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Doing business in Georgia. Discover new opportunities

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1. Georgia at a glance: tax and legal system & Investing in Georgia
2. Banking in Georgia: general overview and features of the banking system
3. Free industrial zones in Georgia. Make your business tax-free   
4. Georgia as an attractive non-EU hub for international business structuring. Georgian “Virtual zone entities” for IT business sector

5. Citizenship and residency in Georgia: requirements, procedure, costs. Tax residency in Georgia and its benefits.

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Doing business in Georgia. Discover new opportunities

  1. 1. Doing business in Georgia. Discover new opportunities Date: 18 October 2017
  2. 2. CONTENT I. Georgia at a glance: tax and legal system & Investing in Georgia II. Banking in Georgia: general overview and features of the banking system III. Free industrial zones in Georgia. Make your business tax-free IV. Georgia as an attractive non-EU hub for international business structuring. Georgian “Virtual zone entities” for IT business sector V. Citizenship and residency in Georgia: requirements, procedure, costs. Tax residency in Georgia and its benefits.
  3. 3. I. Georgia at a glance: tax and legal system & Investing in Georgia
  4. 4. General information about Georgia:  Location: South East Europe  Area: 69,875 km²  Population: 3,720,400 (2016)  GDP: $37.38 billion (ranking 113 out of 186 under World Bank rate 2016)  GDP per capita: $10,100 (ranking 102 out of 178 under World Bank rate 2016)  S&P 2016 BB- (stable); Moody`s 2016 BB (stable); Fitch 2016 BB- (stable)  Easy of doing business: ranking 16 out of 190 under the Doing Business 2016 by World Bank  Corruption index: ranking 44 out of 176 under the Corruption Index 2016 by Transparency International  Best countries for doing business: ranking 43 out of 139 (Forbes list 2016) Georgia at a glance: tax and legal system & Investing in Georgia
  5. 5. General information about Georgia: • “Largely compliant” rated (Global Forum on Transparency and Exchange of Information for Tax purpose, August 2017) • Georgia committed to BEPS package (actions 5, 6, 13, 14) • Georgia is not a part of CRS on AEOI • DCFTA with the EU • GSP agreement with USA, Norway, Switzerland, Canada, Japan • FTA with CIS countries and Turkey Georgia at a glance: tax and legal system & Investing in Georgia
  6. 6. Tax system overview:  PIT standard rate: 20% (5% for dividends, interest, royalty, rental income, income from the sale of vehicle or residential apartment with an attached land plot)  CIT standard rate: 15% (only on distributed profits)  VAT: 18%  Excise tax: varies from product to product  Import Tax: 0%, 5% or 12%  Property Tax: up to 1% Georgia at a glance: tax and legal system & Investing in Georgia A company is a Georgian tax resident if it is incorporated or effectively managed in Georgia / An individual is resident in Georgia if he is present in Georgia for at least 183 days in a period of 12 consecutive months, ending in the tax year (*special terms for high net wealth individuals) No GAAR, no CFC, no thin cap rules
  7. 7. Georgia at a glance: tax and legal system & Investing in Georgia UKR co GE Holding co CY Holding co 75% 75% Dividends, WHT: 5% Dividends, WHT: 5% Dividends are exempt from CIT Dividends are exempt from CIT 54 active DTT between Georgia and other countries (DTT with Russia is not effective)
  8. 8. Georgia at a glance: tax and legal system & Investing in Georgia Investment opportunities:  Hospitality/Real estate  Energy and mining  Industrial manufacturing and agribusiness  Transport, logistics and FIZ  Innovation and technology, start up Top reasons to invest in Georgia  Political stability  Silk Road entry point  Stable banking sector  Investor friendly  Ease of doing business: Ranked 16th of 189 by World Bank, 2016  Cost effective and productive skilled and semi-skilled labour  Safe, supportive and attractive environment for families  Trade and logistics access to Europe, Asia, Central Asia and Middle East  Low cost of living  Simplified visa and residence procedures
  9. 9. AXIS TOWERS Industry: Hospitality and Real Estate Georgian Co-Investment Fund Project Description: Axis Towers is one of Georgian Co-Investment Fund`s Investment projects in Hospitality and Real Estate. Axis Towers is a multifunctional complex located at the prime residential location in Tbilisi. Total investment size: USD 83 mln. The tallest twin skyscrapers of Tbilisi will feature 5* Hotel Pullman (Accor Group), A-class offices, retail and residential spaces. Total buildable area: 94,000 sq.m. Equity investors: GCF: 50%; Axis: 50% The main construction works are underway. The grand opening is scheduled for 2017 Opportunity for the investor: acquire up to 100% of GCF equity share. Georgia at a glance: tax and legal system & Investing in Georgia
