Among the available types of companies in Georgia,
the limited liability company
is the most popular legal entity selected by foreign investors in the country. The liability of the members of this type of company in Georgia
is limited only to the amount of their contributions and this is an important advantage and one of the reasons why entrepreneurs choose opening an LLC in Georgia.
The registration of a limited liability company in Georgia
(abbreviated LLC) usually takes a couple of days and the investors must follow a series of steps in order to legally incorporate the company. Our company formation agents in Georgia
can guide you through the incorporation procedure and help you open an LLC in Georgia.
What are the characteristics of a limited liability company in Georgia?
Businessmen who want to open a company in Georgia
as a limited liability company
should know that the main rules of law which apply to this business structure are the Civil Code
and the Law on Entrepreneurship
. Besides the fact that the shareholders benefit from limited liability
, which is limited to the share of their investment in the company, this company type is characterized by the following as well:
- • there aren’t any capital requirements imposed for opening an LLC in Georgia;
- • the company’s capital has to be divided into shares which can’t be offered to the general public;
- • the company’s founders (or founder) can be foreigners or local citizens;
- • the company can be set up by natural persons or by other legal entities;
- • the limited liability company in Georgia can be registered with only one director;
- • the details of the company’s shareholders and directors have to be made public;
- • it is legally required to have an official business address in Georgia for the limited liability company.
Besides these, the limited liability company in Georgia
can appoint a company’s secretary, but this procedure is not compulsory. This company type must also submit tax returns following the accounting requirements available in Georgia
and it must appoint an annual general meeting; our team of specialists in company registration in Georgia
can provide more information on other characteristics of this business form and the procedure of opening an LLC in Georgia.
The registration of a company in this country is concluded through the National Agency of Public Registry
, an institution which operates under the Ministry of Justice
. Once registered here, the company will receive an identification number and extract issued by the Registry of Entrepreneurs and Non-Entrepreneurial Legal Persons
. This extract can also be obtained through the online platform on the National Agency of Public Registry
, where all types of companies, including the Georgian limited liability company
, can request this document.
The first steps for opening an LLC in Georgia in 2021
The first step and also a decisive one is naming the company. A company name should be chosen according to the business owner’s wishes, but only if that name is available. The name of a Georgian limited liability company will also contain the abbreviation L.L.C. or LLC.
There are special restrictions that apply to the usage of words or already existing names, such as those referring to existing state agencies. The name of the company is important, it defines the business and helps the customer identify the company. Business owners should check the availability of a business name and they should also secure a domain name for their future business.
Necessary documents for opening an LLC in Georgia
The limited liability company in Georgia is founded based on the articles of association. This document includes: the name of the company, the name and address of its members and any additional information regarding the types of activities that the company will develop in Georgia. Besides these, the articles of association should also include the below mentioned provisions:
- • the selected legal entity of the company – in this case, the limited liability company;
- • the registered address of the company and the specimen signatures of the company’s founders;
- • the structure of the company’s management body and the rules regarding the decision making process;
- • the shares owned by each shareholder (the company can also be formed by a single shareholder);
- • the duration for which the company is set up (if this applies, the duration will be expressed in years).
A transmittal form must also be submitted with the articles of association. Limited liability companies in Georgia that have only one member must also create an operating agreement. This is a document that states the ownership and operating procedures for the company.
Further requirements for a LLC in Georgia
include obtaining an employer identification number that will be used for opening a bank account
, for taxation purposes and also for hiring employees. Every LLC in Georgia
will have to comply with the exiting requirements for annual filings and other taxation principles. Depending on the business sector, additional special permits and licenses may be required.
What are the tax considerations for companies in Georgia?
Being registered with the purpose of developing commercial activities, companies in Georgia
, including the limited liability company
, are liable to a set of taxes. In the case of a limited liability company
, the taxation
will be done based on the corporate tax system, unlike the sole trader, which is taxed based on the personal income tax regulations. When referring to taxes, Georgian legal entities
are charged with the following:
- • the corporate tax – charged at a rate of 15% on the company’s distributed dividends;
- • withholding tax on dividends – charged at a rate of 5% for the dividends paid to non-residents;
- • the value added tax – the company is required to register once its turnover is above GEL 100,000;
- • the value added tax in Georgia is imposed at a rate of 18%;
- • the withholding tax on royalties and interest is applied at a rate of 5%.
What are the withholding taxes in Georgia in 2021?
The rates on withholding taxes in Georgia for 2021 are applied at the same rates as the ones mentioned above, but such rates can vary based on the whether the recipient is a tax resident of country with which Georgia has signed a double tax treaty. For non-treaty countries, the withholding taxes on interest, royalties and dividends are charged at a rate of 5%, while the rates for the same parts of income can be charged with 0%, 5%, 10% or 15%, depending on the provisions of each treaty.
A limited liability company in Georgia will be liable for the payment of the corporate tax (or the profit tax) if it is registered in this country, but also if it is set up as a non-resident company which develops a commercial activity on the Georgian territory. Companies can also be charged with excise taxes, and they can apply if the legal entity is a producer of excisable products, an importer, an exporter or if it delivers gas for vehicles.
Please note that Georgia
provides several economic free zones
and if a company it is registered in one of the country’s free zones, a set of tax exemptions can apply. For example, there is a full exemption on the corporate income tax if the company is set up in a free industrial zone. The exemption is also applicable to the value added tax, the property taxes or the customs duty; further information on other tax benefits available in this case and the procedure of opening an LLC in Georgia
can be presented by our team of specialists in Georgian company formation
Our company incorporation representatives in Georgia
are ready to help you with all the steps needed for incorporating and registering a company
in the country. You can call our office in Tbilisi
to find out more about our offers; investors can also receive in-depth information on the types of services we can provide when opening an LLC in Georgia