How to open an IT company in Georgia: sharing experience

In June 2022, we managed to register a company in Tbilisi. Below the reader will find some useful tips if he wants to do the same.

Is it possible to open a company yourself

Unfortunately, in Georgia there is no Internet service for remote registration of companies, such as, for example, Stripe Atlas in the USA and which would allow you to issue everything, without exception, remotely, via the Internet. In order not to go to Georgia, we decided to use a consulting firm that offers remote registration of companies by proxy.

Tbilisi, Bridge of Peace
Tbilisi, Bridge of Peace

The second option would be to go to Tbilisi and try to do everything yourself, if you do not know the problems listed below. The main problem is that in Georgia only 60% of the population speaks Russian, but when performing official procedures in institutions such as banks, the tax office, the House of Justice, you need not only to know a few words, but to understand well the meaning of sentences with special terms. And there are even fewer such people in Tbilisi, I think, twenty percent. Almost everyone knows English, but this does not save the Russians: signs in institutions, inscriptions in ATMs, text in SMS to confirm registration and when entering sites, messages coming to a smartphone – all this in most cases is written only in Georgian, without duplication in English . Of course, there is a Yandex translator, but it is good when you are sitting at home at your desktop computer and no one is rushing you. If you are standing in line in a noisy institution, when you have to not only speak bad English, but also immediately translate from Georgian into Russian text on your smartphone or in a document that you urgently need to sign, then this is very, very difficult to do.

For those who still decide to take this risky step, we can advise the following: take two smartphones with you. In one there will be your Russian SIM card, in the second you need to insert a Georgian one. It is impossible to register a company without a Georgian SIM card. We need a second, not a dual-sim, smartphone. The second smartphone will allow you to use the camera and Yandex Document Translator to translate SMS and messages on Georgian sites displayed on the screen of the first smartphone. It should be noted that Georgian words are often displayed in Latin letters in SMS messages, and the translator does not always cope with this option.

So, if you want to do business in Georgia, you need to learn at least how to spell “Ok”, “Enter” and “Cancel” in Georgian, as well as the Georgian alphabet, because the meaning of some words can be understood if you can translate the letters into sounds without knowing the Georgian language.

We decided not to go to Georgia and do everything remotely, through a consulting firm. After a little googling, we settled on MKD from Tbilisi, because they answered faster than others, they wrote in Russian correctly and it seemed that we were communicating with professionals. But that also turned out to be difficult. Namely, you can register a company by a notarized power of attorney, when the notary only needs your passport. But when it comes time to open a bank account, you already appear before the notary not as an individual, but as the director of a Georgian company, and then the problem arises of how to prove to the notary that you are a director.

The notary can verify this by finding the registration data of your company on the website State Register of Georgia. But, firstly, there is no Russian text, only Georgian and English, and notaries in Russia cannot use the English text, they need a translation into Russian, certified by a certified translator. Secondly, notaries simply don’t want to do complex work when they have a long line of simple things that can be done ten times faster.

The second option to prove that you are a director can be an apostilled extract from the register of Georgia, but it must be the original, and not a copy received by e-mail. Those. the extract must be sent by regular mail, which now takes about 10 days, while it is considered valid only 7 days after receipt from the state register.

So, we had to go to Georgia ourselves to sign several documents.

How to get there

If anyone remembers the early 90s, then going through customs will remind you of all these delights in all their glory again. Planes do not fly now, and practically the only way is to go to Vladikavkaz, then by bus, minibus or taxi across the border, then to Tbilisi. In the summer, queues of cars at the Russian border reach 10 km in length and you have to stand in them for 10-15 hours under the scorching sun, without toilets within sight, without food and water.

We saw these queues, but we didn’t have to stand in them. The fact is that there are many taxi drivers who stand in line with an empty car, and when it comes to the customs office itself, for an increased fee (from 5 to 15 thousand rubles for urgency, plus 15 thousand rubles for a taxi to Tbilisi) they put you in this car. On the way back, there are no options to bypass the queue, but the queue is much smaller. You need to look for the described transfer options on Upper Lars Forum. In total, the road from Vladikavkaz to Tbilisi took about 5 hours. To leave back to Russia, it is advisable to get up at about 4 am, this will save several hours of downtime at Russian customs. There was no queue at the Georgian customs.