  10. 10. Variety of HPP Projects Industry: Energy (Hydro) Ministry of Energy of Georgia Ministry of Energy has prepared pre-feasibility studies for potential 95 HPP projects divided into two categories: • 70 projects from 1 MW up to 13 MW – total 464 MW and USD 1 billion investment • 25 projects from 13 MW up to 100 MW – total 761 MW and USD 1.5 billion investment Total installed capacity: 1225 MW Total investment volume: USD 2.5 billion Projects are ready to be offered to potential investors for further development Georgia at a glance: tax and legal system & Investing in Georgia
  11. 11. HOTELFRIEND Industry: Software Platform Tbilinvest JSC Description: HotelFriend is the first hospitality software platform, which provides a solution for every step of the travellers' journey: room booking, mobile concierge, hotel management system. At the moment, HotelFriend is on testing phase working with 59 hotels in Germany. Company plans cooperation with German Hoteliers Association cover all members in Germany (85.000 hotels) in 2017. Company`s locations are in: Georgia, Germany, Ukraine. Business proposal: Company offers to investors 15% share for 10 Mil USD. Georgia at a glance: tax and legal system & Investing in Georgia
  12. 12. II. Banking in Georgia: general overview and features of the banking system
  13. 13. Banking in Georgia: general overview and features of the banking system ΚEY FACTS  Central bank is the National Bank of Georgia  Official currency: Georgian Lari (GEL)  NBG sets monetary policy, issues licenses, and supervises the activities of banking institutions and currency exchange offices  The banking system consists of  domestically based small- and medium-sized banks (including subsidiaries of foreign banks) most of which are based in Tbilisi; and  two foreign banks with branches (Turkish Bank Ziraat and the International Bank of Azerbaijan)  As of January 2017 the total assets of the country’s commercial banks were around $12.4 billion (according to NBG)  Average interest rates: deposits – 12%, all loans – 14%, credit cards - – 28%
  14. 14. Banking in Georgia: general overview and features of the banking system  Prudent regulation ensuring financial stability High level of liquidity requirements from NBG at 30% of liabilities, resulting in banking sector liquid assets to client deposits of 40% as of 31 December 2016  Resilient banking sector - no tough currency control rules. Funds in foreign currencies can be received on accounts and transferred from accounts via Internet banking. Transactions above GEL 30 000 require underlying documentation to be submitted to the bank - demonstrated strong resilience towards both domestic and external shocks without single bank going bankrupt; - no nationalization of the banks and no state ownership since 1994 - very low leverage with retail loans estimated at 28% of GDP and total loans at 54% of GDP as of the end of 2016, resulting in low number of defaults in face to different shocks to the economy - сredits from commercial banks are available to foreign investors as well as domestic clients
  15. 15. Banking in Georgia: general overview and features of the banking system
  16. 16. Banking in Georgia: general overview and features of the banking system List of Operating Commercial Banks Operating commercial banks in Georgia and their ownership 1. TBC Bank (Georgian and international shareholders) 2. Bank of Georgia (Georgian and international shareholders) 3. Liberty Bank (Georgian and international shareholders) 4. Basisbank (China) 5. VTB Bank – Georgia (Russia) 6. Cartu Bank (Georgia, B. Ivanishvili) 7. ProCredit Bank (Germany) 8. Silk Road Bank (Kazakhstan) 9. The International Bank of Azerbaijan – Georgia 10. Ziraat Bank Georgia (Turkey) 11. Isbank Georgia (Turkey) 12. TeraBank (UAE, Sheikhs) 13. Halyk Bank Georgia (Kazakhstan) 14. PASHA Bank Georgia (Azerbaijan) 15. Finca Bank Georgia (USA) 16. Credo Bank (Int`l investors)
  17. 17. Banking in Georgia: general overview and features of the banking system Account opening in Georgian Banks – general overview  opening account to Georgian legal entities (in several currencies at once) takes 1 business day. The legal entity chooses the servicing bank at the moment of its state registration and the state registrar delivers the information to such bank on the same day.  Georgian banks open multicurrency accounts to foreign citizens, based on the passport or the duly certified PoA of the representative, with issuance of the payment card and access to Internet-banking  accounts opened to legal entities allow clients to make unlimited transfers in various currencies worldwide; make currency exchanges; pay bills; access funds anytime. No initial deposit and no minimum balance is required for company account. Active accounts have no term limitations
  18. 18. Banking in Georgia: general overview and features of the banking system Banks with which Eurofast cooperates on account opening to foreign clients  Bank of Georgia  TBC Bank  Liberty Bank  ProCredit Bank  Silk Road Bank
  19. 19. BANK Business activities Company structure Transactions Specific bank requirements Counterparties Introducer Banking in Georgia: general overview and features of the banking system What to do?
