In Georgia, there are many different types of legal entities for doing business. One of the most popular is a Limited Liability Company ( LLC).
Taxes for various types of activities are as follows:

– Corporate Income Tax – 15%;
– Dividend Tax – 5%;
– PersonaI Income Tax – 20%;
– VAT – 18%;
– Property tax – 1%;
– Pension tax (if the employee is a citizen of Georgia or has permanent residence) – 2% of the company and 2% of the employee’s salary ( or the company takes full responsibility for paying 4%).

The advantage of the Estonian tax system is that corporate income tax arises only when profits are distributed between shareholders in the form of dividends. From the moment of withdrawing dividends, the company has to pay 15%corporate income tax and 5% tax on dividends. However, if the profits are not taken out by the company founder(s), but instead left in the company deposit for its further development, profit tax is not due for payment. This model is ideal for the enterprise that wishes to develop its start-up project in a gradual framework.

A Limited Liability Company can be formed within two working days. You should take into account that this period includes only the registration of the company in the National Agency of Public Registry.

While most people do make an initial capital contribution, according to the legislation of Georgia it is not required, thus initial capital is solely an optional investment.

Since the beginning of 2021, there are certain limitations for non-residents while presenting the corporate interests of Georgian LLC in every Georgian Bank. Since Georgia has signed the BEPS (Base Erosion and Profit Shifting) agreement, Georgian companies are required to have the operational side of the business also present in the country. Thus, before opening an account in any bank institution in Georgia it is advised to present evidence of physical as well as economic presence in Georgia.

Before submitting your application to the Bank, we strongly recommend that you accustom yourself to the main requirement announced by that Bank. It is important to fill out the application form correctly since the bank pays a lot of attention to the information stated in this form. The representatives of the legal department in the bank will make decisions for, or against your application, based on the information you provide. For this reason, it is preferable to get ready all necessary documentation prior to submission, for example, office rental agreement, drafts of contracts with contractors/suppliers, drafts of employment contracts with employees, etc.

There are several beneficial schemes for an IT business in Georgia. If you are actively engaged in software development, IT engineering, java development and so on, you can enjoy one of the following:

– 1% Individual Entrepreneur Freelancer;
– Status of the Virtual Zone (LLC);
– Status of an International Company ( daughter company);

All three structures differ from each other in the compositional and structural manner, as well as with their taxation system. To get more information, please contact one of our specialists and book your free case evaluation time.

The Status of Virtual Zone does not imply virtual services provided remotely, on the contrary, obtaining this status requires physical presence in Georgia.
The status of Virtual Zone is a preferential regime strictly for IT businesses and can be granted to Georgian companies that provide various services in the informational technology field.
The company that is registered in the National Agency of the Public Registry of Georgia can apply for the Status of Virtual Zone if:

– Has a representative office and employees in the territory of Georgia;
– Operates in the field of IT;
– Distributes the product outside Georgian Jurisdiction.

The status of the Virtual Zone suggests exemption from income tax of 15% and VAT of 18%.
For more information contact our specialist or read the article – Status of Virtual Zone.

International IT and maritime companies can benefit from tax incentives introduced by the Georgian Government, namely the Status of an International Company. To qualify for this status, an LLC must first be established in Georgia and 50% or more of the company’s shares must be held by a non-resident company with special requirements of at least 2 years of experience in the permitted field.
The status of an international company implies the following tax burden:

– Corporate Income Tax – 5%;
– PersonaI Income Tax – 20%;
– Dividend Tax – 0
– Tax on the property (except land) – exempt if the property is used only for activities permitted under the status. For more information.

For more information, please contact one of our specialists and book your free case evaluation time.

By entrusting someone in Georgia to operate on your behalf by the Power of Attorney you have the possibility to register a company in Georgia without even being here.
We can offer you the service of opening a company by proxy. Our specialists will qualitatively and promptly register your business as soon as possible after receiving the documents.
The status of an international company implies the following tax burden:

– Corporate Income Tax – 5%;
– PersonaI Income Tax – 20%;
– Dividend Tax – 0
– Tax on the property (except land) – exempt if the property is used only for activities permitted under the status. For more information.

For more information, please contact one of our specialists and book your free case evaluation time.