Phone and internet

Voice communication via MTS and Beeline in Tbilisi works well (if you enable roaming), but mobile Internet works only for reception. I was not able to send a single letter by e-mail until I inserted a SIM card from a local mobile operator. It is better not to count on WiFi in the hotel: it is available, but it works sporadically. It is very important to know that payment for the Internet and for voice communication in Tbilisi goes separately, to different accounts, and if you paid only for voice, then “mobile data” in your smartphone will not work for you.

If you want to manage your affairs in Tbilisi remotely, then you must definitely choose a SIM card and a mobile operator with roaming in Russia. There may be problems with this. The problems are related to the fact that Georgian mobile operators do not have a roaming agreement with all Russian ones. Therefore, if you set the default operator in the smartphone settings, the connection will not work. It is imperative to find out from the Georgian operator all the settings for roaming. We took a SIM card from Magticom and in Russia made the settings Network Mode = “3G only” and Network operator = “Megafon Rus”. Communication with other Russian operators did not work.

Taxi

There is a Yandex taxi in Tbilisi, but you won’t be able to call it until you buy a SIM card from a local operator and open a bank account for a plastic card that will need to be linked to this SIM card. So the first time you have to ride a regular taxi. Finding it is also difficult. They say that for this you need to download a special application, but we did not have time to use it.

Ordinary taxi drivers in Tbilisi do not name the cost of the trip, even if you ask directly, and after it ends, they give surprisingly large amounts.

Plastic card and bank account

To get a VISA, MasterCard, American Express bank card, you need to pay a fee of 50 GEL (1000 rubles) and fill out KYC (Know Your Customer) form, which is considered in the bank for about 5 days for both individuals and legal entities. It is necessary to pay 50 GEL before filling out the form, because it will have to upload a copy of the payment receipt.

I will give an example of the questions of the KYC form of the Bank of Georgia (BoG) for obtaining an invoice:

  1. Number of employees in a Georgian company

  2. Number of employees in a Georgian company

  3. Are you a politically exposed person or a family member/business associate of such person

  4. Do you have any connection with entities or individuals listed by OFAC, the UN or the EU?

  5. Please provide the bank with information about your main/secondary activities and describe the company’s role/participation in the business

  6. Business countries

  7. Please describe in detail the connection of the company with Georgia: what is your activity on the territory of Georgia

  8. In case your company replaces another already existing company, please indicate the name of this company, country of operation, publicly available sources/links and provide a bank statement of this existing company (duration: last 1 year)

  9. Please provide the bank with information about your counterparties (names, types/countries of activity)

  10. Provide the bank with detailed information on the purpose/content of expected transactions on your accounts (indicating countries)

  11. Expected annual turnover of the company

  12. Please provide information about the business experience (business resume) of the beneficial owner of the company

  13. If the company’s activities are related to the import / export of goods, please indicate the route of the transaction, the sender and end user / final destination of the goods, as well as participation in the territory of Georgia

Getting a bank account is very difficult. The bank studies in detail what exactly you do, where the founders get their money from, whether you have experience in doing business, whether there is a danger of turning your business into a criminal one or related to terrorism or wars, how many new jobs you will open in Georgia, etc. After studying the KYC form, the bank will ask many more clarifying questions and ask you to document your answers. Bog Bank refused to open an account for us with the phrase “Unfortunately, we cannot open an account for your company due to the internal policy of the Bank”, although our company BotEyes [ссылка удалена мод.] The bank answered all the questions, in our opinion, in the best possible way. The follow-up question received a copy of the same answer. We were told by an accounting outsourcing firm that about 70 percent of Russian companies open accounts, so we were among the unlucky 30 percent. Now we are trying to open an account in a smaller bank, it’s good that there are more than ten of them. For an individual, I managed to open an account at BoG Bank and get a plastic card.

After opening an account, do not forget to go to the Russian tax office and give them the completed form according to KND 1120107 “Notice of opening (closing) an account (deposit) in a bank or other financial market organization located outside the territory of the Russian Federation” and get a note that you she was given up. Without this mark, you will not be able to make a SWIFT transfer.

Dollars, Euros, Lari

There are a lot of exchange offices in Tbilisi and there are no problems to change rubles for dollars or lari. ATMs do not accept rubles. The dollar to ruble exchange rate is about the same as in Russia.

You can transfer money to your account in Georgia only through a bank that has SWIFT or take it across the border in cash. The amount of currency carried across the border is not controlled.

People

Georgians are very friendly people, they treat Russians quite warmly. On the streets you can meet Arabs, Italians, African Americans, Indians, etc.

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