  20. 20. Banking in Georgia: general overview and features of the banking system Account opening by foreign clients. Issues to note  Georgian banks open accounts to foreign clients with or without their connection with Georgia (depends on each particular bank)  Some banks open accounts to offshore companies, on certain conditions  One may open a corporate account for a company dealing in gaming, dating, forex, as well as other “sensitive” fields of business activity  Georgia is not committed to CRS, no AEoI. No restrictions of other countries on accepting/withdrawing of funds from/to Georgian banks !Risk: Georgia may join CRS in future; There may be restrictions of banks on accepting/withdrawing of funds from/to Georgian banks (e.g. Luxemburg) NB! Georgian banks adhere to the BASEL guidelines as to the banks` corporate governance, have strong AML procedures in line with the legislation, assess clients based on (in particular) US FATCA and take into account their foreign shareholders` requirements
  21. 21. Banking in Georgia: general overview and features of the banking system  increased client pre-check procedures are applied. FATCA questionnaire  transfers from Iran, Syria, African and other blacklisted countries are not accepted by the bank  bank opens accounts to various foreign clients, including offshore clients and recently started to require foreign clients to have connection with Georgia  if the foreign client opens deposit account (around $400 000), the account opening procedure will by much more easy and quickly. After that the client may easily open the transactional account  may accept “sensitive activity” and risky activity clients if this is a real clear business of the client and the client and UBO does not have several other activities which are not connected between each other. But the opening procedure would be longer, and more additional questions will be asked.
  22. 22. Banking in Georgia: general overview and features of the banking system Consumer digital banking of TBC Bank has been recognized by Global Finance Magazine for the Best SMS/Text Banking 2015 in CEE region. Best Integrated Corporate Banking Site in CEE 2015  does not open accounts to offshore companies  does not open accounts for certain risky activities, including crypto-currencies issuance and trading  main condition – availability of the client`s connection with Georgia (through business establishment, subsidiary, contracts with local counterparts, etc)  no account opening to the client registered to or having any connection with Siria, Sudan, South Korea, Libya. Iranian clients may open only GEL account  the total process takes up to 4 weeks. Pre-check based on scans of original documents  special forms to be completed by US companies and US beneficiaries · ·
  23. 23. III. Free industrial zones in Georgia. Make your business tax-free
  24. 24. 4 FIZ operate in Georgia:  Poti FIZ, operated by Rakia Georgia FIZ LLC  Kutaisi FIZ #1, operated by Georgia International Holding (LLC Fresh Georgia)  Kutaisi FIZ #2, operated by Hualing Group  Tbilisi FIZ, operated by Tbilisi Free Zone JSC (subsidiary of BitFury Group) Free industrial zones in Georgia. Make your business tax-free
  25. 25. Benefits of FIZ:  Special economic and legal regime  Special taxation regime  Simplified procedures for obtaining licenses and permissions  No currency restrictions  Cheap Labour – no minimum wage regulations  100% foreign ownership allowed  No minimum initial capital required  No minimum investment required  No mandatory accounting and auditing, unless FIZ entity conducts import/export transactions with Georgian entity Free industrial zones in Georgia. Make your business tax-free
  26. 26. Special tax regime:  No CIT  No VAT  No import tax on import of foreign goods into FIZ (not from Georgia)  PIT is paid by employees of FIZ Enterprise on self-assessment base  Supplies of goods to/purchase of goods from an enterprise in Georgia are subject to tax at a rate of 4% of the invoice value Free industrial zones in Georgia. Make your business tax-free
  27. 27. Activities in FIZ: Production and processing of any goods or provision of services, except for:  Using of building for residence (no space should be used for residential purposes)  Production of: arms and munitions, trade of arms and munitions; production of nuclear and radioactive substances, trade in nuclear and radioactive substances  Import, storage, production or/and sale of: narcotic and psychotropic substances; excise goods (except for personal use)  No tobacco products or raw materials shall be exported, stored, produced and/or sold in FIZ Free industrial zones in Georgia. Make your business tax-free
