Georgia sits at the intersection of Eastern Europe and Western Asia, neighbored by Russia, Turkey, Armenia, and Azerbaijan. The country has a rich cultural and historical heritage which is influenced by various empires, reigns, and civilizations. Starting from the Greek rule, Persian occupation, and Roman autonomy to the Ottoman Empire, each era has left its mark on the society, architecture, arts, and traditions of Georgian people.
Georgia became an independent country as a result of the 1991 post-Soviet Union collapse, and since then has undergone several reforms pertaining to the economy, politics, and social welfare. Another series of reforms were made to education, industry, healthcare, and the against corruption.
Types of business structures in Georgia
Various business formats are available to investors wishing to establish a business in Georgia. Sectors such as power and energy, oil and gas, construction, pharmaceuticals, and cosmetics, etc. have seen a boom in recent years.
Some of the popular business formats are tabulated below:
| S# | Type of business structure | Local name | Min. paid-up capital required |
| 1. | Sole proprietorship | Iuriduli Piri | No paid-up capital required |
| 2. | Limited Liability Company (LLC) | ShPS | $1 |
| 3. | Joint Stock Company (JSC) | Sajaro Aktsianis Kompania | $20,000 |
| 4. | Partnership | Partnioroba | No paid-up capital required |
Sole Proprietorship
Owned and operated by a single natural person, a sole enterprise is the simplest and least costly method of business. It is preferred by retailers, professionally skilled individuals, and freelancers, generally speaking. The owner assumes complete responsibility for losses and debts in a personal capacity in this format.
Limited Liability Company
An LLC is a formal business entity that is recognized as a legal person by the law. All responsibilities pertaining to debt and losses are assumed by the company, while the owners are considered separate from the company.
Partnership
A partnership is formed between two or more individuals who share their skills, experience, and capital in the rations agreed mutually. There can be any number of partners with limited or unlimited liability, however, at least one partner must have general liability.
Joint Stock Company
A JSC is similar to a public limited company; essentially creating capital through the public. A preferred choice for large companies and businesses that require heavy investment. Investors create capital by the mix of public offerings, called equity, and bank loans, referred to as debt. The mixture of debt and equity allows investors to optimize capital while limiting their stakes in the company.
Cost of registering a company in Georgia
The costs involved in the registration process mainly pertain to government fees, local fees, taxes, registration fees, etc.
Here are a few costs that businesses are most likely to incur during this process:
Limited Liability Company (LLC)
The government fee for registering an LLC in Georgia is US$ 40. Additionally, if the services of a legal professional are rendered or a company registration agent is employed, the fees can range from $150 to $500 or more, depending on the level of services required.
Joint-Stock Company (JSC)
The government fee for registering a JSC in Georgia is $100 In addition to this, legal professional or a company registration agent is hired the cost may go up between $500 to $2,000 or more.
Branch Office
The government fee for registering a branch office in Georgia is $50. Legal and other services may cost up to $500.
It is important to note that these costs are estimates and may vary depending on the specific requirements and services required.
Cost of doing business in Georgia
Costs that arise from normal business operations are termed operational expenditures. These expenditures vary depending on the size, location, nature of the business, and the industry/sector of the business.
A few expenses that should be budgeted timely are listed below:
Labor Costs
The cost of labor in Georgia is generally lower than in many other European countries. The minimum wage in Georgia is $170 per month, but the actual wage rates may vary depending on the industry, skill level, and location.
Taxes
Georgia has a flat income tax rate of 20% for both individuals and businesses, which is one of the lowest in Europe. Additionally, the value-added tax (VAT) rate is 18%, and there are various other taxes and fees, such as property tax, social security tax, and customs duties, depending on the type of business and activity.
Real Estate Costs
The cost of commercial real estate in Georgia varies depending on the location, size, and quality of the property. In Tbilisi, the capital city, the average rent for a commercial property is around $15 – $40 per square meter per month.
Utilities
The cost of utilities, such as electricity, gas, and water, is relatively low in Georgia compared to other European countries. The average cost of electricity is around $0.050 per kWh, and the cost of water and gas is also low.
Transportation
The transportation cost in Georgia is also relatively low compared to other European countries. The cost of fuel is around $0.90 per liter, and the cost of public transportation is around $0.50 per ride.
Benefits of registering a company in Georgia
As stated earlier, Georgia is the intersection of two continents; having access to two gigantic markets for trade. The trade relationship of Georgia with the neighboring countries is ideal for business to flourish and prosper.
A few significant advantages are:
Strategic Location
Georgia is strategically located at the crossroads of Europe and Asia, making it a gateway to a large market of over 2 billion people.
Business-Friendly Environment
Georgia is known for its business-friendly environment, with a low tax rate, simplified business regulations, and a streamlined registration process. In the World Bank’s Ease of Doing Business 2021 report, Georgia ranked 7th out of 190 countries.
Low Cost of Living
The cost of living in Georgia is relatively low, which makes it an attractive destination for expats and investors. The cost of food, housing, transportation, and entertainment is lower than in many other European countries.
Skilled and Educated Workforce
Georgia has a highly skilled and educated workforce, with a literacy rate of over 99%. The country has a well-developed education system, with several universities and technical schools that produce a pool of talented professionals.
Strategic Infrastructure
Georgia has a well-developed transportation and logistics infrastructure, with modern airports, seaports, and highways. The country is also investing heavily in renewable energy and ICT infrastructure.
Investment Incentives
The Georgian government offers several investment incentives to foreign investors, including tax exemptions, cash grants, and streamlined administrative procedures.
