Singapore, Cyprus, China, Holland are the states that first come to mind when it comes to offshore companies for IT companies. But in this article, I will talk about a country that borders Russia and offers surprisingly very tempting conditions for start-up companies in the field of information technology. Tested on myself! Let's go?
Gamarjoba, genatsvale!
The need to open my own IT company was caused by the launch of the CubenatiK mobile game in the stores, the ideological inspirer and main developer of which was our son, who at the age of 13 wrote all the code for this puzzle.
Adventurous by nature, we decided to combine business with pleasure in our work: to go on a journey, while finishing the game and dealing with registration issues. Having studied the possible and available options for us, we settled on the most non-trivial - Georgia.
At the time of our departure, only the only source on the Internet spoke in sufficient detail about the working conditions for Georgian IT companies. This information turned out to be enough for us to go on a two-month business trip to Tbilisi and check the innovations of this country on our own experience.
So, the main profits for Georgian IT companies:
- company registration in 2 days
- free bank account opening
- lack of financial monitoring
- obtaining the status of "person of the virtual zone"
- tax exemption, except for 5% on dividends
- 2 months of free accounting service
- very cheap fruits, vegetables, transportation, accommodation and entertainment - a cool bonus to the above
Registration of a startup company
The full cycle of company registration takes two days from the date of submission of documents to the Tbilisi House of Justice (another name: Public Service Hall). It is one of the most famous futuristic petal-roofed buildings and can be seen in most panoramic shots of the Georgian capital.
To open a company, you will need the following documents:
- International passport.
- Charter in Georgian and Russian (in some cases in English) languages.
- Legal address.
You are unlikely to have any difficulties with the first point, but I will tell you more about the next two.
You can request a model charter in both languages ββfrom consultants at the House of Justice. It will contain a minimum of information that will need to be filled in: form of ownership, name and address of the company, founder, field of activity, contact details. However, if you are not a native speaker of the Georgian language, then the statute must be completed and amended by an interpreter.
The issue with the legal address also depends on your personal wishes and possibilities. Proof of ownership, a lease agreement, or permission to use the address is required as proof. Naturally in Georgian.
If you do not intend to rent premises for an office and do not intend to make significant changes to the charter, then the registration process will be greatly simplified. All you need is to come to the House of Justice.
At the entrance you will meet local citizens offering numerous services for foreigners, from rental housing and tourist trips to notary services. You will definitely be offered assistance in translating documents and providing an address for registering your company. Do not be afraid of anything and believe me, you will save a huge amount of time.
We did just that. After we got acquainted with the list of necessary documents and studied the model charter, a girl approached us at the exit of the House of Justice and for 100 GEL offered to translate the documents and provide a legal address for the organization. She took us to a cafe located on the first floor of the institution, prepared a charter, a lease agreement and invited an employee of the Ministry of Justice.
This is what the first page of our Charter looks like
You can read the full text of the document here
Permission to use the address
The specialist accepted all the documents, scanned the passport, prepared an application for opening a legal entity and a receipt for paying the state duty (130 GEL). After that, she assured that an SMS notification would be sent to the phone on the day when it would be possible to pick up ready-made documents at the House of Justice.
LLC Opening Application
Bingo! The whole procedure took us less than an hour, cost 230 GEL and was carried out in very comfortable conditions with a cup of tea. Exactly two days later, we received an SMS that the legal entity was registered and we could pick up the documents.
Bank account
The next step in registering an IT company in Georgia will be opening an account.
In the House of Justice on the first floor there are branches of three banking institutions: Bank of Georgia, TBC Bank and Liberty Bank. TBC is considered the most loyal, and we began to work with it.
Opening an account for a new company will be free, but if you decide to order a corporate card, you will have to pay for its annual maintenance. You can manage your working account remotely, as you have access to Internet banking and a mobile application.
TBC Bank has also developed favorable lending conditions and non-material support . However, you can become a member of this program only if you have a Georgian residence permit or if the director and co-founder of your company is a Georgian citizen with a 51% stake in the joint business. This moment should be fixed in the Charter.
In addition, Georgia is not a member of the international system of automatic exchange of financial information, therefore, Russian and other foreign tax authorities will not become aware of Georgian bank accounts and movements on them. At the same time, money from corporate and personal cards can be withdrawn at any ATM in the world.