  28. 28. Relevant expenses: License (one time fee, per annum)*  General Trade License – 7,000 - 10,000 EUR  Manufacturing License – 2,000 - 10,000 EUR  Special Trade License – 4,000 EUR  Consulting License – 4,000 EUR  Service License – 2,000 EUR  Banking and Financial Services License – 25,000 EUR * Certain price depends on company`s activities and FIZ chosen Company registration in FIZ: from 1000 EUR (in Kutaisi FIZ) to 1300 EUR (in Tbilisi or Poti FIZ). Legal, accounting, auditing, bank account opening services, provision of virtual office/real office facilities/land plot/warehouse, nominees, any other out-of- pocket expenses are not included. Free industrial zones in Georgia. Make your business tax-free
  29. 29. Georgia as an attractive non-EU hub for international business structuring. Do your business in Georgia
  30. 30. TOP REASONS TO DO BUSINESS IN GEORGIA Corruption – free destination According to Transparency International Global Corruption Barometer Growth – friendly tax policy The new tax policy since 2017 : Georgia adopted the Estonian model of taxation system meaning that retained earning will not be taxes and profit tax will only be deductible in case of profit distribution No currency control rules No restrictions on export and import of capital. Funds can be repatriated in any currency Liberal cross-border trade Agreement on DCFTA with EU, FTAs with CIS and Turkey, signed EFTA, negotiating on FTAs with China and Hong Kong Strategic geographical location on the crossroad of Europe of Asia Attractive tourist destination Georgia as an attractive non-EU hub for international business structuring.
  31. 31. HOW TO START BUSINESS IN GEORGIA Georgia as an attractive non-EU hub for international business structuring. 1-2 days and 100-200 GEL is needed for company registration Orпanizational types of enterprises that can be registered in Georgia (Law of Georgia “On Entrepreneurship”)  Joint-Stock Company (JSC)  Limited Liability Company (LLC)  General Partnership (GP)  Limited Partnership (LP)  Cooperative (CO)  Individual Enterprise (IE) NO restrictions regarding: country of incorporation/citizenship of the founder(s), citizenship of director; amount of the charter capital of LLC, although the charter capital shall be in place; min/max number of directors/founders of the Georgian legal entity Entities whose activity is subject to licensing or special permit, shall obtain the same
  32. 32. LICENSING REQUIREMENTS Georgia as an attractive non-EU hub for international business structuring. Licensing is mandatory for activities that are relevant for human life and health, the State security or public interests An exhaustive list of licenses can be found in the Law on Licensing Two types of applicable licenses: 1) License to Exercise an Activity specified by the law (e.g. to set up a private security service), issued subject to the applicant`s compliance with specific requirements. 2) License to Use applies: to the use of national resources specified by the law. Such a license grants its holder the right to use certain resources (e.g. natural resources). Licenses of this type can only be awarded in an open outcry tender, except the cases stipulated by the law and the holder of the license may transfer it to others The decision-making term on the issuance of a license is 30 days from submission of an application; the respective term for permits is 20 days. If no decision is made during this period the license/permit is considered issued.
  33. 33. Georgia as an attractive non-EU hub for international business structuring. Enjoy your “CRS-free” status with Georgia ! Georgia did not sign MCAA and did not commit to CRS information about Georgian companies and their UBOs will not be disclosed automatically to any foreign country`s tax authority However the disclosure of information “upon request” is still possible, based on DTTs and agreements on mutual legal assistance with other countries, although the procedure is more time-consuming and accompanied by certain formalities Banks will anyway collect information about real UBOs of the Georgian companies. NB! Some foreign banks may refuse to open bank account to the Georgian companies on those reason that Georgia did not commit to AEoI. Also, restrictions of banks on accepting/withdrawing of funds from/to banks from non-participating jurisdictions should be checked on case-by-case basis.
