Business Opportunities in Georgia
Georgia was once part of the mighty Soviet Union, but it slowly progressed as an independent state after the country gained its independence. The geographical setting makes it an ideal nation to start a business in Georgia, as it is located between the European and Asian countries on the Black Sea. Such a strategic position supports the country’s economic growth, which eventually eases setting up a company in Georgia.
The agricultural sector of Georgia employs around 53% of the state’s labor force; therefore, the majority workforce is engaged in producing fruit, nuts, cucumbers, crops, tea, etc. The machinery used in agriculture and related processing activities is in high demand. With technological advancement, IT, software, and systems are required to assist emerging business growth, which supports setting up a company in Georgia. Tourism is a growing industry as around a million tourists visit Georgia annually. The tourism industry is a very attractive business in Georgia which encompasses around $313 million as profit every year.
Benefits of Starting a Business in Georgia
There are several benefits of incorporating a company in Georgia; major ones among them are:
Business-Friendly Regulations and Taxes
Among the major benefits of setting up a company in Georgia is the implementation of the business-friendly regulations and taxes by the government. When you start a business in Georgia, the tax rates you need to pay are somewhat similar to the personal income tax rates. Although the companies need to settle the state sales tax and local sales tax levied by the respective governments. Nevertheless, the regulations are simplified to ease the requirements to do business in Georgia,
The next benefit of having a company registration in Georgia is that you can seamlessly interact with the supportive business communities. The networking organizations of Georgia are very strong; they help in collaborating the entrepreneurs with the mentors and support them get potential funding and related assistance. With the best-in-class support from the entrepreneurs and mentors, your plan to start a business in Georgia would be highly simplified.
Though traditional funding methods for your business may be very challenging to execute in Georgia, however many current forms of funding institutions and groups finance the start-ups looking forward to setting up a company in Georgia. The country has a pool of angel investor communities, majorly working with the development sector to support emerging businesses. Several venture capitalists have a keen interest in funding viable business start-ups.
Options of Different Industries
Georgia has diversified geography; this is the reason that the state provides an opportunity for different industries to start a business in Georgia. There are high chances of getting a place in the market, irrespective of the industry your international business belongs to. Doors to a wide range of industries like aerospace, agriculture, IT, energy infrastructure, logistics, and manufacturing are open for global businesses. Georgia is known to be one of the most affordable places to carry on business operations, irrespective of the industry to which the business belongs.
Requirements for Starting a Business in Georgia
The following requirements need to be fulfilled to start a business in Georgia:
- Name of the business/corporation or a legal name reservation number
- Name and address of the person who is applying for the business
- Email address
- The mailing address of the principal business office
- Name & address details of the registered agent
- Name & address of the incorporator
- A registered method of payment. The form of payment for your business can be a credit card, cheque, cashier cheque, or money order.
Types of Business Structures in Georgia
The major types of business structures preferred in Georgia are as follows:
To establish a general partnership with Georgia, there is no need to file any organizational documents with the country. Although it’s not legally binding, all partnerships should have a written partnership agreement. It helps in case of dispute among the partners.
To form a sole proprietorship in Georgia, there is no requirement to file any organization-related documents with the government.
Limited Liability Company (LLC)
The filing of Articles of Organization with the Georgia SOS is important to establish an LLC. A registered agent must be appointed in Georgia to process the business operations. To form an LLC which professionals generally form, you must signup for a Limited Liability Partnership Election in the clerk’s office of the superior court of the parent county where the partnership has an office.
Articles of Incorporation need to be filed with the Georgia SOS to form a corporation. A registered agent is required to be appointed in Georgia to look after the service of the process. Corporations are also mandated to file Form 2553 of the Internal Revenue Service (IRS).
Company Registration Process in Georgia
In order to start a new business in Georgia, you need to comply with the following points:
Choosing a business idea based on the consumer and industry requirements. You need to draft a business plan that fulfills the business idea’s objectives.
Next, you need to decide the legal structure of the business and get it registered. The most common legal structures for the business can be:
- Limited Liability Company (LLC)
- Sole Proprietorship
You need to choose a unique business name. Business registration in Georgia for LLCs and corporations should have a distinguishable name, different from the ones already registered with the Secretary of State (SOS) of Georgia.
Different licenses and permits need to be taken. This list of applicable registrations permits includes:
- Employer Identification Number (EIN)
- Tax registration
- Health and safety permits
- Environment clearance
- Building and construction permit
- Other specific permits related to the business industry
You need to finalize a location for your business. The location should comply with all the rules of the local zoning regulations.
Any new business expanding in Georgia needs to file and report the taxes prescribed by the Georgia State Business Income Tax regarding the business taxes in Georgia.
The company incorporation in Georgia requires the business’s general liability insurance since these policies shield you against claims regarding property damage or physical injuries to the employees.
All businesses should operate through a business bank account that looks after your liability protection.
How Much Does It Cost to Incorporate a Company in Georgia?
Within 90 days of incorporation, every corporation in Georgia has to file initial annual registration fees. This registration fee is around $50 for professional and profit-seeking corporations, and it’s around $30 for non-profit organizations. This means that the corporations registered between 2nd October and 31st December are liable to file an initial installment of annual registration between 1st January and 1st April of the following calendar year.
Are Foreigners in Georgia on Certain Passes Allowed to Start a Business in Georgia?
Presently the Georgian government has a highly simplified business registration procedure for foreigners. With an objective to promote new enterprise establishment, the country has made several modifications related to the ease of doing business. Therefore, the risks associated with passport issues, currency control, and other corporate measures have been done away with.
These are why a notable number of entrepreneurs globally consider Georgia as the base to extend their business or plan to establish new companies to benefit from the preferential bonuses provided through asset protection and reduced tax slabs. The Law titled “About Entrepreneurs” of Georgia has simplified the business registration process for foreigners, and the regulations are now similar to the ones followed by the Georgians.
Government Assistance for Foreign-Owned Businesses
After completing the company registration in Georgia, multiple business tax credits are available to benefit your company. These credits provide savings and growth opportunities to the business.
- Mega Project Tax Credit: Once you register a new company in Georgia, this credit assistance will be available to you, especially if you provide employment to a minimum of 1,800 new employees. This credit is also valid for companies that invest a minimum of $450 million in Georgia.
- Work Opportunity Tax Credit (WOTC): This type of tax credit is managed by the Department of Labor of Georgia and is incorporated into businesses that hire individuals who face barriers to getting employment. The tax credit varies from $1,200 to $9,600 per qualified employee.
- Job Tax Credit: This credit facility helps the merging businesses and start-ups in Georgia to assist the business growth through job creation. This type of job credit saves $1,750 per job when the annual tax savings are considered. This credit facility depends on the business location of the company. This credit can be taken forward for up to 10 years if it remains un-utilized
How Can Multiplier Help?
Although the authorities and the trade collaboration in Georgia have created a friendly business environment, the difficulties of new geographies, regulations, and tax laws make new business incorporation a bit complicated without an HR consultant.
Suppose you wish to start a business in Georgia or test the Georgian market for your business; the global employment solution of Multiplier will surely simplify your expansion process. Multiplier helps you expand to new markets, no matter how complex the regulations might be. You can easily employ a talented and efficient workforce without the risk of violating any legalities or labor laws. You can talk to Multiplier experts to know more in detail.