Situated in the region of the Caucasus, Georgia is a progressive country where business and industry are concerned. The capital city Tbilisi is a thriving business center with 1.1 million residents. GDP growth is projected for 2022. Data on growth and development show that Georgia is an encouraging country to start a business. In consideration of this, a sole proprietorship in Georgia and related aspects are discussed.
Do You Have to Register Your Sole Proprietorship in Georgia?
Sole proprietors in Georgia must register their business and would be required to obtain certain licenses and work permits and liscences to function in certain sectors. Sole proprietors must register their business by submitting their documents to the House of Justice present in their jurisdiction.
Benefits of Sole Proprietorship in Georgia
A sole proprietorship may be expressed as an independent and small business in plain terms. This business is owned, operated, and managed by a sole (single) individual. The sheer convenience and ease of functioning and operations is what makes businesses that are sole proprietorships popular throughout unorganized sectors of business, primarily among small tradespeople and merchants.
Setting up a sole proprietorship in Georgia offers the following advantages to new business owners:
- The registration process for a sole proprietorship in Georgia is quick, uncomplicated, convenient, and requires little paperwork. So it saves time and effort.
- It takes just a single day to establish a sole proprietorship and receive your digital certificate of incorporation.
- You only have to pay tax on income sourced from Georgia. If you live abroad and your clients are based out of Georgia, you have no liability to pay taxes. Nonetheless, if you work as a consultant and perform your work while living in Georgia, you would become liable for tax payments even though clients are abroad. This is because Georgian tax authorities view that sole proprietor performed the work in Georgia. As long as you adequately follow the steps of registering a sole proprietorship in Georgia, you can be assured that you are aligned with the country’s laws and its taxation system.
- You get access to a superior banking system, and this is one of the main reasons why sole proprietorship is simple here. In many instances of starting sole proprietorships in different parts of the world, processes are simple enough. However, obtaining adequate banking services later is another story. A bank account for a sole proprietorship in Georgia gives you a head start in your business affairs. You can simply open a business account in a bank in Georgia. With seamless online banking services, no controls on capital, etc., Georgian banks offer you smooth operations. Moreover, if you have large funds to invest, you get the services of an exclusive private banker.
- Once you have attained your sole proprietorship, you need to be engaged in a limited amount of paperwork. You don’t need an accountant to file reports every month. All you require is to declare your income returns for tax purposes annually.
- Generally, Georgia is a place of business where invoices are accepted well. There are no obstacles in the way of payment you receive from your clients, as is frequently the case with sole proprietorships in other countries in the EU.
Documents Required for Registering Your Business in Georgia
Sole proprietorship Georgia law states that any individual can start a company in Georgia, whether a Georgia resident or anyone from abroad. However, sole proprietors must provide certain documents for this purpose, and specific paperwork must be approved before a sole proprietorship gets official status in Georgia.
To register any given sole proprietorship company, a sole proprietor must submit the documents stated below to the ‘National Agency of Public Registry of the Ministry of Justice of Georgia’:
- Proof of identity in the form of a national identity card. This is required to begin the process of registering your firm
- An application. This must be submitted to the registration officer at the Ministry of Justice
- An applicable Deed/Agreement/Charter of the sole proprietorship, signed by the sole proprietor. This has to be notarized accordingly
- If the premises of a sole proprietorship are rented, the tenancy document/agreement has to be provided This is the legal address of the firm
- Sole proprietors must pay certain state duties and receipts submitted as applicable
Other Criteria for Registering a Sole Proprietorship in Georgia
The registration procedure of a sole proprietorship in Georgia is undertaken along with income tax registration. A unique feature of the legislation of Georgia is that a sole proprietor does not have to provide any information regarding the size of the company’s capital.
Registration as a sole proprietor/an individual entrepreneur can typically be done in person at any approved bank in Georgia or by physically going to the Ministry of Justice. Other criteria to register your sole proprietorship include:
- At least a minimally prepared docket of documents.
- Language can be a barrier to your undertaking. So you must find a translator to communicate adequately
- Filing registration and paying state duties are a must for the registration process to be completed promptly
- You have to have separate applications for VAT registration, and this must be paid in advance, the applications of which get filed with the ‘Taxation Revenue Service of Georgia’
How to Register a Sole Proprietorship Company in Georgia
Registering a sole proprietorship in Georgiais not a challenging task and can be completed quickly, in a day,. The main document you should provide to the Government of Georgia is your company charter with all the necessary details mentioned, such as the business entity’s name, its official form (sole proprietorship), the company address, email ID, etc.
Here is the process detailed for you:
- The first step in registering your sole proprietorship company is to pay your registration fee. This is important as it makes you officially recognized as a company’s sole proprietor. You can pay the registration fee (approximately amounting to GEL 100) at any authorized bank in Georgia. To do this, you must have your documentation with you. You must notarize your documentation.
- After paying the fees for registration, you may now head over to the ‘Entrepreneurial Registrar’, situated at the National Agency of Public Registry. From here, you will obtain a distinctive identification number. This is to differentiate your sole proprietorship from other businesses in Georgia and officially give you status as a business owner. You can complete this task on the same day as payment of your registration fee. Moreover, there is no charge attached to this process. During the performance of this step, you will also be able to attain your ‘certificate of state’ and your details of tax registration. To complete this process, you will have to produce your registration receipt and an application for a registration copy.
- The final step you need to undertake, not just for registration, but one that officiates you as a sole proprietor, is to open a corporate/business bank account. You can only do this once you have paid the required sole proprietorship taxes in Georgia. This step marks the end of your registration journey and the beginning of your business venture.
How Can Multiplier Help
It is fairly obvious that sole proprietors in Georgia can easily register their business. However, as with any company, sole proprietors must perform employee onboarding and payrolling. These processes must be straightforward without any hiccups.
Here’s where an EOR-PEO solution like Multiplier can help. Our SaaS-based platform can help you employ talent from anywhere and generate employment contracts compliant with local labor laws. Our one-click payroll solution helps you pay employees promptly without the risks of payroll inaccuracy.