Tbilisi is known for its friendly business policies and attracts many entrepreneurs from all over the world. With its inviting tax regime for small businesses, a lot of freelancers and individual entrepreneurs choose to open their company in Georgia. If you’re one of them, here is your step-by-step guide to opening your small business in Georgia.
Is Georgia a good place to open a small business?
Georgia ranks 7th in the ease of doing business by the World Bank. It’s not surprising when you know how easy and straightforward the procedure for opening a company is. The tax regime for small businesses and other businesses in general is also very attractive.
Types of small businesses in Georgia
In Georgia, there are two forms of small businesses: the micro and the small business.
The micro business status is for individual entrepreneurs who don’t have employees and earn less than 30.000 GEL per year.
Requirements to obtain the micro business status:
- Total revenue: less than 30.000 GEL (10.471 USD) per year
- Employees: The business has no employees (only the owner works in it)
- Forbidden activities: The business does not carry on the following activities: activities requiring a license or permit, currency exchange operations, gambling, trading, consulting, architectural, lawyer, notary or medical activities.
- VAT: a micro business is not allowed to be registered as a VAT payer.
- Taxes: a micro business has to file an annual tax report on the 1st of April. The tax rate for micro businesses is 0%.
- Record of expenses: a micro business does not have to record expenses
The small business status is destined for small companies and individual entrepreneurs earning less than 500.000 GEL per year.
Requirements to obtain the micro business status:
- Total revenue: less than 500.000 GEL (174.500 USD) per year
- Employees: A small business can have employees.
- Forbidden activities: The small does not carry on the following activities: activities requiring a license or permit, currency exchange operations, gambling, trading, consulting, architectural, lawyer, notary or medical activities.
- VAT: a small business has to be registered as a VAT payer if it earns more than 100.000GEL (35.778 USD)
- Taxes: a small business has to file a monthly tax report before the 15th of each month. The tax rate for small businesses ranges from 1% to 5% depending on the nature of the business.
- Record of expenses: a small business should records expenses in chronological order per calendar year, and keep these records for at least 6 years.
Open a Small Business in Tbilisi, Georgia : Step-by-Step Procedure
Here is the step by step procedure to open your small or micro business in Georgia.
Step 1: Go to the public service hall
The public service hall’s main branch is in the middle of Tbilisi. Go there before midday to avoid long queues. It is a busy open space with desks for every possible public service demand. At the entrance, just say you are a foreigner and you come to open a business. You will be given a number that places you in the queue to the correct desk. Once it’s your turn, you will be asked what kind of company you want to open, then to show your documents and sign papers. It is best to hire a translator or to come with a Georgian – speaking friend if you want to make sure there is no misunderstanding.
- Visa or residence permit
- A legal address in Georgia (if you don’t own a home in Georgia, ask your landlord if he agrees to you using this address)
- A Georgian phone number
- A document justifying your business: it can be a diploma, a contract or proof of contract with a client, or any other document proving your ability to perform your activities
Cost: the fee for opening a business is 100 GEL (35 USD). If you choose the accelerated procedure, it is 200 GEL (70 USD).
Estimated time: On a normal procedure, the registration takes 2 days. On an accelerated procedure, it takes only 1 day.
Step 2: Open a Georgian bank account
Once you have been to the public service hall, open your Georgian business bank account. You can do it directly in the public service hall as several banks have offices there. Show them the paper you have been given by the administration to open your business account.
- Passport and visa or residence permit
- Paper given by the public service hall
Cost: 10-100 GEL (3-35 USD) depending on the bank/account you choose
Estimated time: 1 day. It can take a few days before you receive your bank card.
Step 3: Go to the revenue service
When your business is officially registered, you will receive a message from the public service hall with your company’s official number. Then, you will have to go to the revenue service to register as a taxpayer.
- Your passport and visa or residence permit
- The official paper of registration of your company, sent to you by the public service hall
Cost: 0 GEL
Estimated time: 1 day
That’s it! Now that you are registered as a company and taxpayer, you can perform your activities freely as long as you pay your taxes and file your declarations on time. The entire process costs less than 100 USD and can be done in 2 days.