Registration in services
After submitting documents for opening a company to the House of Justice, all available information on your company will become available to you: scans of documents, registration status, etc.
All documents are on the site in the public domain
I advise you to save the scans, because later on you will have to copy-paste the data in Georgian more than once. Most of the services you will work with require filling in the local language.
Extract from the register of legal entities of Georgia
One of the first will be Tax Service of Georgia, in which you need to register after receiving the documents of the company in the House of Justice. The process is quite simple, but, as I said earlier, you need to enter data in Georgian.
When the registration is completed, you will receive a letter with an invitation to come to the tax office to confirm the electronic signature. I want to warn you right away: the letter sent is generated automatically and the address of the branch is set based on the location of your legal address.
You may find that the proposed tax office will not work. We were invited to the tax office on Mardzhinashvili, but when we arrived there we found that the building had been closed for repairs for a very long time. As a result, we had to go to the department on Merab Kostava, next to the Polytechnic Institute. It is worth noting that there is a fairly fast electronic queue in the branches, and most of the employees speak excellent Russian.
Congratulations! From this moment you become an official taxpayer in Georgia :)
After confirming the electronic signature, you will have full access to your personal account on the tax website. Before you begin, you should open all documents in the Inbox folder. This is a mere formality. The letters contain information about all laws adopted for legal entities since 2008: licenses, taxation, announcements, etc.
After that, you go to the section "information about the taxpayer" and select the OKVED codes corresponding to the activities of the company, and in the section "Branches / services" fill in the information about the legal address.
Here you choose OKVED
And here you enter information at the address
"The Face of the Virtual Zone"
Now you can start legalizing the right to use "The Face of the Virtual Zone". To do this, you need to get an electronic certificate.
On the Ministry of Finance of Georgia You enter the login and password that are linked to the tax account. You will be taken to a page with your personal information already filled in. It remains to enter your email and your Georgian phone number. In the "Request" section, briefly describe the type of company's activity, planned projects and send an online application. You will have to write in Georgian, so Google translator will help.
As a rule, the receipt of the certificate occurs within ten days. We received it three days after the application was submitted. The certificate is issued only in electronic form and is always available on the website newzone.mof.ge.
And this is our virtual access to offshore opportunities
What is it - the magical status "Person of the virtual zone"?
This status is assigned exclusively to those companies that operate in the field of information technology on the territory of Georgia. Any activity related to IT is carried out according to legislation.
IT startups are exempt from paying taxes, except for:
- 5% - tax on dividends
- 20% - income tax on employees
- 2% - tax to the pension fund from resident employees
However, if you do not officially hire employees, and even more so if there are no residents of Georgia working in the state, then the need to pay any taxes, except for 5% on dividends, automatically disappears.
It is important to remember that this taxation system only works if your company's income comes from foreign countries.
As, for example, in our case, when the counterparties are foreign Unity, AppLovin, etc. But if you decide to perform work for a Georgian customer, including a Georgian branch of a foreign company, then the income that you receive from this transaction will be subject to standard taxes: 15% on profit, 18% VAT.
Keep these things in mind when signing contracts.
Accounting support
For the reason that none of us wanted to take on the red tape for accounting, and serious transactions are not yet expected, we decided to hire a local accountant for outsourcing. At the same time, the peculiarity of our cooperation was that we received the first two months of support for free, then the rate of 500 GEL per month begins to operate. In the future, payment may vary, depending on the amount of work. Therefore, I cannot give any detailed recommendations on the issue of independent reporting.
About difficulties
Despite all the advantages and disadvantages of opening an IT business in Georgia, we also faced some difficulties that you will not read about anywhere.
Google still does not allow Georgian developers to receive income from advertising and publishing any paid applications in their store. Including there is no possibility to work with Google AdWords, because when choosing your country you will not find Georgia.
We, unfortunately, learned about this only from our own experience, being already in Tbilisi and registering an LLC there. But since CubenatiK is a free game, and monetization comes from ads, we solved the problem of income and marketing by using other ad networks: Unity, AppLovin, Chartboost.
As for Apple, we have not yet launched the game in the AppStore, and therefore we cannot say for sure about the earning opportunities for developers in Georgia. But it is known for sure that Georgian users of Apple products have difficulties with the work of the store. Many games and applications are not available to people, and it is very often impossible to make in-game purchases.
