How to Start an Offshore Company in Tbilisi, Georgia

Written by Jon Erikson

Dateline: Tbilisi, Georgia

The unfortunate truth is that there is a shortage of attractive places to start a business these days. The US economy is not as dynamic as it used to be and the European Union is crippled by excessive red tape and high taxes.

Even the private sectors of so-called “emerging” economies like China, India, and Turkey are held back by corruption, poor infrastructure, and unpredictable government policy.

Is there any good news hidden under all the gloom and doom? Yes! There are still a few fertile entrepreneurial fields to be sewn.

Georgia is one example.

This once-crumbling, post-Soviet country has remade itself as a welcome destination for businesses of all sizes, and is a great place to start an offshore company or establish tax residency.

As a developing country, Georgia needs access to foreign capital, as well as an influx of skilled, enterprising people. Recognizing these needs, the government has made its mission over the past decade to ensure that starting a company in Georgia is as simple and cost-effective as possible.

The fruits of Georgia’s business-friendly policies are blossoming. This year the country ranked 24th in the World Bank’s Doing Business Survey, due in large part to being ranked 6th in the world on ease of starting a business.

Why You Should Start an Offshore Company in Georgia

Firstly, consider why starting a business in Georgia might be a good fit for you. It’s a country of fewer than 4 million people, but it lies right on the boundary of Europe and Asia and enjoys good economic relations with the EU, US, China, Turkey, and Iran (with almost everyone, in fact).

Georgia signed a deep and comprehensive free trade agreement with the EU in 2014 and is currently negotiating a free trade deal with China. Plus, the country’s business community is hopeful that a similar deal with the US will be reached in the coming years.

Companies such as China’s Hualing Group have taken advantage of the country’s liberal trade regime by using Georgia as a hub for transporting goods between the two continents.

What’s more, Georgia has vibrant service, tourism, and real estate sectors. It has attracted forward-looking business people from around the world.

What Kind of Company You Should Start?

Georgia’s start-up sector is covered by the Law of Georgia on Entrepreneurs, which was first passed in 1994 and has been amended several times since to make corporate governance more efficient. The country’s legislative and regulatory framework covers the following types of companies:

  • Joint Stock Company (must register)
  • Limited Liability Company (must register)
  • General Partnership (must register)
  • Cooperative (must register)
  • Sole Proprietorship (must register, but not a legal entity)
  • Joint Venture (registration is not required)
  • Branch Office (must register)
  • Limited Partnership (must register)

Whichever of the above models describes your operation, starting an offshore company in Tbilisi or other cities in Georgia is nearly cost-free. An interested entrepreneur must simply pay the new business registration fee of 100 Georgian Laris (about $40 at the current exchange rate).

Streamlined Procedures for Starting an Offshore Company

In addition to keeping costs down, the Georgian government has made the process simple for those with little knowledge of how to start a business. Here are a few main features:

  • A single registration process for both state and tax purposes
  • No minimum capital requirement
  • The company charter can be in any language
  • Only two registration procedures are required

Once you’ve decided that this charming locale is the place where you want to make an offshore investment by starting a business, the process is a snap.

First, you pay the very reasonably-priced registration fee. Next you register your company with the National Agency of the Public Registry. This process requires a few steps: First, submit the completed application, a notarized copy of your company charter, and a document proving that you paid the registration fee.

The process also requires you to attach a document confirming your legal occupancy of the premises of your new company’s registered address and the written consent of your company’s appointment director to serve in the position (Georgia is welcoming to start-ups, but still imposes certain conditions).

Registering a Branch Office is slightly more complex than the other cases, as you’ll have to submit additional documents pertaining to the company’s establishment outside of Georgia.

Once you’ve paid the fee and submitted your completed application, you’ll also need to open a bank account in Georgia. Fortunately, the country’s retail banking sector is surprisingly well developed. You’ll also find the customer service in Georgia’s banks is without question the best in the former Soviet Union.

The Georgian Model Will Help You Pay Less in Taxes

Once you have established an operation in Georgia, you’ll find taxation to be much lighter than in nearly any European country. There is a corporate tax rate of 15 percent, a flat income tax rate of 20 percent, a 5 percent tax on dividends and interest and a 1 percent tax on property.

Plus, there is no capital gains tax.

However, Georgia’s taxation system still has some kinks to work out, so contacting an expert is probably a worthy proposition.

Other Important Information to Know

Georgia has no capital requirements for starting a company. However, you will need to prove legal occupancy of the premises. This may involve purchasing property in Georgia.

Fortunately, foreigners have property rights on an equal plane with citizens of Georgia (for a time foreigners were restricted from buying agricultural land, but in 2014 the law was revised to open the market to non-Georgian citizens).

Registering your purchase of immovable property is simple. You must simply submit an application as well as attach a notarized version of the contract, documents proving your identification, and ancillary documents.

Procedures are similar if your offshore company is to be registered on rented premises, the only difference being that you will be required to submit a notarized copy of the lease agreement.

If you believe that Georgia may be the right place for you to start an offshore company and/or obtain a second passport, apply for a personal Strategy Call with us. We can help you determine the right course of action for your preferences and situation.

Jon Erikson
Last updated: May 15, 2020 at 12:02PM

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12 Comments

  1. Jeff C.

    So for someone that has an internet business, would you recommend Georgia as the primary location for setting up a corporation? Or would you still recommend someone going for a more established locale such as Hong Kong or Singapore? This is for a global online business? If you do recommend such a move, can they handle volume and have the ability, or resources for online merchant processing?

    Reply
  2. Oddmund Grøtte

    Hi, did Georgia implement the zero tax policy on retained earnings?

    Reply
  3. Steven Almeida

    Thanks for the article. I would like to know if it is possible to start a company without first purchasing property, can your address be verified by a lease contract for a rented property or does it have to be purchased?

    Reply
  4. Hamid

    Hi
    I’m Hamid from iran I want to open marketing automobile in tibilis Can you led me
    Thanks

    Reply
  5. Reda

    dear sirs
    good day
    I want to establish a shipping and trading company in Georgia
    Do you have consultation and coordination?
    B.Regards
    Reda

    Reply
  6. Jan

    Can you write an article on Sole Proprietorship (must register, but not a legal entity) In Georgia. Thx

    Reply
  7. Miled

    I’ m lebanese and planning to open a small business in Georgia, i need assistance and guidance

    Reply
  8. Mohideen

    Hi myself Mohideen planning to start small business in Tbilisi. Could you please advice the right procedure

    Reply
  9. Lars

    I’m from Norway, living in Thailand. I’m interested in setting up an LLC in Tbilisi and an offshore bank account.
    I’m having an ongoing e-commerce business in Norway that I run via the internet. At present my company is in HK
    but the bank suspended my account because I live in Thailand and because of the civil unrest taking place there.
    I opened a company in Singapore only to learn I have to move there to open a bank account, which is not an option.
    So, I still have my HK company, and a new Singapore company, with no bank accounts. My PayPal account is HK is
    still connected to the bank, but cannot withdraw to the suspended account and my PayPal account have no bank ac
    to connect to. I can open a bank account here in Thailand, but Thailand is not a business-friendly country, so Geogia
    seems better, but which agent up there can one trust? Now, I have learned that your fee start at $12k, and I will not pay that for opening a company and a bank account, so if you u don’t reply, that’s ok. I might however need your services later, when I expand into the US markets, if Trump win the 2020 election.

    Reply
  10. Vivian Dias

    Hi,

    Would like to know details for starting an outbound call center (15 to 20) seater, either in Gorgia or Tbilisi. We have a center in Mumbai India with an experince of a decade.

    Reply

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