:
Deduct income tax and social security contributions from employees’ salaries and remit them to the appropriate authorities. These deductions contribute to employees’ social security benefits and overall taxation obligations.
- Employee Handbook:
While not a legal requirement, providing employees with an employee handbook can help set clear expectations and guidelines for behavior, policies, and procedures within the workplace. This handbook can also address grievance procedures and dispute resolution mechanisms.
- Professional Assistance:
Given the intricacies of labor laws and regulations, consider seeking professional assistance from legal experts or HR consultants. Their expertise can guide you through the complexities of employee hiring, management, and compliance.
