IE or LLC Formation Cost in Georgia: Estimations for 2022

In the eyes of investors and entrepreneurs, the business environment and incentives in Georgia (a country in the Caucasus) are the best in the region. The simplicity of company registration, high-level confidentiality, and tax incentives are similar to offshore offers. Fortunately, however, this jurisdiction is not black/greylisted by FATF and other international alliances.  To correctly estimate and compare the advantages of setting up a business in this country, one should appreciate the lean level of IE or LLC formation costs in Georgia.

IE or LLC Formation in Georgia 

In 2021, according to the World Bank Doing Business ranking, Georgia ranked 2nd in Europe and 7^th in the world by the ease of doing business. Thus, for the 4th year in a row, Georgia has remained on the Top 10 list of business-friendly countries. The most popular types of business structures are Individual Entrepreneurship (IE) and Limited Liability Company (LLC). As of April 1, 2022, out of 211,033 active business entities there were:

• 81,079 LLCs  (38,42%)
• 121,183 IEs (57,42%).

IE or LLC formation in Georgia is very easy, whether they are registered by private persons or legal entities, nationals or foreigners. The House of Justice processes all applications for registration within 2 days. The documents can be filed either in person or remotely, i.e. through an authorized representative. During the months of the COVID-19 pandemic control measures involving travel restrictions and social distancing, the opportunity to apply by a proxy was especially advantageous.

Your IE or LLC formation costs in Georgia will depend on the urgency of the registration and the particular choice of the business structure type (the rates quoted below are dated 16.05.2022):

Registration timelines	IE, fees in GEL (and in $)	LLC, fees in GEL (and in $)
on the day of the application	50 (~17)	200 (~67)
on the day after the application	20 (~7)	100 (~33)

There are only 2 issues a foreigner may encounter when applying for IE or LLC registration:

• the need to prove a legal address in Georgia
• the need to compile and file application documents in the Georgian language.

Your first IE or LLC formation costs in Georgia

Your first IE or LLC formation costs in Georgia involve the following basic items:

• preparation of constituent documents
• preparation of a Power Of Attorney (if the registration is carried out through an authorized representative)
• dispatch of documents by international mail (if the registration is conducted through a trusted representative)
• lease of a legal address.

To visit Georgia in person during a pandemic is a sophisticated venture. One needs to follow the procedure and meet the requirements for crossing the border. In 2021, a mandatory 8-day quarantine was required. In 2022, for now, it is sufficient to present a certificate of vaccination with any type of COVID-19 vaccine (2 doses of any 2-component vaccine or 1 dose of the J&J COVID-19 vaccine) or the Proof of a negative pre-entry PCR test done within 72 hours before entry. However, the latter option also requires the traveler to be retested on the 3rd day of stay. The average cost of a PCR test is 150 GEL.

Time and money-wise, getting your IE or LLC in Georgia registered remotely through an authorized agent is more reasonable than trying to arrange everything on one’s own during an in-person trip to Georgia.

IE formation costs in Georgia in 2022

IE formation costs in Georgia depend on the business revenues and other variables. The basic expenses include administrative and tax-related costs:

Taxes payable by IEs in Georgia 

The taxes payable by individual entrepreneurs in Georgia depend on the status of the taxpayer. The list of the main taxes and rates is as follows:

IEs in Georgia selling excisable products are liable to pay the excise tax at the rates relevant to the types of the products.

In practice, an IE with the status of a Small Business holding an account with a payment system or a foreign bank is the most profitable business entity type for business activities under foreign contracts worth not more than $100,000 / year. For example, this option can be a very favorable solution for an Estonian IT company paying salaries to its employees registered as Georgian IEs.

IE’s administrative costs in Georgia

Banking and operating expenses of an LLC and an IE are computed in the same way. Standard taxes for all legal entities in Georgia are as follows:

• corporation tax on distributed profits – 15%;
• tax on dividends – 5%;
• VAT – 18%;
• Property tax – up to 1%;
• customs duties – 0/5/12%;
• excise tax.

It may seem that foreigners have little interest in Georgia’s domestic market, due to its small size and the shortage of solvent consumers. However, for most international investors, the jurisdiction is interesting as an excellent gate to international markets. Exporters of goods manufactured in Georgia can enjoy a preferential status that reduces tax rates to almost 0%.

In addition to the above expenses, companies registered in Georgia incur the following costs, depending on their special status:

All of the above calculations are approximate, but they allow estimation of the breakeven threshold and the possible profitability of an LLC or IE registered in Georgia. 

If you need more specific data and references on IE or LLC formation costs in Georgia, please contact us for an online private discussion with an expert. Just fill in the booking form, or write to our e-mail address and messengers given at the top of this page.