Georgia's commitment to enhancing its business environment has made it an attractive destination for entrepreneurs and investors. This blog post explores the ease of company registration in Georgia, covering its simple tax system, various business entities, and additional options for foreign companies seeking a presence in the country.
📌 Georgia's Business-Friendly Environment
Georgia's impressive rankings in the World Bank's Doing Business report 2022 highlight its favorable business environment. It's ranked 7th globally for ease of starting a business and 9th for overall ease of doing business. The following factors contribute to Georgia's appeal:
Simple Tax System: Georgia offers a straightforward tax system, making it easier for businesses to navigate their financial obligations.
Low Corporate Tax Rate: The country maintains a relatively low corporate tax rate, which is conducive to profit generation.
Reduced Bureaucracy: Ongoing efforts to minimize bureaucracy, corruption, and red tape further simplify business operations.
Strategic Location: Georgia's location at the crossroads of Europe and Asia positions it as a desirable hub for international trade. Additionally, it has free trade agreements with the European Union, Turkey, and CIS countries, enhancing its global business connectivity.
📌 Forms of Business Entities
Georgia's legislation recognizes five primary forms of business entities:
Limited Liability Company (LLC): An LLC is a separate legal entity that offers limited liability protection to its owners, making it an attractive choice for small and medium-sized businesses.
Joint-Stock Company (JSC): JSCs divide their capital into shares, allowing shareholders to be liable for the company's debts up to their investment. This structure is suitable for larger businesses looking to raise capital by selling shares.
General Partnership (GP): GP is a business owned by multiple individuals who share both profits and losses. Partners in a GP have unlimited liability for the company's debts.
Limited Partnership (LP): Similar to a GP, an LP includes at least one general partner with unlimited liability and one or more limited partners whose liability is limited to their investment.
Cooperative: Based on the principles of voluntary membership, democratic control, and shared ownership, cooperatives aim to provide economic benefits to members through the provision of goods, services, or other benefits.
📌 Branches and Representative Offices
Georgia's legislation also recognizes additional business forms, such as branches and representative offices, allowing foreign companies to operate in the country without establishing a separate legal entity. These forms operate under the parent company's name and conduct the same activities, with the parent company fully liable for obligations and debts. This flexibility appeals to foreign companies seeking a presence in Georgia.
📌 Registration Process
To register an Entrepreneurial or Non-Entrepreneurial (Non-Commercial) Legal Entity in Georgia, interested parties should visit a Public Service Hall or territorial office of the National Agency of Public Registry. The following documents are required:
A founding agreement, duly signed by all founders and certified, following the statutes outlined in Article 5 of the Law of Georgia "On Entrepreneurs."
The founding agreement should specify the authorized person for managing the electronic portal, representation, and provide relevant contact details.
An identity document for the interested person.
Consent of each person entitled to management and representation (if expressed in the founding agreement).
Georgia's business-friendly policies, straightforward tax system, and diverse forms of business entities make it an appealing destination for entrepreneurs and investors. The streamlined registration process, including options for foreign companies, enhances Georgia's standing as a conducive environment for doing business.