  34. 34. Georgia as an attractive non-EU hub for international business structuring. Georgian taxation in brief. Enjoy the benefits! Taxes and tax rates for business: Personal Income Tax: 20 % Value-added Tax: 18% Corporate Income Tax: 15% Property Tax: up to 1% (the only local tax) Import Tax – 0%, 5% or 20% Excise Tax – on few selected goods  Resident enterprises are subject to CIT on their worldwide income  Non-resident enterprises carrying out economic activities in Georgia through a permanent establishment (PE) are subject to CIT with respect to its Georgian- source income  Non-resident enterprises earning income from Georgian sources, other than through a PE, are subject to withholding taxes (WHTs)
  35. 35. Georgia as an attractive non-EU hub for international business structuring. New CIT system From 1 January 2017 a new CIT system enacted, representing the Estonian model of CIT to the Georgian tax system. Retained profits are no longer taxable until they are distributed. A standard CIT rate of 15% is applicable to the grossed-up value of the following transactions:  Profit distribution  Costs incurred not related to economic activity  Free of charge distributions  Over limit representative expenses Commercial banks, credit unions, insurance companies, microfinance organisations, and pawn shops will be affected by the new CIT regime after 1 January 2019 NB! Distribution of dividends between Georgian legal entities and distribution of dividends received from a foreign enterprise (except for a person registered in a country with preferential tax treatment) are not subject to CIT
  36. 36. Georgia as an attractive non-EU hub for international business structuring. List of countries with preferential taxation England Bahamas Bahrain Bermuda British Virgin Islands Guernsey Vanuatu Cayman Islands Curaçao Mani Islands Marshall Islands Micronesia Palau Sark Turks and Caicos Islands Angola Andorra Antigua and Barbuda United Arab Emirates Aruba United States Virgin Islands Barbados Belize Brunei Grenade Guatemala Dominica Jamaica Cyprus Costa Rica republic Cook Islands Lebanon Liechtenstein Luxembourg Mauritius Malaysia Macau Morocco Montserrat Nauru Republic of Maldives Netherlands Antilles Nicaragua Nueve Aldernin Oman Panama Puerto Rico Samoa Seychelles St. Kitts and Nevis Saint Lucia Saint Marten St. Vincent and the Grenadines Tuvalu Uruguay Fiji Philippines French Polynesia Kuwait Chile Djibouti Jersey Hong Kong
  37. 37. Income WHT (%) Dividends 5 Interest 5 Royalties 5 Oil and gas subcontractor income 4 International transportation/communication 10 Income from services rendered in Georgia 10 Other Georgian-source income 10 Insurance and re-insurance 0 Georgia as an attractive non-EU hub for international business structuring. Non-resident enterprises earning income from Georgian sources, other than through a PE, are subject to WHT at the following rates: Payments of interest, royalties, or other Georgian-source income to non-residents registered in so called ’black listed’ countries are subject to WHT at a 15% rate.
  38. 38. Change your tax residency to Georgia Residency through investments you may qualify for tax residency (TBD later) Alternative option: donate assets to your family, who move to Georgia Advantages of the Georgian tax residency • Georgia is not the tax-free country, but has one of the world`s simpliest and most liberal tax regimes and law taxation. Georgia is not bounded by EU regulations • Dividends and interests are only taxed at source at a withholding tax 5% and not included into the personal income tax base, and rental income is also subject to a reduced 5% tax rate • Income is taxed at a flat rate which is lower than that of every OECD member, except for Hungary • Estonian tax model enacted from 1 January 2017. All retained and reinvested profits are exempted from CPT (15%) • potential benefits to those earning income in countries with which Georgia has DTTs Georgia as an attractive non-EU hub for international business structuring.
  39. 39. a financial institution that is granted the relevant status by the Revenue Services The revenues derived by IFC from a source in Georgia as a result of performing financial transactions and/or rendering of financial services must not be higher than 10 percent of its gross income. IFC shall be established outside FIZ The following shall be exempted from CIT: • profit of IFC from financial transactions and/or financial services and/or the sale of securities emitted by a non-Georgian resident; • profit from the sale of securities emitted by IFC; • profit derived by an investment fund from the supply of financial instruments and/or from financial transactions and/or financial services, provided an investment fund is an IFC Companies with special status Georgian “Virtual zone entities” for IT business sector International Financial Company
  40. 40. Companies with special status Georgian “Virtual zone entities” for IT business sector Virtual zone entity is a legal entity that performs information technology activities and has been granted a relevant status by Georgian tax authorities Profit received through the supply of information technologies outside Georgia created by a virtual zone legal person is exempted from taxation in Georgia.
