Peripheral services can be provided by private lawyers and related professionals at additional cost. Lawyer charge in the range of $300-600 to draft a company’s charter and to provide advice. A notary public typically charges about $30 to certify the documents and about $2 per page to certify copies of the documents.
Taxation Department Registration. In accordance with the Cabinet of Ministers Decree 899 (December 31, 1994), within 10 days of completing the company registration process, an investor must register with the local office of the taxation department that has jurisdiction over the legal company address. This registration requirement applies to all tax types except the value-added tax (VAT). VAT registration is required for all firms with total taxable transactions greater than GEL 24,000.
A taxpayer registration application package should contain the following documents:
(1) Taxpayer registration form (4 copies)
(2) Court resolution showing company registration (notarised copy)
(3) Charter (original or notarised copy)
(4) Minutes of the foundation meeting (original or notarised copy)
(5) Decision to set up the company (original or notarised copy)
(6) Director’s sample of signature (notarised)
(7) Document confirming the legal address of the company (original or notarised copy).
In accordance with Decree 899, the Taxation Department is required to issue a taxpayer registration certificate within 10 working days. The compliance with the 10-day limit depends on whether or not operations at local taxation offices are computerized. There is no fee for taxpayer registration.
Taxpayers are assigned a 9-digit taxpayer identification number (TIN). The first digit specifies the taxpayer type (1 is for an individual person, 2 is for a legal entity), the next 7 digits are sequential numbers (each local tax office has its own block of 7-digit sequential numbers), and the last digit is a control digit. There is no relation between a court registration number and a TIN.
If a company changes its legal address, opens a branch, changes bank accounts, or makes any other changes that require registration at the enterprise register, then the investor is required to notify the tax department within 10 days of the change.
As of June 2001, sole proprietorships are no longer required to register with the courts. They need only to register with the relevant local taxation office.
If a company’s total taxable transactions over the previous 12 months equal or exceed 24,000 GEL, the company is required to register for VAT within 1 month of the change in tax liability status. A separate VAT registration certificate is issued.
Stamp Approval. In accordance with the amendments to the Law on Entrepreneurs (effective June 1, 2001), company stamps are no longer required, and state institutions have been explicitly prohibited from requiring a company to present a stamp for any purpose. Information regarding this change in the law apparently has not been widely disseminated because in July 2001, many companies and lawyers still complied with the old requirements for company stamps. Further, it appears that the police department continues to issue stamp approvals (at a fee of 10 GEL) despite the change in the law.
Department for Statistics Registration. Amendments to the Law on Entrepreneurs and the Administrative Code have eliminated the requirement that a business must register with the Department of Statistics. Under the new regulations, this requirement has been replaced by a notification process between the courts and the Department of Statistics. The new regulations may be summarized as follows:
In accordance with the Law on Entrepreneurs,[22] the courts are required to send copies of the court business registration resolutions to the Statistical Department on a monthly basis. This information should be submitted by the 5th day of every month.
On June 19, 2001, parliament amended the Law on Entrepreneurs and abolished the provision that the courts must assign tax and statistics codes when a company has registered with the relevant bodies.
Amendments[23] to the Administrative Code in July 2001 have removed the provision that companies must provide a statistical code in order to open a commercial bank account.
However, in practice, companies throughout Georgia still go to the central bureau of the statistical department in Tbilisi to register in order to comply with the previous provisions of the law.
Public Availability of Information. Company registration data are recorded in the registration card as approved under the law (see in the above). The same format is used to respond to requests for company registration information. The following information is required to complete a registration card:
· Name of the local court
· Court registration number
· Company name
· Address
· Activities
· Equity capital
· Names of partner(s), their occupations, and addresses
· Names of director(s), their occupations, and addresses
· Members of the supervisory board, their occupations, and addresses (if a supervisory board was established)
· Representation powers of director(s)
· Trade representative (procurator)
· Legal status
· Date of registration
· Remarks
As mentioned above, a company may be registered in any one of 66 local courts throughout Georgia.
4.1.2 Company Licensing System
General. The law of Georgia on "Licensing of Entrepreneurial Activity" adopted on 14 May, 1999 defines those business activities which can be carried out only by licenses issued by the corresponding state agencies.
The law lists those types of business activities about which corresponding state bodies must be notified. The law does not cover export-import relations, environmental control and utilization of natural resources, electric power, oil and natural gas, communication and post services, where licensing procedures are regulated by special legal acts.
Activities to be Licensed and Licensing Agencies. The types of business activities that require obtaining a license and the respective state licensing agencies are as follows:
a) Insurance activities and intermediary (agency) services in the field of insurance – Insurance State Supervision Service of Georgia;
b) Banking activities, activities of foreign currency exchange points – National Bank of Georgia;
c) Production, repair of and trading with arms and ammunition – Ministry of Justice of Georgia (within the limits defined by National Security Council of Georgia);
d) Air transportation of passengers and goods or/and carrying out aviation related work at the territory of Georgia, maritime transportation and hauling – Ministry of Transport and Communications of Georgia;
e) Activities of the regulated participants of the securities market (brokerage companies, brokers, stock exchanges, central securities depositary and securities registrars) – Ministry of Finance of Georgia;
f) Organizing lotteries and other money-making games – Ministry of Finance of Georgia;
g) Production of medicines and substances that are subject to special control, medicines used in veterinary, activities of health care organizations – Ministry of Labor, Health and Social Protection;
h) Activities of diagnostic centers for technical examination of motor vehicles –Ministry of Internal Affairs of Georgia;
i) Design - construction works – Ministry of Urbanization and Construction of Georgia (in the cases defined by the law);
j) Activities of auditing firms – Parliamentary Council on Audit Activity of Georgia;
k) Activities of private educational institutions – Ministry of Education of Georgia;
l) Production and repair of metrological and measurement equipment – Department of Standardization, Metrology and Certification of Georgia;
m) Production of food products (including child's food products) and tobacco - Ministry of Agriculture and Food of Georgia.
Notification about Carrying Out Activities. The following fields of activities are subject for compulsory notification of the relevant state agencies as defined in this paragraph:
a) Activities related to precious metals, precious stones and their products – Testing Supervisory Inspection of Ministry of Finance of Georgia;
b) Aero photographing of the country's territory, creating state geodesic network, works related to the publication of maps and plans – State Department of Geodesy and Cartography;
c) Activities related to job finding services (including abroad) - Ministry of Labor, Health and Social Protection;
d) Geologic activities - State Department of Geology;
e) Transportation of passengers by a minicab – Relevant Department of local government (self-government) authorities;
f) Activities of public dining halls, which can simultaneously accommodate 25 persons or more - Relevant Department of local government (self-government) authorities.
The notification is made as a statement, which includes:
a) For an individual – data about the identification card of a citizen of Georgia, registration into enterprise register, occupation, home address);
b) For a legal entity - the company's name, legal status, location (legal address), name of authorized representative;
c) Indication about the type of activity and the place, where the person carries out this activity.
Within 15 days from starting the activity, a person is required to notify about starting this activity the relevant agency, which is obliged to issue a document certifying the receipt of such notification within 3 days after receiving the notification.
The Documentation that has to be Submitted for Obtaining a License. A license seeker submits a written application about obtaining the license to a licensing agency. The application about obtaining the license should include:
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