Increase in the number of companies registered by foreign citizens in Georgia
Over the past few years, the number of legal entities registered in Georgia has increased significantly. On September 17, 2024, the Free Information Development Institute published a report on the number of legal entities registered in Georgia since the beginning of 2022. More than 50% of such companies were founded by foreign nationals. This number includes companies founded not only by foreign individuals, but also by foreign legal entities. In the practice of REVERA Georgia, there have been many cases when the main beneficiary of a Georgian company was a foreign legal entity. Most often, this situation arises when opening a branch/representative office of a foreign company in Georgia.
So, as of June 24, 2024, companies with active status amount to 257,245 and are present in almost all sectors of the economy:
- Power engineering;
- Nutrition;
- Construction;
- Pharmaceutics.
| This is not surprising, because Georgia is characterized by the simplicity and speed of the company registration procedure, and in addition, the absence of taxation before the distribution of dividends. All this makes Georgia an attractive place to start a business. |
In the foreseeable future, there is a trend towards the introduction of a corporate management system, when one legal entity performs management functions in another. Georgian legislation does not prohibit corporate management, and companies prefer to switch to this method of management due to the possibility of checking counterparties in the Register of Entrepreneurs.
Georgian banks also plan to adapt their internal systems to interact with companies managed by other companies. For example, a bank manager assigned to one company will also be assigned to the managed company for the effectiveness of interaction. Many American, European and Asian banks are free to work with Georgian companies when making bank payments.
As a result, the ease of starting a business, together with the development of corporate governance services and the involvement of banks in these processes, in our opinion, will cause an even greater expansion of the presence of foreign business in Georgia.
If you are also considering Georgia as a place to register a company, our lawyers will be able to help you not only with the necessary documents and procedures, but also with the structuring of partnerships.
Author: Levan Pogosov
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