When you have already understood what niche you want to occupy in the Georgian market and have registered a company, now you are just at the beginning of your long journey. In order for the path to be not only long but also successful, it is necessary to take into account the administrative issues that can darken it. We suggest you briefly familiarize yourself with a list of 9 steps that are best done immediately after registering an LLC in Georgia.
1. Open a bank account
Any company that enters the Georgian market needs to open an account in a Georgian bank, get access to all the necessary tools - Internet banking, acquiring, business cards, etc. in order to conduct a full-fledged entrepreneurial activity. - fast and reliable. Non-residents of the country can also open an account in a Georgian bank remotely in an accelerated mode. First of all, you need to decide on the bank in which you want to open a current account and come to the bank branch with the documents. But if you do not know which bank is best for you and cannot visit the bank on your own, then you can turn to professionals who will help you in choosing, because they know all the intricacies of the banking system and are aware of the latest banking news.
A full-fledged account in a Georgian bank can be opened remotely for a resident of almost any country, in order to confirm the identity and receive all the tools - login, password from the Internet bank, digipass application codes, as well as a multi-currency bank card, the director of the company does not need to personally come to Georgia, but it is enough to issue power of attorney for a professional lawyer. In the case of registering a business with the help of our company's specialists, preparing a draft power of attorney, opening a multicurrency bank account, and transferring all banking instruments is an obligatory part of the basic package of services.
2. Get the electronic status of a tax payer and, if necessary, register for VAT
Registration of the company with the tax office is mandatory. The director of the company or his representative by proxy must have access to the electronic portal rs.ge (login and password). Through the electronic cabinet, all communication with the tax service and the submission of all tax returns for the following types of taxes takes place:
- VAT - 18%;
In accordance with tax legislation, 18% VAT arises when the company's turnover reaches 100,000 GEL (about $ 30,000).
That is, the company automatically becomes a VAT payer and is obliged to send an application to the tax office for obtaining this status, submit declarations and pay the specified tax.
At the same time, you can register as a VAT payer at any time, even immediately after the registration of the company, if, for example, your activity involves the import of products and it is advisable to reimburse the so-called input VAT paid at customs. If you do not register in such a way, an entrepreneur can lose tens of thousands of dollars when importing products into the territory of Georgia.
The correct choice of the taxation system is the basis of tax optimization. As in the case of VAT, and with any other type of taxes, it is important immediately - at the initial stage, to decide on the tax policy of the company together with professionals who know all the intricacies of taxation in practice. The percentage rate of other taxes in Georgia (for more information about taxes, follow the link):
- on the profit of the organization - 15%;
- for dividends - 5%;
- income tax - 20%;
- import tax - 0% or 5% or 12%;
- withholding tax - from 10 to 15%.
Access to the tax office also makes it possible to submit declarations on pension contributions, which the company is obliged to pay when hiring Georgian citizens.In the case of registering a business with the help of our company's specialists, preparing a draft power of attorney, registering a company with the tax service, and transferring access to the electronic portal rs.ge is a mandatory component of the basic package of services.
3. Check if a license is required
It is better, of course, to familiarize yourself with the information on the areas of licensing in Georgia before registering a company. But you can do it after. In addition, when you transfer your activity to Georgia or open a branch and have a permit or license issued by your state of residence for commercial activities, then it may also be valid on the territory of Georgia. For this information, you need to contact the appropriate authorities in your country.
Special permits and licenses to carry out commercial activities in Georgia are required for companies related to gambling, communications, medicine, energy, security, and construction. The list of all licensed activities is contained in the Law 'On Licenses and Permits'.
You can be fined for activities without a license or in violation of its terms. Without knowledge of the legal requirements of another country, the risk of errors is very high. If, as a result of your activities without a license, large damage is caused or income is received on a large scale, then criminal liability is also possible. Therefore, it is important to competently study all the main issues and subsequent legal support.
4. Appoint a manager, conclude an agreement
When registering a company, it is mandatory to register the director of the company in the charter, he can be either the founder (resident/non-resident, it does not matter) or the appointed person. It is also possible that two directors are registered in the Register at once. Their powers are fixed by the charter, for example, you can set limits on the number of transactions in the bank for one director or make two managers equal in rights.
In practice, when starting a business in another country, you need a competent leader, for example, a local director who understands the specifics of the market will take over personnel management and other managerial issues.
