Our consultants can help investors conclude the company incorporation procedures specific to the cryptocurrency industry; you can also rely on our team on the formalities of obtaining the cryptocurrency license or finding out the latest cryptocurrency regulations approved by the Georgian authorities.
The bitcoin industry in Georgia is developing at a fast pace, as the country created in 2015 a free industrial zone in Tbilisi, the capital city of the country. The region aims at attracting local and international companies operating in the IT industry, including cryptocurrency businesses.
A cryptocurrency company designates a type of business which uses cryptography methods in order to secure virtual transactions. Investors interested in opening a company in Georgia should know that the country represents a major player for bitcoin activities, especially in the field of gambling operations.
Our team of company formation representatives in Georgia can offer in-depth advice on the registration of a cryptocurrency legal entity.
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The free industrial zone in Georgia
Cryptocurrency businesses interested in investing in Georgia may set their activities in the free industrial zone, a region dedicated to IT operations.
Thefree industrial zone is situated close to Tbilisi (at a distance of only 17 kilometers away from the city’s center) and it offers a preferential taxation scheme for companies that operate in the respective industries accepted there.
Investors who want to start the procedure of company registration in Georgia in thefree zone can benefit from relevant taxation exemptions. However, such companies will be required to pay the following taxes:
- lease tax;
- income tax on salaries for the persons employed by the companies.
A bitcoin center was also opened in Gldani, which represents the largest bitcoin data center of the country. Our team of company formation agents in Georgia can offer in-depth advice on the main benefits of registering a cryptocurrency business in this country.
What are the taxes charged on cryptocurrency activities in Georgia?
One of the best reasons to start the procedure of company formation in Georgia in this industry is represented by the low taxation system applicable here. In general, regardless of the business sector, Georgia has a low tax system, compared to neighboring countries or to European countries.
Currently, investors who want to open a cryptocurrency company in Georgia must know the following:
- • a corporate tax of 15% (the standard rate) will be charged as long as the crypto activities are carried through a legal entity;
- • a dividend tax of 5% can be imposed as well when the dividends are distributed amongst the shareholders;
- • please mind that at the moment, 2.89% of the Georgian population owns cryptocurrency;
- • this accounts for a total of 115,000 Georgian nationals;
- • the VAT can also be charged to crypto businesses, when they develop mining activities – the current VAT in Georgia is charged at a rate of 18%.
Is it necessary to apply for a crypto exchange license in Georgia?
Yes. Even though the law regarding cryptocurrency sector in Georgia does not cover all areas of business, with regards to the licensing requirements, the rules are very clear.
Businesses involved in this industry have to apply for a crypto exchange license in Georgia; this is also applicable when the business operation is carried in the free industrial zones that were set up in this country in the last few years.
Those who will need to apply for a crypto exchange license in Georgia must know that the document can be issued in approximately 5 to 10 business days (in general, the procedure for company formation in Georgia is simple and takes only few days).
Compared to other countries, this is a short amount of time that one has to wait in order to open a company in Georgia. The license grants several rights to its holder, such as:
- produce and issue cryptocurrency;
- make cryptocurrency payments;
- transfer virtual money by using specific methods.
What is the law on the Georgian cryptocurrency industry?
The existing rules of law applicable to the Georgian cryptocurrency industry are created by the National Bank of Georgia. The main rule of law that is applied to this industry is the Anti-Money Laundering Law.
The legislation will be developed in such a way that will include provisions that regulate the crypto market, as at the moment, for the year 2022, the law is still a draft law, that was created with the assistance of the International Monetary Fund.
Those who want to open a cryptocurrency company in Georgia must know that the purposes of the draft law are the following:
- to include regulations for as many cryptocurrency operations as possible;
- to provide a legal framework for the protection of the consumer;
- to regulate the cryptocurrency trading procedures;
- to provide regulations for the cryptocurrency trading platforms.
The need to better regulate this sector is required, as the cryptocurrency operations in Georgia are further developing.
Although Georgia is not a major player when we refer to the global context (it accounts for only 0.18% of the global crypto mining share – as measured in August 2021) its transaction volumes are significant.
For instance, in September 2020, the monthly transaction volumes registered for cryptocurrency exchange accounted for GEL 3.5-5 million (or EUR 1-1.5 million).
If you need further information on the current market context or advice on the procedure for obtaining the crypto exchange license in Georgia, please refer to our team. Our consultants can, of course, provide legal representation in the process of opening a cryptocurrency company in Georgia.
Reasons to invest in the bitcoin field in Georgia
The development of the bitcoin field in Georgia was a direct consequence of the attractive business environment available here. In this sense, it is important to know that foreign investors decided to start the procedure of company incorporation in Georgia in the bitcoin field due to the following:
- attractive investment environment;
- relevant taxation system;
- low corruption;
- competitive energy costs;
- competitive labor costs.
The registration procedure for these types of companies is performed following the standard incorporation requirements applicable under the local legislation.
Investors are invited to contact our team of consultants in company registration in Georgia for further advice on the cryptocurrency regulations applicable here.
Please mind that our consultants can offer legal assistance not only in the process imposed to businessmen who want to open a company in Georgia, but also in the steps that foreigners may need to complete before the arrival.
We refer here to the immigration procedures and more exactly, to the issuance of visas designed for business or investments and the issuance of a residence permit.