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Accounting in Georgia
Updated on Tuesday 21st February 2023 Rate this article
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Investors who plan to start a business in Georgia will need the services of accountants in Georgia to conduct various financial procedures once they start operating the company in this country. The accounting requirements vary depending on the business form that was selected for incorporation.
Still, it must be observed that in the case of simpler business structures, such as the sole traders, the procedures for accounting in Georgia are very basic, and the number of accounting documents that must be maintained and submitted is reduced.
The investors interested in company formation in Georgia will need to comply with a set of accounting standards and audit procedures.
It is important to know that Georgian companies have to complete bookkeeping documents and financial records and our team of accountants in Georgia can assist on these procedures.
Accounting in Georgia - main services
Legal entities can perform their accounting duties by hiring accountants in Georgia who can manage such activities. At the same time, such companies can also request the assistance of our accountants for services as the ones presented below:
- bookkeeping;
- maintaining the company’s financial statements;
- preparing financial statements.
Our team of accountants in Georgia can assist foreign and local companies in maintaining the above mentioned documents in accordance with the applicable legislation, which is given by the Law on Accounting and Financial Audit.
Investors can also receive assistance in completing audit procedures as well. Audit services can be used for measuring the performance of a business in a given time. Furthermore, our services for accounting in Georgia also include professional assistance on mergers and acquisitions or company liquidation.
If you need accounting services in Croatia or other countries, we can put you in touch with our local partners. Our accountants in Georgia cooperate with other teams in different countries.
What are the reporting obligations of companies in Georgia?
All companies in Georgia that develop commercial activities, including legal structures that do not have as a main purpose the financial gain (as it can be the case on non-profit organization) must maintain financial documents.
This is required so that they can justify their financial situation and the ways in which the respective financial assets have been distributed/invested. Thus, all investors who will open a company in Georgia will need to maintain financial documents.
The manner in which this is done varies based on 2 main characteristics:
- the company type under which the investor develops a business activity in Georgia;
- the category in which the company is included, based on its financial situation.
According to the accounting legislation in Georgia, there are 4 main categories of companies, as per the regulations of the Law of Georgia on Accounting, Reporting and Audit.
These 4 categories of companies have different reporting obligations. While for all companies it is legally required to submit certain financial documents, for others, certain documents will become optional.
In the list below, our team of consultants in company registration in Georgia have prepared a short presentation regarding the main criteria applicable to the 4 categories of businesses:
- • the 1st category of companies refers to legal entities that have assets with a value above GEL 50 million, revenues above GEL 100 million and which hire more than 250 employees;
- • the 2nd category refers to businesses that have assets with a value of GEL 10-50 million, revenues of GEL 20-100 million and they hire minimum 51 employees and maximum 250;
- • the 3rd category of companies have assets with a value of GEL 1-10 million, revenues of GEL 2-20 million and they hire minimum 11 to maximum 50 employees.
- • the 4th category of companies is the one with assets of maximum GEL 1 million, assets of maximum GEL 2 million and with maximum 10 employees.
These characteristics are very important, as they will define the manner in which accounting in Georgia will be applied to a business.
Our accounting law firm in Georgia can, of course, provide in-depth details on all the accounting procedures that apply to a certain category.
It must be noted that if a company meets 2 out of the 3 criteria imposed for each category, then the procedures for accounting in Georgia will begin, meaning the obligation to report specific documents.
However, it is also important to know that for example, persons who operate an economic activity as sole traders and who, let’s say, would be included in the parameters of the 4th category, will not have to comply with the accounting procedures applicable to this category of businesses.
This applies solely to business structures in Georgia that are considered legal entities, which implies that they have a separate legal personality than the one of the shareholder, and this is not the case of a sole trader.
The procedures for accounting in Georgia will require companies to submit the following:
- the balance sheet.
- the profit and loss statement;
- the cash flow statement;
- the pdf versions of these documents, with the appropriate signatures.
Please mind that the 3rd document is optional for the 4th category of companies; our accounting firm in Georgia can present additional information.
Companies that are included in the 1st and the 2nd categories are required to submit the pdf versions of the financial documents with the signature of a company director. Also, for businesses that fall under the 1st and the 2nd categories, the audit procedure is required by law.
Georgian law for accounting procedures
The Law of Georgia for Accounting and Financial Audit provides the legislative framework related to the manner in which companies have to prepare and present the financial statements and keep company’s accounts.
The legislation for private entities stipulates that regulations for accounting procedures are also given by international accounting standards - such as IFRS, which are adopted by the International Accounting Standards Board.
Audit procedures are to be handled as mentioned by the Article 5 of the law, which states that they have to be performed following the requirements of the International Standards on Auditing.
Foreign businessmen are invited to contact our team of accountants in Georgia for in-depth advice on our accounting services.
When you will open a company in Georgia, you will need to maintain your financial documents in accordance with the international standards that have been adopted in this country.
Besides the IFRS, Georgia recognizes IFRS for Small and Medium-Sized Entities, as well as financial standards that are applicable to legal entities that were set up for non-commercial purposes.
As presented earlier in this article, certain companies will need to be audited. If you open a business in Georgia and you need to perform an audit, this procedure will be done in accordance with the International Standards of Audit.
This procedure must be done be accredited individuals or companies, who have expertise in carrying out complex accounting procedures.
Meet us in Tbilisi
Call us now at +995 595 11 88 22 to set up an appointment with Valeri Bendianishvili, one of our specialists in company formation in Tbilisi, Georgia. Alternatively you can incorporate your company without traveling to Georgia.
As a Business Setup Georgia LLC client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Georgia.
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