In 2021, the conclusion of a written contract with the director is not mandatory after the probationary period. At the same time, the probationary period can officially be up to 6 months, which must already be fixed in a written agreement for the probationary period. For the tax and labor inspectorates, any transfer of wages is already an indicator of the existence of an employment relationship between the employer and the employee.
5. Start keeping accounting records
Electronic accounting is a mandatory requirement of the tax service, that is, all company operations must be reflected in the accounting program in the form of transactions. The correctness of tax reporting and correct planning of further work depends on competent accounting. This requires:
- Collect all primary documentation;
- Submit declarations for all types of taxes, on the basis of which payments are made with the treasury;
- Forming financial statements that allow you to objectively control the company's financial flows, both income and expenses;
- Conduct an annual audit;
- Keep track of the wages of company employees.
All this generated information may be required in banks or other services related to the company's activities.
You have the choice to do it all independently at your own peril and risk without detailed knowledge of Georgian legislation. Or hire a staff member, which at the initial stage of the business may simply not pay off, because the volume of work will not be great, and a full-fledged work unit in your team requires the organization of a workplace and a monthly salary. An outsourced accountant can close all these issues without creating new difficulties. We have examined the topic of remote accounting in more detail in this article. The main thing to remember is that without competent accounting, the development and success of a business will be at risk when faced with the very first tax audit.
6. Register full-time employees
When opening a business in Georgia and hiring employees - both residents and non-residents, in order to avoid any disputes, it is necessary to work out labor contracts in detail based on the requirements of Georgian legislation. Errors and delinquencies in the process of labor relations between the employer and the employees are inevitable. They arise most often due to the fact that not everyone is familiar with the legislation in detail and each situation is unique.
On the one hand, the conclusion of a written employment contract is not a mandatory requirement of the Georgian legislation, while for the correct and competent building of the employer-employee relationship, we always recommend that you draw up such an agreement and write in it:
- Employee's position;
- His functional responsibilities;
- Working conditions and remuneration;
- Additional conditions, such as paying for health insurance as a bonus;
- Details of the parties, including data on bank accounts.
It should be understood that written agreements between the parties will always be a more significant guarantor of mutual understanding than oral agreements.
7. Order an LLC seal
Despite the fact that in Georgia the majority of state organizations accept and issue documents in electronic form, there is no obligation of the so-called “wet” seal when processing documents, for business, it is an important and status step to issue a company seal.
The process is as simple as possible, you just need to contact one of the most convenient printing houses, indicate the company's identification code, and give its logo to the master, if necessary. The print will be ready with you within 30 minutes.
An interesting fact - when buying a seal, you do not need a power of attorney from the company; in principle, there is no need to confirm your position in the company. Printing can be done in minutes at your request remotely and sent anywhere in the world.
8. Buy a cash register
If you plan to accept cash payments from your customers, a cash register is really necessary in your case. For any cash payment, you need to punch a check and close the cashier with the so-called Z-report at the end of the day.
The cash register in Georgia is the most simplified tool, it is automatically tied to the tax office and you do not need to send reports to the accountant every day, the reports are visible to him online.
Banks also offer to combine cash desk and acquiring (payment by bank cards) and provide special devices that combine both of these functions. The cost of a cash register starts at $ 130, and its service starts at $ 20 per year.
9. Register a trademark
Trademark registration is, first of all, the protection of your intellectual property and brand. The advantages of a trademark are an objective opportunity to avoid the consequences of unfair competition. By registering this mark, you get exclusive rights to it and the confidence that further financing of your project will take place without risk.
Sakpatent is in charge of registering a trademark in Georgia. Consideration of an application for registration of a trademark consists of two stages:
- substantive examination.
The time frame is determined by the amount of the paid fee, so, for example, the cost of the accelerated procedure (10 working days) is $ 840 (equivalent in GEL).
Of course, this is all just the beginning. Your path will consist of many further steps in the form of finding an office and arranging it, selecting and checking contractors, finding ways to advertise on the local and global market, and much more. Having correctly calculated your strengths, you will understand that it is better to take off tasks that are not directly related to the activities of the business and delegate them to professionals who will competently solve them faster and more efficiently. Fill out the form below to get a free consultation and answers to any questions, including the steps that should be taken immediately after registering an LLC in Georgia.