Starting a business?! –Business in Georgia
You finally decided to follow your dream of becoming an entrepreneur and you picked Tbilisi as the place to start your business. What do you need to know? This article covers some basics you need to succeed in the world of Georgian business (such as registration, banking, HR and taxes).
Business registration
You need to register your business at the giant spaceship of a building that is the Public Service Hall
near the Dry Bridge in Tbilisi. Georgian law knows several types of businesses, but by far the most
commonly used by aspiring entrepreneurs is the Limited Liability Company (შეზღუდული
პასუხისმგებლობის საზოგადოება). An LLC has one or more owners and the structure limits
their liability in case the business doesn’t work out. Unlike in some other countries, LLCs in
Georgia are not flow-through entities for tax purposes, which means that the company pays profit
tax and withholds taxes on dividends when distributing those profits to its shareholders. Other
common corporate entities in Georgia include the Joint Stock Company (a legal form for large
companies or publicly traded companies) and the Limited Partnership.
Registration is cheap (100 GEL for an LLC) and you generally don’t need a lawyer. Your charter
needs to be in Georgian or bilingual; an example charter is available online . The person who owns
the address that you plan to register at needs to give their permission: it is easiest to bring this person
along with you when you register. If you don’t speak Georgian, bring a translator (not necessarily a
certified one) who is not involved in the business, so that he or she can sign off on any translation
done.
Banking
Once you’ve registered your business, getting a bank account at any major bank is quite easy: just
make sure to bring the proof of registration with you to the bank. The fee for opening a bank
account is usually minimal, but additional fees are charged to use Internet banking or company debit
cards or have foreign currency accounts. The Georgian banking system is generally safe and well-
capitalized. Most lending is collateralized, so if you are just starting and don’t have any assets (yet),
it may be difficult to get a bank credit.
Labor
Labor in Georgia is quite cheap, with the average employee only making 712.50 GEL per month in
2012. The median is even lower, though, because finance jobs skew the average and most lower-
paying jobs are unregistered informal sector jobs not included in the statistics. More and more
people speak English, but people with special skills can be hard to find. Be prepared to pay more
than the average salary for such employees. . The most commonly used site for job postings
is www.jobs.ge, but also try to find people through your network. Labor regulation in Georgia used
to be quite lax, but has recently been tightened, although it is still nowhere near Western standards.
Taxes
Georgia has a flat tax system with a corporate income tax rate of 15%, a personal income tax rate of
20% (withheld by the employer), 18% VAT and 5% tax on interest payments and dividends. There
is also a 1% annual property tax. There is no capital gains tax. If you’re a business and your annual
revenue is less than 100,000 GEL, you don’t have to pay VAT. After registering your business, you
have to register with the Revenue Service separately. Tax laws change frequently and can be vague
and open to interpretation so make sure to consult with a professional. Because documentation
requirements are often more stringent than in other countries, be sure to hire a good accountant as
well.
Good luck with your new business! Georgia is an exciting country with lots of opportunities!