While in Tbilisi, we tried to find out the reasons for this state of affairs in such a seemingly banal question, but we did not receive intelligible answers. According to local officials and bankers, the situation will be resolved in the near future.
If you are going to open a company in Georgia and start developing and publishing applications, be sure to monitor the information about changes in Apple and Google for Georgian developers!
Accommodation
Since we expected to stay in the Georgian capital for at least a month, daily rent was not the most profitable option for us. There was also no need to rent an apartment for too long, for example, through myhome.ge (the Georgian analogue of Avito).
To begin with, we tried to find apartment owners through airbnb who would not refuse to move in for a month for an acceptable cost. Three hosts agreed to our terms, and we chose the most suitable three-room apartment near the metro station for 800 GEL per month. We didn't have to pay for utilities.
If you decide to use this method of finding housing, consider seasonality. It may be more difficult to find an apartment in this way during the summer months.
Depending on the budget, there are many interesting options for accommodation in Georgia: from luxury hotels in trendy areas of Tbilisi to couchsurfing service, through which you can get to know the hospitality of the locals.
Food
A 20-minute walk from our house was one of the largest markets in Tbilisi - Deserter. In addition to the fact that prices in Georgian markets are several times lower than store prices, they are also very different from Russian prices for fresh products.
Considering that we came to Georgia in autumn, we were very lucky with the seasonal variety of vegetables and fruits, one kilogram of which, on average, cost one lari (a little more than 21 rubles). Therefore, if you want to eat fresh, ripe feijoa, tangerines, persimmons in the morning, drink pomegranate juice and cook fragrant vegetable salads for dinner, then October Georgia is waiting for you.
The price tags indicate the amount in Georgian tetri (1 lari = 100 tetri)
Some more photos from the Deserter Market
In the same place, at the covered markets, I advise you to buy frozen khinkali, which are not much inferior in taste, quality, composition to restaurant ones and are very easy to prepare on your own. In doing so, you will save a fair amount of money.
For comparison, a serving of 5 khinkali in a restaurant will cost you about 6 GEL. For the same money in the market you will buy 5 times more of your favorite dish.
Can you smell it?)
Transport
Public transport and taxis are also very cheap compared to Russian ones. For metro and land transport, a single card is used, the cost of which is 2 GEL. At any time, you can return the card with a check to any metro ticket office, while returning the paid 2 GEL. The fare itself costs 0,5 lari on all types of urban public transport.
To call a taxi, it is most convenient to use the services of Yandex, which offers fast delivery of cars and favorable rates.
Various car rental companies and services also operate in Tbilisi. We managed to use the services of carsharing - AiCar, whose fleet includes only Renault Zoe and Nissan Leaf electric cars. To use the car, you need to download the application, upload your passport and driver's license.
Users are subject to mandatory conditions: age over 21 years and driving experience for more than two years. In AiCar, there is also a rule according to which the car can only be used within the urban area and Mtskheta. But in order to see the sights of ancient Mtskheta and admire the surrounding panorama from the height of the ancient Jvari monastery, renting such an electric car would be an ideal solution. We spent 4,5 hours behind the wheel of such a Nissan and drove 71 kilometers, paying 50 GEL for a short trip.
View of the city of Mtskheta and the monastery of Jvari
What to see
Mtatsminda, Narikala, Abanotubani, Sololaki, Metekhi, Svaneti, Alaverdi, Kakheti, Vardzia, Batumi, Ananuri, Ushguli, Kazbegi - on weekends you will not be bored in Georgia. It is like a treasury, fraught with a huge number of ancient, delightful sights, natural beauty and warm hospitality.
And finally ...
Our family business trip to Georgia lasted two months: from October to December. During this time, we managed to complete all legal issues for opening an IT company, the child finished work on CubenatiK, and we had a great time in an unfamiliar country, combining the launch of the game with relaxation and travel.
And now, summing up the results of the trip, it should be noted that Georgia is only at the beginning of its development path in the IT sector, which means that difficulties in work cannot be avoided. But despite this, the Georgian government has provided unprecedented conditions for doing business in the information technology sector.
Tax incentives, lack of corruption and bureaucracy, fast and clear legal processes, lack of financial monitoring - all this has a beneficial effect on the productive activities of IT companies. This means that Georgia has every chance of becoming one of the most profitable offshore zones on the world stage.
Good luck in your IT-accomplishments!!!
Source: habr.com