Georgia has become an attractive jurisdiction for entrepreneurs seeking a straightforward company‑formation process and a low‑tax environment. The country’s tax code, electronic filing system, and extensive network of double‑taxation treaties make it possible to retain more profit within the business and manage cross‑border payments efficiently.
Setting up a company
| Step | Requirement | Typical timeline / cost |
|---|---|---|
| Register the entity | Submit identification documents for all shareholders and the articles of association (available in Georgian and English). If the documents are not in Georgian, a bilingual version is required, and a non‑licensed translator may attest that the parties understand the content. | 1 working day for standard service (≈ 100 GEL ≈ US $35). Instant same‑day service is available for ≈ 200 GEL ≈ US $65‑70. |
| Obtain company email | An email address must be assigned to the company; the name can be in English only, though a Georgian version is practical. | Immediate. |
| Open a corporate bank account | Provide the registration certificate, articles of association, and details of anticipated incoming and outgoing payments. | 3‑5 working days, depending on the bank. |
| Register with the Revenue Service | Create an online portal account to file tax returns, receive VAT documents, and manage electronic filings. | Completed alongside registration; portal is user‑friendly and fully electronic. |
| Declare ultimate beneficial owners | Submit information on the real owners of the company, as required in many jurisdictions. | Part of the registration process. |
Tax regime
- Corporate profit tax – Georgia follows an “Estonian‑type” model: no corporate income tax is levied on retained earnings. Tax is only due when profits are distributed as dividends.
- Dividend tax – When dividends are paid, a 5 % withholding tax is applied to the gross profit distribution. The tax must be reported and paid by the 15th of the month following the dividend payout.
- Value‑Added Tax (VAT) – Standard rate is 18 %. Mandatory registration is triggered when annual taxable turnover reaches 100 000 GEL (≈ US $35 000) within any consecutive 12‑month period. Registration can be completed online within two days of crossing the threshold, after which periodic VAT returns must be filed.
- Withholding taxes on outbound payments – Payments to offshore recipients are subject to varying rates:
- Interest or royalties: typically 5 %
- Salary‑equivalent payments: up to 20 %
- General payments: often 15 % (average), but specific rules may apply, and some payments can be taxed at 50 % depending on classification.
Double‑taxation treaties
Georgia has signed double‑taxation avoidance agreements with 54 countries. These treaties can reduce or eliminate withholding taxes on cross‑border interest, royalties, and dividend payments. When planning international transactions, review the relevant treaty to determine the applicable rate and any required documentation.
Practical considerations
- Reinvestment strategy – Retaining earnings within the company avoids any corporate tax, making reinvestment a tax‑efficient growth method.
- Dividend timing – Schedule dividend distributions to align with cash‑flow needs and the 15th‑of‑next‑month filing deadline to avoid penalties.
- VAT registration threshold – Monitor turnover closely; once the 100 000 GEL threshold is reached, register promptly to remain compliant.
- Banking – Choose a bank experienced with foreign shareholders and be prepared to disclose the nature of incoming payments to satisfy anti‑money‑laundering checks.
- Documentation language – Ensure all corporate documents are available in both Georgian and a language understood by the shareholders to prevent misunderstandings during registration.
By following these steps and leveraging Georgia’s tax structure, businesses can benefit from low effective tax rates, streamlined compliance, and favorable treaty benefits for international operations.
