There are many forms a business can take in Georgia, but the most popular one isthelimited liability company. Along with this, an investor may choose to open a joint stock company or can create a partnership (general or limited). Regardless of the company type selected by the investors, our team of consultants in company registration in Georgiacan provide legal assistance on the incorporation of any of the Georgian legal entities.
What are the main legal entities available in Georgia?
The commercial legislation prescribes a wide range of business forms that can be found in countries across the world. The main legal act which prescribes the types of Georgian business forms is the Law of Georgia on Entrepreneurs; this act stipulates the fact that foreign businessmen have the same rights of establishing a business form as the local investors. The main types of companies that can be set up here and which can be presented on an extensive basis by our team of specialists in company registration in Georgia are the following:
•the joint stock company – incorporated by large companies operating in Georgia;
•the limited liability company – the most suitable business form available for small and medium-sized companies;
•the general partnership – it is formed by at least two partners, one who has limited liability and the other one who has full liability for the company’s debts;
•the limited partnership – all the partners bear the same level of responsibility towards the company’s debts;
•the cooperative – it is set up with the purpose of increasing the members’ profits and to represent their business interests;
•the individual enterprise – addressed only to natural persons who want to develop an individual business.
Beside these business forms, the legislation in Georgia also prescribes the possibility of opening a branch office or a subsidiary. The branch office does not represent a separate legal entity, as it is considered a sub-division of the parent company; in the case of a subsidiary, it must be incorporated under one of the business entities available here (generally, it is set up as a limited liability company).
Abusiness in Georgia may also be set up through a joint venture. The joint venture is generally designed for infrastructure projects or other similar, large investments and it is formed through the association of at least two entities, with the purpose of accomplishing a specific business task. Once the company accomplished its business objective, the joint venture will be closed down.
Incorporation of a limited liability company in Georgia
A limited liability company is formed by at least one shareholder and maximum 50. The capital is divided into shares and each shareholder has the rights limited by the value of his/her shares. The members are not personally liable for the company’s debts and this is why this company type represents one of the most common ways to start a business here.
The number of directors is not limited; a company of this type can be managed by several directors. All daily decisions are taken by the director or by a board of directors and the major decisions are taken by the general meeting of the shareholders. If a director is causing damages to the shareholders, than he/she is personally liable for the losses.
No minimum share capital is required for this type of company; however, an authorized capital is necessary before starting the business. The members are free to choose an amount for the capital. The registration of a limited liability company in Georgia doesn’t take longer than two days.
Formation of a joint stock company in Georgia
A joint stock companyin Georgia is usually a company that has its shares registered at the Georgian Stock Exchange. It can be registered by one founder and the shareholders are not personally liable for the company’s debts.
There is no minimum share capital, but it must have an authorized capital, decided by the shareholders. It is not necessary to pay the contribution at the time of registration. Also the contributions in kind are possible. If the number of shareholders exceeds 50 members, they have to be registered by an independent register, if not, the evidence is kept by the company itself.
All the major decisions are taken by the general meeting of the shareholders, but every daily decisions are taken by a director or a board of directors. A supervisory board is appointed if the shares are registered at the stock market, if the number of shareholders exceeds 100 members or if it is licensed by the Financial Monitoring Agency. The minimum number of members of the supervisory board is four and the maximum number is 21.
Types of partnerships in Georgia
A general partnership is based on an agreement between two or more partners, performing business under the same name, personally liable for the debts and incomes of the partnership. All the partners may take management decisions; our team of specialists in company formation in Georgia can provide more information on the Georgian partnerships.
A limited partnership is formed by two or more persons with different roles in a company: there is a general partner (who has unlimited liability) and there is the silent partner (his or her liability is limited in the extend of his contribution). Only the general partners are entitled to take any management decisions. Please note that a partnership can also be liable for VAT registration in Georgia.
We invite you to watch a short video about the types of companies you can open in Georgia:
What should an investor know on the registration process in Georgia?
The procedure for opening a company in Georgia is not too complex and it follows the same steps that can be found in other jurisdictions. For this purpose, the investors should prepare a set of documents that have to be verified by the local authorities. Some of the main aspects involved in the registration of a company in Georgia are the following:
•notarizing various company documents following the Hague Convention (Georgia is a member state and documents can be authenticated through this option);
•obtaining specific business licenses and permits, depending on the company’s object of activity;
•submitting the company documents with the Public Registry of Georgia;
•foreign investors must also verify the conditions for obtaining a business visa or for residence permits;
•verify the necessary capital requirements, which can vary depending on the selected company type;
•provide the power of attorney to our team of consultants in company formation in Georgia, who can represent investors in a set of registration procedures.
Why start a business in Tbilisi, Georgia?
Investors can open a company in Georgia in numerous economic sectors. The country is open to foreign investments and it has modified its investment policies in order to attract foreign businesses on the local market. The country relies on several economic activities, such as the heavy industry, pharmaceutics, fashion, food and beverages and others. Besides these, Georgia is an attractive investment destination due to the following:
•at the level of 2018, it ranked as the 1st economy in Europe and Central Asia for doing business;
•regarding the same index, Georgia stood as the 9th economy at a global level;
•it is also the 9th European economy on the economic freedom index (and at a global level, the 16th);
•it also has some of the cheapest cities (3rd place at the level of Central Asia and the 11th at a global level);
•at the level of 2016, Tbilisi, the country’s capital city, had a workforce of more than 400,000 persons;
• the average salary paid by a company in Georgia to a local employee is of $450;
•in 2016, the city had more than 1 million visitors and out of these, more than 800,000 were represented by foreigners;
•from all the foreign visitors in Tbilisi, more than 270,000 visits were concluded for business purposes.
If you need assistance in choosing the type of company you will open, you may contact our agents incompany formation in Georgia. Our representatives can assist businessmen with advice on how to open a company in Georgia and can guide foreign businessmen in choosing a suitable company type, based on their available capital and investment plans.
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.