  41. 41. Virtual zone entities Summary of requirements and tax benefits  No limitations and restrictions as regards the citizenship of the founder/director  No salary minimum or maximum  Absence of any social security contributions, only income tax 20% from the salary of employees No need to have employees in Georgia, except the director. All work can be done by the contracted persons outside Georgia (including private entrepreneurs) based on civil agreements Georgian “Virtual zone entities” for IT business sector
  42. 42. Virtual zone entities Summary of requirements and tax benefits  Income of VZE is exempt from taxation by VAT (18%) and corporate income tax (15%) if company provides its services to customers outside Georgia  In case of dividends payment, the only Georgian tax on dividends payable to physical person, non-resident legal entity-shareholder constitutes 5% *  there are no requirements as regards “substance”, the director of the company may be physically located either in Georgia or abroad and manage company`s account with the Georgian bank via internet – banking  NBG officially approved rules PayPal, so the VZE will be able to carry out settlements with its foreign customers via this payment system * There are options of income transfer outside Georgia without the payment of dividends, and thus, without any taxation in Georgia Georgian “Virtual zone entities” for IT business sector
  43. 43. Virtual zone entities To enjoy the status of VZE, the company must simultaneously comply with the following requirements  Activities in the sphere of “information technologies”* A company receiving just passive income from its subsidiaries and/or paying dividends abroad to its founders will not qualify  Research and development activities and be the owner of IP rights for the relevant web-based product The company – licensee will not qualify  The business activities and services of the company should be carried out/delivered outside Georgia, for the foreign customers based on relevant foreign-economic contracts NB! Definition of “information technologies activities” is not fully clear! TO be preliminary confirmed with Georgian tax authorities, based on relevant individual tax clarification Georgian “Virtual zone entities” for IT business sector
  44. 44. Virtual zone entities Use Georgian nominee shareholder... !  Your confidentiality protection, as the Georgian company register is open ! Real UBO will be disclosed to the bank, but there is no automatic information disclosure to tax authorities. Georgia did not commit to CRS  The dividend income paid by the Georgian VZE to the Georgian shareholder will be exempted from taxation. If a Ukrainian resident will be the founder, then the relevant income will be taxed based on Ukrainian – Georgian DTT and Ukrainian Tax Code Georgian “Virtual zone entities” for IT business sector
  45. 45. General ideas for substance: Direct tel.: +995.322.181310 , fax: +995.322.180310 Email: office@abc.ge Website: www.abc.ge Office space Qualified local directorLocal key personnel Account in local bank managed by the local director PLUS: Compliance will all tax and reporting obligations (e.g. filing tax income tax and profit tax declarations); Proper accounting books and records in place of registration Georgian “Virtual zone entities” for IT business sector Although Georgia did not commit to CRS and AEoI, this may happen in the near future. We recommend to create certain level of “substance” in Georgia for Virtual Zone Entities
  46. 46. V. Citizenship and residency in Georgia: requirements, procedure, costs. Tax residency in Georgia and its benefits
  47. 47. Citizenship and residency in Georgia: requirements, procedures, costs. General residency types. The laws of Georgia provide for the following types of residence permits in Georgia: Temporary: (1) Work residence permit; (2) Education residence permit; (3) Family reunion residence permit; (4) Residence permit for former Georgian citizens; (5) Special residence permit; (6) Residence permit for stateless persons; (7) Temporary residence permits for victims of domestic violence; and (8) Short-term residence permit for persons who own immovable property (other than agricultural land) in Georgia with market value of USD 35,000 Permanent: (1) Permanent residence permit; (2) Investment residence permit; (3) Residence permit for stateless persons;
  48. 48. Employment residence permit Is granted for engaging in labor or entrepreneurial activities (also to persons with free profession (freelancers), volunteers and interns). Employment residence permit is issued for a period not exceeding 6 years, however, for the first time, the permit is issued for a period of 6 to 12 months with the possibility of further extension. Requirements: •Document evidencing labor and/or entrepreneurial activity •Confirmation of address in Georgia •Application form/State fees payment •Bank statement confirming availability of funds (minimum 4000 GEL) (on a personal bank account in Georgia for a business owner, who applies for residency on the basis of company registration) Citizenship and residency in Georgia: requirements, procedures, costs.
