How To Start A Business In Georgia

Bordered by the Black Sea and mountains between Europe and Asia is Georgia, a country that fascinates its visitors. It may be small but it offers something for everyone from coastlines and caves to snow-capped peaks and wine vineyards. In fact, Georgia is believed to be the birthplace of wine and its cuisine is loved globally.

Its capital city, Tbilisi, is a vibrant one and a melting pot of modern innovation mixed with traditional charm. This, together with its residents’ hospitality and affordability of living, has caught the attention of entrepreneurs and digital nomads alike.

With its undeniable appeal, Georgia is quickly becoming an ideal location for businesses. Here is everything you need to know about starting one in this Eastern European gem.

Why Start A Business In Georgia?

According to the World Bank’s Ease of Doing Business Index, Georgia ranks 6th and has always maintained a top spot in this regard. There are a couple of reasons for this and to explain why so many entrepreneurs and investors are choosing Georgia for business activities.

Quick registration process: A company can be registered in Georgia in just one day. This is highly favourable compared to some other countries where it could take weeks or even months.

No minimum capital required: Some regions will require a minimum capital deposit to start a business, and the amount will vary depending on your business structure. This is not the case in Georgia which is ideal for cash-strapped entrepreneurs.

Foreigners are welcomed: Foreign entrepreneurs are able to own and run their businesses freely without needing a local partner.

Good location: Georgia is situated between Europe and Asia, allowing businesses to trade within these markets.

Industries With High-Growth Potential

One of the first things that an entrepreneur is tasked with is deciding which industry to start a business in. The location of the business will usually play a role in this and a few sectors in Georgia have plenty of exciting opportunities to explore.

Tourism: This is one of Georgia’s biggest industries thanks to its stunning landscapes and coastal resorts which tourists flock to see every year.

Agriculture: Georgia has a vast amount of fertile land for farming startups as well as in wine production.

Logistics and transport: Due to the country’s position, Georgia has become an important link between Europe and Asia for transport companies.

Technology: Tbilisi is a growing hub for information technology startups as its tech scene grows.

Navigating Georgia’s Tax System

Georgia has an incredibly favourable tax system, another drawcard for foreign investors and entrepreneurs. The corporate tax rate of 15% is not applicable for company profits which are reinvested as those are tax-free.

The Value Added Tax (VAT) rate is 18% but only if your annual turnover exceeds 100,000 GEL.

To promote new businesses, the country’s Small Business Status allows entrepreneurs to pay as little as 1% on their annual turnover if it is below 500,000 GEL.

There are also a few Free Industrial Zones within some cities in Georgia where tax is exempt.

Visa And Residency Requirements For Foreign Entrepreneurs

Overall, Georgia’s visa policies are fairly relaxed and foreigners have a few options to choose from. Residents of more than 90 countries, including the UK and EU, can stay in Georgia for up to a year without a visa.

For those wanting to start a business or open a bank account, it can be done without needing to applying for any additional permits.

To stay longer in the country or obtain residency, these are the options available:

Short-Term Residence Permit: Applicable if you start a business in Georgia or are already employed there.

Permanent Residence: May become available after living in the country for 10 years.

Investment Residence: You could qualify for residency quicker if you are able to invest more than $300,000 USD in the country.

Entrepreneur Residence: Available if sufficient proof of an active, profitable business can be shown.

How To Start A Business In Georgia

The process of setting up a business in Georgia is quick and very straightforward. If it is your desired location for your startup, here is a step-by-step guide on how to get started.

Select A Legal Structure

The first step is to choose your business entity. Most foreigners opt for an Individual Entrepreneur structure which is simple to set up with low taxes and is ideal for freelancers or small businesses.

Another option is a Limited Liability Company which is suited to bigger businesses where personal liability is limited.

Register The Business

To register your company, you can visit any Public Service Hall of your choice in one of the cities. You will need to bring your passport and a suggested company name and you can then fill out a form in English as well as pay a small registration fee of about 100 GEL.

It takes one business day for the company to be registered successfully.

Open A Business Bank Account

Once you have received your company identification number, you can open a corporate bank account with your registration certificate and passport. This also usually takes about one business day to be processed.

Register For Tax

This can be done with the Revenue Service of Georgia where you will be granted access to the country’s online tax system. If applicable, you can also apply for the Small Business Status to only pay 1% tax on your turnover.

Should You Start A Business In Georgia?

Georgia is one of the easier countries to start a business in, especially for foreign entrepreneurs. In fact, with the right support and planning, your business could be up and running in just a few days.

Its affordability also makes it a great option for startup founders who are on a tight budget. That, with its welcoming business environment, can set the stage for a highly successful business.

Good luck!