Georgia, a part of the European Union’s Free Trade Area, features in the top 10 in the Ease of Doing Business rankings maintained by the World Bank Group. Consequently, the country is known for its business-friendly environment and booming industries, especially tourism, energy and agriculture. If you are looking to set up your business in Georgia, here are 5 pieces of information that would help you before starting…
1. What's Trending?
The first step to set up shop is to know what kind of businesses are picking up; what kind of businesses are doing good; or what sort of businesses have the potential to flourish in the Georgian economy.
Whether it's a small business idea or a fully-fledged big deal investment plan, knowing what kind of business you wish to set up and its feasibility in the markets will help your business stay afloat and survive in these congested industries.
Here are some business ideas which are budding at an exemplary rate in Georgia:
- Coffee Shop Business
- Restaurant and Bar
- Poultry Farm
- Tourism Consultancy Services
- Pharmacy and Wellness
2. A Business Structure That Works
A business structure is essentially incorporating and identifying the legal status of a company. So, it's a primary step to spell out the legal structure of your business which represents the most suitable and appropriate model.
There are 9 business structures to choose from in Georgia:
- Sole Proprietorship
- General Partnership
- Limited Liability Partnership
- Limited Liability Company
- Joint Stock Company
- International Trading Company
- International Financial Company
- Branch Office
- Representative Office
3. Determine the Costs
When investing into a business venture in Georgia, you must calculate the associated costs to do so. With the inclusion of overall value of investment along with capital, rent and other maintenance costs and variable and fixed costs.
As a compulsion, all businesses operating in Georgia, regardless of their legal structure, will need to do the following:
Pay the Registration Fee
The cost of the registering a business in Georgia is GEL 100
Set a Corporate Bank Account Exclusively for the Business
The value here lies between the range of GEL 10 and GEL 100, depending on the bank where the account is set up
Register with the Entrepreneurial Register
This procedure sees no imposition of a fee.
Obtain an Identification Number for the Company
This procedure, too, doesn't call for a fee deposit.
4. Know the Regulations in Georgia
The registration of all companies and businesses in Georgia is performed as per the rules and regulations imposed by:
- The Civil Code, 1997
- The Law on Entrepreneurs, 1994
- The Law on Assistance and Guarantees for Foreign Investments
These rules of law stipulate the manner in which new businesses are set up in Georgia.
Note that if you are a foreign investor willing to start a business, you must get all your company documents notarized at a public notary. Moreover, the documents have to be legalized within the country in which the foreign shareholders are residing, in accordance with the provisions set up by the Hague Convention.
To establish a limited liability company in Georgia, it is mandatory to be present in the country during the incorporation procedure.
5. The Taxes
Before setting up your business in Georgia, here is all you need to know about the taxes in the country:
- The corporate income tax rate levied on a company in Georgia is 15%.
- In Georgia, the standard value added tax (VAT) rate is 18%. A 0% VAT rate applies to exports, services of tour operators, electrical power, international shipping activities or transfers of gold to the National Bank of Georgia. A company has to register for VAT if its annual revenue is over GEL 100,000.
- Georgia does not apply the excise tax. However, certain categories of products can be subjected to this tax.
- Dividends distributed by a company are subject to a 5% dividend tax rate, regardless to whom it is paid to (this includes a non-resident entity or an individual). However, there is no tax base if the dividends are distributed from a Georgian company to another local company.
If you are interested in setting up a business in Georgia, know that the country provides a welcoming, conducive and lively business environment with abundant business opportunities.
Business Setup Worldwide is a consulting firms helping entrepreneurs and firms with company incorporation, accounting, bookkeeping, audit, intellectual property protection and corporate secretarial services in Georgia. To know more, contact us – we’d be happy to help.