  49. 49. Short-term residence permit Short term residence permit is issued to foreigners who own immovable property (other than agricultural land) in Georgia, market value of which exceeds USD 35,000. Short-term residence permit is issued for 1 (one) year and may be renewed each year until a foreigner has ownership title to respective immovable property. Requirements: •Market value of the immovable property must be determined by a certified valuator of the Body accredited by LEPL Unified National Body of Accreditation – Accreditation Center. Citizenship and residency in Georgia: requirements, procedures, costs.
  50. 50. Education residence permit Education residence permit is issued for the purposes of studying in an authorized academic institution of Georgia. Education residence permit may be issued for the period not exceeding 6 years (however, for the first time, the permit is issued for no less than 6 and no more than 12 months). State fees for temporary resident permits: From the day of application: •On the 30th calendar day – 210 GEL; •On the 20th calendar day – 330 GEL; •Within 10 calendar days – 410 GEL. Citizenship and residency in Georgia: requirements, procedures, costs.
  51. 51. Investment residence permit Investment residence permit is issued to foreigners who have invested in Georgia at least GEL 300,000. Investment residence permit may also be granted to the investor’s family members. Requirements: •Audit report confirming the investment in Georgia of at least GEL 300,000 •Type of investment is not important •A recommendation of a member of the Government of Georgia or 3 Georgian citizens being authorized persons of Georgian legal entities (e.g. registered directors) •Indefinite period of validity Citizenship and residency in Georgia: requirements, procedures, costs.
  52. 52. Permanent residency Permanent residence permit to live in Georgia is issued to: 1. the spouse, parent, child of a Georgian citizen; or 2. foreigner who has lived in Georgia for the past 6 years on the basis of a temporary residence permit. State fees permanent resident permits: From the day of application: • On the 30th calendar day – 180 GEL; • Within 20 calendar days – 300 GEL; Citizenship and residency in Georgia: requirements, procedures, costs.
  53. 53. Citizenship Naturalisation occurs by being granted Georgian citizenship by the President of Georgia. Types of naturalization in Georgia are the following: An ordinary procedure; A simplified procedure for repatriates and spouses of Georgian citizens; By way of exception to a citizen of a foreign country for having special merits to Georgia or if granting of citizenship of Georgia is in the State interests of Georgia; Granting citizenship of Georgia through restoration. Citizenship and residency in Georgia: requirements, procedures, costs.
  54. 54. Citizenship of Georgia – Eligibility: An ordinary Procedure An applicant must be legally residing in Georgia for the 5 previous years – not leaving the territory of Georgia for more than 90 days in a year. Knows the state language, the history and the basic principles of law of Georgia to the established limits. Is employed and/or owns real estate in Georgia. State fees: From the day of application: On the 80th calendar day – 50 GEL; On the 60th calendar day – 100 GEL; On the 40th calendar day – 200 GEL; Within 20 calendar days – 300 GEL; Citizenship and residency in Georgia: requirements, procedures, costs.
  55. 55. Citizenship of Georgia by exception: Under the Constitution of Georgia, the President of Georgia may grant Georgian citizenship by way of exception to an alien who has made a contribution of exceptional merit to Georgia. The President of Georgia may also grant Georgian citizenship by way of exception to an alien based on state interests. For this type of application a letter of recommendation on granting citizenship of Georgia to a foreign citizen by at least 2 Georgian citizens or legal persons registered in Georgia is additionally required. State fees: From the day of application: On the 80th calendar day – 250 GEL; On the 60th calendar day – 350 GEL; Within 30 calendar days – 500 GEL; Citizenship and residency in Georgia: requirements, procedures, costs.
  56. 56. Georgian passport ranking: Citizenship and residency in Georgia: requirements, procedures, costs. The Nomad Passport Index, based on 199 countries Visa-free travel - 50% Taxation - 20% Perception by other countries -10% Dual citizenship - 10% Freedom - 10% Total ranking UK 175 20 40 50 30 103.5 Georgia 94 0 30 30 40 65 Russia 105 30 20 30 20 65.5 Despite the fact that Russian citizens can enter Georgia without visa, Georgian residency and citizenship procedure, being relative quick and easy, may also bring numerous benefits:
  57. 57. Benefits of Georgian residency and citizenship Residence cards can be used instead of passports to cross the Georgian border to simplify the inspection process carried out at the border of Georgia; A resident card/passport holder will be granted a Georgian identification number Visa-free regime with Schengen countries. No need to use your passport’s translated and notarized copies Easy identification and access to public services Invitations to visit Georgia may be issued even by a resident card holder Residence card/passport enables a foreigner to obtain information online without leaving his/her home. Such information may include tax data, health data or other relevant information. Permanent residence card holders and citizens are entitled to receive social benefits in Georgia (such as pensions and etc.) Citizenship and residency in Georgia: requirements, procedures, costs.
