Articles
Company Register in Georgia
Updated on Thursday 12th March 2020based on 6 reviews
Foreign businessmen who want to open a company in Georgia can select one of the company types that are prescribed under the country’s national legislation. The investors may choose between companies with limited liability, joint stock companies or partnerships. The partnerships that can be set up in Georgia are available as limited partnerships or general partnerships. Also, foreign companies may enter the local market by opening a subsidiary or a branch office and our team of specialists in company registration in Georgia can provide in-depth assistance on these business structures.
How can an investor register a Georgian company?
All the Georgian legal entities must be registered with the National Agency of the Public Registry (Georgia company register) subordinated to the Ministry of Justice in Georgia. The National Agency of the Public Registry falls under the supervision on the Ministry of Justice. Georgia company register was set up under the Law of Georgia on State Registry, which was adopted in this country on 1st of June 2004.
The Public Registry is responsible for the registration functions and tax services (front office), official property registrations, taxes on property, movable and immovable property, entrepreneurs and non-entrepreneurs (non-commercial) legal persons, geodesy and cartography. The main ideas sit on the foundation of a centralized registration system; Georgia company register performs a coordinated activity with customers and partners.
Investors can request more information on the procedures that have to be followed when registering with the National Agency of the Public Registry (NAPR) from our team of specialists in Georgian company formation; our consultants can provide step-to-step advice in matters concerning the registration of a local business, but they can also assist on the formalities of registering a property with the institution.
The registration of the companies is based on a signed and notarized application. The application must include a set of information, such as the name of the company, the type of company, its address, the purposes for which it was set up as well as the following:
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• date of starting the business and a notarized copy of the company’s statutory documents;
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• providing information on the founder of the company (name, address, place of birth and the profession),
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• the amount of share capital and details regarding the contribution of each partner;
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• documents regarding each member of the supervisory board and management board.
The application must be accompanied by the charter of company, the documents showing the value of the contributions made in kind, a proof from the Information Center of the Ministry of Internal Affairs that the persons appointed to represent the company are not subject to penalty for proprietary offences, the documents of appointment of the directors and members of the councils.
If necessary, all the documents must be accompanied by the notarized and legalized translation into Georgian. A registration fee must be paid before the company is registered in the Entrepreneurial Register. After submitting all the above mentioned documents along with the proof of registration fee payment, the company will receive an identification number and a certificate of state and a tax registration; our team of specialists in company formation in Georgia can provide more details related to this matter.
The fee ranges from GEL 100 in the situation of the standard registration, but the investors may opt for a faster registration, in which case they will have to pay a fee of GEL 200. The last step before starting the actual economical activity is opening a bank account. The registration with the Georgia company register lasts 1-2 days.
Documents to be submitted with the Georgia company register when starting a business
In the above section, we have added a short presentation on the basic documents an investor should submit with the Georgia company register when opening a company in Georgia. However, the list of documents and procedures that have to be followed is more complex, depending on the type of company selected for registration. Below, we present some of the basic steps that have to be concluded when opening a Georgian limited liability company, which is a common way to start a business here:
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• investors must pay a fee of GEL 100 or GEL 200 (for the standard or expedited registration procedures) with the NAPR;
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• the company has to be registered with the Entrepreneurial Register, a procedure which is done through the NAPR;
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• the company must obtain an identification number and a certificate of state and tax registration;
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• the company must also register for value added tax and for these procedures, specific documents have to be submitted;
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• investors must prepare a certified application for registration and a certified memorandum of association;
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• it is also necessary to add to the file the certified consent of the owner of the premises where the business carries its operations, which states that the premises can be used as the company’s official business address.
Besides these, Georgia company register expects investors to offer additional information; the full list of the information that must be disclosed with the institution can be presented by our team of consultants in company registration in Georgia. However, it is necessary to find out that businessmen have to provide additional contact information (e-mail address and a separate address, different from the one where the company develops its activities).
One of the aspects that have to be completed during the procedure of company formation in Georgia is to set up a corporate bank account. According to the Georgian legislation, investors can deal with this procedure during the registration of the company with the Georgia company register.
What is the basic data one should know on the Georgia company register?
