The following forms of doing business are available in Georgia:

• Limited Liability Company (LLC) is the most common corporate form due to its simplicity and flexibility. An LLC can be established and directed by a single person.
• Joint-Stock Company (JSC) is the equivalent of a corporation and is suitable for larger businesses with many shareholders. A JSC may issue common and preferred stock.
• General Partnership (GP) in which all partners manage the business and are jointly and severally liable for its liabilities.
• Limited Partnership (LP) in which the business is managed by one or several general partners who are personally liable for the partnership’s liabilities, while the limited partners are passive investors with limited liability.
• Cooperative (CO) is a form of business owned and managed by its employees.
• Branch Office (BO) is a unit established by a foreign company to conduct business in Georgia.
• Sole Proprietorship is a business form run by an individual who is personally liable for the liabilities of the business.

Branch office. A branch office is a territorial unit (subdivision) of a foreign company in Georgia. It is not an independent legal entity in Georgia. A branch office shall be registered in the public registry of Georgia and get a taxpayer number.

Subsidiary. A subsidiary is a separate legal entity, which is registered in Georgia, it can be in the form of an LLC or JSC. The subsidiary's status grants limited liability to its parent company which is not liability for the debts of the subsidiary. 

A non-profit organization in Georgia can engage in business activities to the extent that such activities are of auxiliary nature and the profits are applied to the pursuit of the goals of the organization. The organization is not allowed to distribute such profits to its founders, members, donors, managers, etc.

A non-profit can be a membership-based association the primary purpose of which is to attend to the needs of its members. It can also be organized as a charitable fund. Tax benefits are granted only to certain funds the charitable nature of which is confirmed by the tax office. In particular, such funds must demonstrate at least one year of charitable activities. Tax-exempt charitable funds do not pay taxes on their income, except for income from auxiliary business activities.   

Non-profits may be managed by a single executive manager or a collective board of directors. 

Religious organizations are registered as public legal entities, provided that the religious denomination has historic links to Georgia or represents a religion recognized by a member state of the Council of Europe. 

The business name identifies the company. It shall consist of one or several words (made up or real) as well as an ending indicating the form of the company: 

• "JSC" for a joint-stock company
• "LLC" for a limited liability company
• "RC" for a registered cooperative 

It is not allowed to use graphic symbols that do not have a sound or verbal equivalent by linguistic standards. The business name shall not call any confusion as to the form or the scale of the company's activity and relations among the partners/shareholders.

It is advisable to check the availability of the name in advance in order to avoid disputes with identically named businesses.

A legal address, email address, and phone number are provided to the Registry. Electronic notices sent to the phone number/email address are considered officially delivered. The applicant must submit documents confirming his rights (ownership, leasehold) over the premises used for company registration purposes. Alternatively, the owner of the premises can consent to such use in writing.

After the official registration of a company is completed the director will normally proceed to tax registration by following the instructions sent to the company email address. It is mandatory to register the company with the Revenue Service's electronic platform to be able to file tax returns and receive official notices. 

Corporate Income Tax

A company registered in Georgia is considered a tax resident and is taxable on its worldwide income.

The corporate income tax (CIT) rate in Georgia is 15%. However, a company does not have to pay any taxes on accrued profits until such profits are distributed. Distributions can take the form of dividends or certain gratuitous transfers, unnecessary or undocumented expenses, etc. Profits retained by the company are generally not taxable.

No CIT is paid by the following companies:

• Free Industrial Zone Company;
• Special Trading Company:
• International Financial Company.

Payments made to non-residents are generally subject to withholding taxes. Such taxes are imposed on dividends, interests, and royalties (5%), management and other services (10%), wages (20%). These rates can further be reduced by one of the 54 double tax treaties signed by Georgia. The list of countries that have a double tax treaty with Georgia is available here. 

Value-Added Tax (VAT)

VAT registration is mandatory for taxpayers with annual sales in excess of GEL 100,000 ($32,800). Smaller taxpayers may register for VAT voluntarily. The standard VAT rate is 18%. Export of goods and services is exempted from VAT.

Personal Income Tax

Both residents and non-residents are only taxed on income received from Georgian sources. Income from foreign sources is not taxable in Georgia. The standard tax rate is 20%. Dividend and interest income is taxed at 5%. Interest income received from banks or government bonds is exempt from taxes. Income from renting out residential premises is generally taxed at 5%. Capital gains from selling residential real estate, shares or other securities are exempt from taxes if these assets have been held for more than two years. Tax rates may be reduced by applicable double tax treaties.

Sole Proprietor Tax Exemption

Sole proprietors with annual sales of less than GEL 30,000 ($10,135) are exempt from income taxes. Sole proprietors with annual sales of less than GEL 500,000 ($167,000) are taxed at 1% of their sales.

Other Taxes

Other taxes applicable in Georgia include property taxes (0 to 1% of property value), pension fund payments (2% paid by the employer and 2% paid by the employee), excise taxes and customs taxes.

• Shareholders. There are generally no restrictions on shareholding in Georgia. Foreign individuals and legal entities are allowed to be 100% owners of Georgian companies without having to involve local partners, directors, employees etc.
  • Dividends. If dividends are formally declared and distributed to shareholders they may be subject to taxation. Individual shareholders as well as non-resident corporate shareholders pay tax on dividends at the rate of 5%, which can be reduced by a double tax treaty.
  • Limited Liability. Shareholders generally enjoy limited liability, which means that they cannot lose more than the amount invested and they are not personally responsible for the debts of the company. However, shareholders may be held liable if they acted in bad faith and thus intentionally damaged others. 
• Managers. In Georgia companies are normally managed by one or two (rarely multiple) directors who acts on behalf of the company by virtue of law and can issue powers of attorney to other managers. A company can also have an upper-level board of directors (supervisory board) with 3 to 21 directors. The creation of the board is mandatory if there are more than 100 shareholders. Directors can be individuals or legal entities. Directors and other managers may be held liable for damages caused to the company if they act unreasonably or in bad faith. Directors may also be held liable for administrative and criminal offenses resulting from mismanagement (including tax evasion, money laundering, currency control, immigration offenses etc). Managers may also be held liable for intentional bankruptcy of the company. Having an internal auditor (audit committee) is required only for companies issuing publicly traded securities. 

Certain business activities require a special license issued in addition to the general business registration documents. 

Corporate amendments. Registering amendments to the articles of organization of the company is normally required if the company changes its name, address, email address or phone number, directors, shareholders, etc. Registration of the amendments normally takes two business days. Next business day registration is also possible if fast-track service fees are paid (GEL 200 instead of regular 100).

Reorganization. A legal entity can be reorganized by changing its incorporation form (e.g. LLC to JSC or vice versa), merger, acquisition, split-up, spin-off, etc. The resolution of the shareholders to reorganize the legal entity is subject to registration with the public registry. Certain formalities must be respected, in particular, the creditors must be notified and given time to submit their claims. The reorganization process shall not last more than 4 months and its completion is also subject to registration.   

Liquidation. The resolution of the shareholders to dissolve (liquidate) the legal entity is subject to registration with the public registry. The registry immediately notifies the Revenue Service which then decides on the timing of the tax audit. The tax audit can take as long as 90 days. Certain formalities must be respected, in particular, the creditors must be notified and given time to submit their claims.

Corporate amendments, reorganization, or liquidation can be completed remotely with a power of attorney.