  58. 58. Tax residency in Georgia Everyone wants to pay less in taxes each year. For many of us, that means establishing our homes and/or businesses in low-tax countries. Georgia has low taxes compared to its counterparts in Europe: Establishing tax residency in Georgia provides the option of e-filing, making it much easier to pay taxes than it was previously. Tax residents can also pay their tax bill electronically on the Revenue Service’s website. Citizenship and residency in Georgia: requirements, procedures, costs. •Income Tax: 20 % •Value-added Tax: 18 % •Corporate Tax: 15 % •Capital Gains and Interest: 5 % •Property Tax: 1 %
  59. 59. Tax residency in Georgia - Eligibility Any individual living in Georgia for 183 days during a consecutive 12-month period is eligible to apply for tax residency. A special regime for those designated as “high net-worth individuals.” Someone is considered to be high net-worth if: 1) the value of his/her confirmed property is greater than GEL3,000,000 (approximately $1.35 million USD); or 2) his/her annual income exceeded GEL200,000 (about $90,000) in any of the three years before the year they submit the application. The applicant must have either a Georgian residency permit/Georgian citizenship or must verify receiving at least GEL25,000 pa (just over $11,000) of income from a Georgian source ! HOW TO OBTAIN THE GEORGIAN TAX RESIDENCY Citizenship and residency in Georgia: requirements, procedures, costs.
  60. 60. Eurofast Services re: Georgian Residency and Citizenship Preparation of the necessary forms and submission to the authorities Representation of the applicant for the communication with authorities Arrange all necessary documentation needed to be gathered and submitted with the authorities Provision of reference letter that significantly increases the chances of successful application processing Assistance in business registration Bank accounts opening support Citizenship and residency in Georgia: requirements, procedures, costs.
  61. 61. A few words about Eurofast Eurofast is a regional business advisory organisation employing local advisors in over 21 cities in South East Europe and Middle East (SEEME). We are uniquely positioned as one stop shop for investors and companies looking for professional services in the SEEME region. Our team of advisors are capable of efficiently addressing all client needs in one single meeting, using one single language for all the countries in the Region.
  62. 62. What we are good at…Our Services •International Tax •Mergers & Acquisitions and Transactional Advisory •Transfer pricing •Accounting services •Financial services •Outsourced Payroll and Employment solutions •Corporate services •Citizenship & Residency services •HR administration •Banking and Financial services •Business Restructuring & Insolvency •IT specialized services •Tax Planning & Tax Compliance •Real Estate tax •Shipping Tax •Energy Tax •Intellectual property •market entry services Bringing value to clients with our service Eurofast is Taxand Cyprus
  63. 63. Where you can find us
  64. 64. Eurofast Georgia Address: 7 Khorava str, Tbilisi, 0179 Specializations:  International Taxation  Banking and Finance  M&A
  65. 65. Eurofast Georgia Address: 7 Khorava str, Tbilisi, 0179 Specializations:  Banking and Finance  Payroll  Administration Irina Lopatina Payroll Executive T+995.599990245 E:irina.lopatina@eurofast.eu
  66. 66. Eurofast Ukraine Alena Malaya Tax and Legal Advisor T:+38044 279 55 66 E:alena.malaya@eurofast.eu Specializations:  International Taxation  Banking and Finance  FX licensing 21/8 Malopidvalna str., office 28, Kyiv, 01034, Ukraine
  67. 67. Eurofast offices All our Eurofast offices: ➢Fully fledged ➢Have local team members ➢Connected via telephone extensions ➢Connected via video ➢Follow the ISO procedure
  68. 68. What others think about us What others think about us International Tax Review: The only authoritative and genuine awards in taxation worldwide!
  69. 69. Credentials
  70. 70. Credentials
  71. 71. Credentials
  72. 72. Credentials
  73. 73. Credentials
  74. 74. Credentials
  75. 75. Find us online www.eurofast.eu
  76. 76. Thank you! Questions/ Answers

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