The National Agency of the Public Registry (NAPR) represents a government agency, which, in Georgian, is named Sajaro Reestris Erovnuli Saagento. The agency is located in Tbilisi, the capital city of Georgia, and, besides the above mentioned responsibilities, the institution in is charge with matters such as: satellite imagery, aerial photography or thematic mapping. Other basic data regarding this institution is presented below:
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• the National Agency of the Public Registry in Georgia was set up in 2004;
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• the Georgia company register has a staff that is formed of 1,370 persons;
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• the annual budget the institution receives is EUR 10.2 million;
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• in 2017, it implemented a reform on land registrations, which had a positive effect on the number of properties registered with the institution;
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• up until 2017, the institution had more than 400,000 land plots registered in its database;
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• at the level of 2017, the institution had 783 dispute cases regarding local properties that were resolved through mediation.
Why register a Georgian limited liability company?
A limited liability company (LLC) is formed by maximum 50 shareholders and the capital is divided into shares. The advantage of a Georgian LLC is given by the fact that the investors will be liable for the company’s debts only to the amount of the shares they own in the company. The shares are freely transferable and the members of the company are not allowed to withdraw. Other characteristics of the LLC are the following:
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• it is the most common type of business registered in Georgia, preferred by both foreign and local businessmen;
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• the LLC can be set up by natural persons, but legal entities are also allowed to register this business form;
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• the share capital of the LLC is divided into shares and the investors can’t issue additional shares;
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• the registration of this business form can last approximately two weeks.
Can foreigners access the data stored by the Georgia company register?
One of the legal matters that are handled through the Georgia company register is the registration of a property. Most of the data stored by the institution is available for the general public, but such information is limited only to specific aspects. Starting with 2015, the institution allows foreigners to verify various information on the Georgian properties; our team of specialists in company registration in Georgia can assist with more information on the procedures for purchasing or renting real estate properties in this country.
This was a direct consequence of the fact that the Georgia company register became part of the European Land Information Services Association (EULIS). The latter represents an organization that offers reliable information on the European properties, but only to its subscribed customers, which are represented by entities such as banks, lawyers, real estate agents and others.
How to check information from the Georgia company register?
The information registered in the National Agency of the Public Registry of Georgia may be checked online, through the Public Service Hall. The information may be requested on the basis of a standard application (filled in front of the officer) and an ID copy. Also a fee payment is requested. This fee depends on the number of days allowed to release the information. Usually the longest term is four days.
The information regarding the registration of the companies is public, but in certain cases, specific information is considered confidential, such as the state secrets or personal information considered confidential by the Georgian legislation. Foreign investors who want more information about the Public Registry may contact our company formation agents in Georgia.
What are other popular business forms in Georgia?
The joint stock companies are business forms with the capital divided into shares with equal nominal value and this type of legal entity can be registered with more than 50 members. The members of the joint stock companies have the responsibilities limited to the nominal value of their shares and it is important to know that the investors of this type of company may issue additional shares.
A general partnership in Georgia can be incorporated by minimum two partners, who have equal liability for the company’s profits and losses. They both have decisional powers. In the case of a limited liability partnership in Georgia it is also necessary to associate at least two partners, with the difference that one will have the quality of a general partner, while the other will be a limited partner. The general partner carries the full responsibility for the company’s debts and incomes, unlike the limited partner who has limited responsibilities in extend of his/her contribution to the company’s capital.
Furthermore, foreign investors can operate on the local market through a branch office, which is a type of company that is managed and controlled by the foreign company abroad. In this case, the parent company is held responsible for any debts and financial difficulties related to the branch office registered in Georgia.
The branch office does not represent a legal entity in itself, as it is just a sub-division of the parent company. One of the advantages of opening a branch office in this country refers to the fact that the investors will have lower initial costs related to the registration of this type of entity. When opening a company in Georgia as a branch office, the following steps will have to be concluded:
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• provide a decision of the parent company related to the registration of a branch office in Georgia;
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• provide the parent company’s statutory documents and a proof regarding that the parent company is a registered entity in its country of origin;
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• a decision which states the name of the appointed director of the branch office or of any other legal representative which has the right to represent the office in Georgia;
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• an evidence regarding the company’s registered address in Georgia;
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• the identification documents of the branch’s appointed director and an evidence regarding the payment of the registration fee.
