Important Note About Starting Business In Georgia
Starting Business In Georgia | Principal Business Entities
About (LLC/LTD) Company
LLC/LTD is the abbreviation of Limited Liability Company/Limited Company.┬áStarting business in Georgia can be done even with single shareholder and up to 50 shareholders. The capital amount of the company is broken into the defined share value and the shares are distributed equally among all the shareholders. The members of the company are liable for the debts of the company. If the company has been formed with single member then the member cannot leave the LLC company.
The company should have minimum one director and maximum of unlimited directors for starting business in Georgia. The company can be managed by multiple directors and the major decisions of the company can be taken by the single director or the board of directors with the presence of shareholders of the company in the annual general meet. By any chance, the director of the company causes damage to the company then the director is personally responsible for the losses.
There is no minimum limit defined for the share capital of the company but authorized capital is mandatory for successfully starting business in Georgia. The company members can choose the amount of capital as per their interest.
Starting business in Georgia can be made within two working days.
About Joint Stock Company (JSC)
Joint Stock Company is also known as JSC┬á is another form of┬ástarting business in Georgia in which the shares of the company has to be registered with the GSE (Georgian Stock Exchange). The company can be formed with single founder member and the shareholders who have purchased the shares of the company are not liable of the companyÔÇÖs debts.
There is no defined minimum limit for the share capital for such companies but it needs to have the authorized capital which can be decided by the shareholders. Payment of the contribution at the time of company registration is not a mandatory rule. Contributions can also be in the form of kind. In case the company shareholders increase more than 50 members then in such scenario the registration of the exceeding shareholders is made in independent register. If it is not there then the details and evidence of the same should be kept by the company.
The annual general meet is the important event in which all major decisions related to the company are taken in the presence of shareholders. However, for day to day activities, the decision is taken by the director or the board of directors of the company.
In case the number of shareholders of the company exceeds the number of 100 which is registered with the stock market or financial monitoring agency then in such cases a supervisory board is implemented. The supervisory board can have at least 4 and maximum of 21 members.
About General Partnership
General Partnership is a commonly used form of┬ástarting business in Georgia in which two or more partners jointly perform business in agreement to personal liability for debts and incomes on the partnership. All the partners in the business have the right to take decisions.
A Limited Partnership
The limited partnership is also a form of starting business in Georgia in which two or more people jointly work in positions of the company. Different positions in the company can be like a General Partner – whose liability is unlimited and Silent Partner – whose liability is limited as per contribution made. The major decision making authority lies with the General Partner in such setup.
Foreign Exchange Controls
There is no limit or restriction over the foreign exchange in Georgia for importing or exporting the capital. The amount sent can be in any currency. If the amount is sent to any local resident of Georgia then it has to be converted in GEL. And residents as well as non-residents of Georgia should have a bank account with any currency.
There are transfer pricing rules defined in the tax legislation of Georgia which is followed as per the guidelines specified in the OECD. There are certain tax provisions which are provided at regulating the taxation of transactions between related persons. The tax authorities can challenge related party transactions where the price agreed between the parties is diverges from the market value.
Based on the transactions between a resident company of Georgia and a foreign company that is incorporated in low-tax jurisdiction, the pricing rules are applied.
Controlled Foreign Companies
There will be no CFC rules after┬ástarting business in Georgia.