How can an investor open a bank account in Georgia?
As mentioned earlier, it is necessary to open a corporate bank account for a newly formed business, this being one of the compulsory steps of the procedure of company formation in Georgia. This procedure can be completed in only one day, in the situation in which the investors have prepared the necessary documents. Some of the important aspects related to the registration of a corporate bank account are presented below:
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• the procedure will incur the payment of a small fee, which ranges from GEL 10 to GEL 100, depending on the fees established by each commercial bank;
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• the investors will need to provide the company’s tax registration certificate;
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• it is also necessary to provide copies of the identification documents of all the persons that can represent the company;
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• it is also compulsory to offer a signature sample of the company’s director.
What are the main VAT obligations in Georgia?
Any company that develops commercial activities in Georgia is required to pay the value added tax (VAT), unless the service or the product provided by the company is exempted from this type of tax. The tax regulations in Georgia stipulate that a local business has to register for VAT purposes once the company’s annual revenues are of minimum GEL 100,000.
Are there any tax incentives for Georgian based companies?
Yes, companies in Georgia can obtain a set of tax incentives, including for trading matters. It is necessary to know that Georgia benefits from several regions which provide a special tax treatment, known as free zones, more exactly, free industrial zones. Our team of specialists in company registration in Georgia can assist with in-depth advice on how to start a business in the country’s free zones and can provide advice on the types of business activities that are accepted in such special regions.
Thus, persons who are interested in starting the procedure of company formation in Georgia can obtain relevant tax deductions if they set up their businesses in the regions of Tbilisi, the capital city, and the cities of Kutaisi and Poti (the latter being a seaport).
One of the main advantages of opening a company in Georgia in its free zones refers to the tax exemptions that can be obtained by local and international businesses. For example, in the country’s free zones several taxes do not apply, as it is the case for the corporate income tax or on the taxes on trading; also, companies can benefit from lower value added tax rates.
Amongst the types of activities that can be developed in such regions we mention the following: consulting activities, financial activities, manufacturing or construction; our representatives can offer more information on other tax incentives and benefits that can be obtained when conducting a business in these free zones.
Who can start a sole trader in Georgia?
Another way to start a business in Georgia is by opening a sole trader (known as individual entrepreneur). The sole trader represents the simplest way to open a company in Georgia and it is recommended for small businesses. The main characteristic of the sole trader is that the company is represented by a single founder, who develops a business activity in his or her name.
The downsize of the type of business form is given by the fact that the owner of the company is personally responsible with his or her own assets in the situation in which the company has any financial difficulties, as there is no distinction between the owner and the company; the sole trader can also be registered by foreigners.
Information regarding the Georgian economy
Georgia is situated in a strategic area, connecting Asia to Europe, and this offers the country a competitive advantage - it is seen as a desirable location for foreign investors. The well developed infrastructure helps the import and export of goods all over the world.
Georgia is also known for its various reforms made in all the sectors, in its attempt to attract foreign investments. The financial system is encouraging - even though in 2004 there were 21 taxes, the number of them has decreased to only six. The VAT is imposed at a rate of 18%, the corporate tax rate is established at a rate of 15% and dividends distributed by a company are subject to a 5% dividend tax rate.
Another reason why the investors are interested in opening companies in Georgia is the simplified registration procedure of a business. The process of registration of a new company doesn’t take longer than two days, as mentioned above, but the entire registration process can take longer, if we consider the registration with the local institutions, obtaining specific business permits and other necessary steps.
The Georgian workforce is well trained and the country is situated on the 1st place in the world in the Adult Literacy Rate indicator (with a rate of 100%). The country also benefits from a young workforce and this can provide numerous advantages to foreign businessmen who are seeking to expand on this market.
For more details regarding the registration of a company in Georgia, we invite you to contact our specialists in company formation, who can offer further information on any aspect concerning the registration procedure. Investors may also request assistance on the tax regulations applicable to a specific business structure.
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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