How to Start a Business in Georgia: A Legal Guide by JUST Advisors
16 June 2025
Georgia has held leading positions for several years in rankings of ease of doing business — according to statistics from the Ministry of Justice, the number of companies and individual entrepreneurs registering annually is indeed growing.
Based on our observations, two sectors — IT and hospitality (from tourist companies to restaurants) — are developing especially dynamically. Are you dreaming of a cozy café, a trendy bar, or an authentic restaurant in this hospitable country? In this article, we will focus specifically on the hospitality sector (bars, restaurants, cafés), leaving the IT sector for other publications of ours.
JUST Advisors understands that your success begins not only with a creative concept and excellent menu but also with sound legal planning. Mistakes made at the start, due to a lack of knowledge of local legislation, can lead to significant financial and time losses. Therefore, before diving into the world of Georgian entrepreneurship, it is essential to address key questions and build a solid legal foundation. In this article, we share our experience and offer a detailed checklist that will help you avoid costly mistakes and confidently step toward success. We won’t just list facts but will also explain their significance for your future enterprise.
"The Golden Dozen" Key Legal Questions to Ask Yourself Before Opening a Business in Georgia:
Based on our observations, two sectors — IT and hospitality (from tourist companies to restaurants) — are developing especially dynamically. Are you dreaming of a cozy café, a trendy bar, or an authentic restaurant in this hospitable country? In this article, we will focus specifically on the hospitality sector (bars, restaurants, cafés), leaving the IT sector for other publications of ours.
JUST Advisors understands that your success begins not only with a creative concept and excellent menu but also with sound legal planning. Mistakes made at the start, due to a lack of knowledge of local legislation, can lead to significant financial and time losses. Therefore, before diving into the world of Georgian entrepreneurship, it is essential to address key questions and build a solid legal foundation. In this article, we share our experience and offer a detailed checklist that will help you avoid costly mistakes and confidently step toward success. We won’t just list facts but will also explain their significance for your future enterprise.
"The Golden Dozen" Key Legal Questions to Ask Yourself Before Opening a Business in Georgia:
1. Business Alone or with Partners? Choosing the Legal Form
Choosing the right legal form is the first and one of the most important steps that determines your liability and tax burden. In Georgia, two forms are most suitable for the hospitality sector (bars, restaurants, cafes): Individual Entrepreneur (IE) and Limited Liability Company (LLC).
1) Individual Entrepreneur (IE): Simplicity and Liability
Registration process:
Simple and fast, possibly even remotely via a power of attorney (although we recommend in-person presence or a thorough verification of the power of attorney to minimize risks). State fee: 26 GEL (standard) or 75 GEL (urgent).
Required documents: Passport (with notarized translation into Georgian), Georgian mobile number, email address, legal address in Georgia.
Key nuance: An IE bears full personal liability for obligations with all of their property. This is important to understand, even with the attractive 1% tax rate for "small businesses."
Tax regime: For IE with an annual turnover of up to 500,000 GEL, the "small business" status applies with a 1% tax rate on turnover. Activities in the hospitality sector (bars, restaurants, cafes) usually fall under this regime. However, remember the VAT threshold of 100,000 GEL — once this is reached, you become subject to VAT (18%), which significantly complicates reporting and increases the financial burden.
2) Limited Liability Company (LLC): Flexibility and Asset Protection
Registration process: Carried out at the Justice House. Requires a legal address (confirmed by an extract or agreement with the owner on its use/notarized consent), founders' passports, and the LLC charter. State fee: 200 GEL (standard) or 400 GEL (urgent).
Key advantage: Limited liability for the founders — you only risk up to the amount of your contribution to the capital.
Charter capital: No minimum charter capital is required for LLCs in Georgia, making this form accessible.
Tax regime: Standard corporate income tax of 15% (paid on dividend distribution), VAT 18% (for turnover over 100,000 GEL).
1) Individual Entrepreneur (IE): Simplicity and Liability
Registration process:
Simple and fast, possibly even remotely via a power of attorney (although we recommend in-person presence or a thorough verification of the power of attorney to minimize risks). State fee: 26 GEL (standard) or 75 GEL (urgent).
Required documents: Passport (with notarized translation into Georgian), Georgian mobile number, email address, legal address in Georgia.
Key nuance: An IE bears full personal liability for obligations with all of their property. This is important to understand, even with the attractive 1% tax rate for "small businesses."
Tax regime: For IE with an annual turnover of up to 500,000 GEL, the "small business" status applies with a 1% tax rate on turnover. Activities in the hospitality sector (bars, restaurants, cafes) usually fall under this regime. However, remember the VAT threshold of 100,000 GEL — once this is reached, you become subject to VAT (18%), which significantly complicates reporting and increases the financial burden.
2) Limited Liability Company (LLC): Flexibility and Asset Protection
Registration process: Carried out at the Justice House. Requires a legal address (confirmed by an extract or agreement with the owner on its use/notarized consent), founders' passports, and the LLC charter. State fee: 200 GEL (standard) or 400 GEL (urgent).
Key advantage: Limited liability for the founders — you only risk up to the amount of your contribution to the capital.
Charter capital: No minimum charter capital is required for LLCs in Georgia, making this form accessible.
Tax regime: Standard corporate income tax of 15% (paid on dividend distribution), VAT 18% (for turnover over 100,000 GEL).
Table 1: Comparison of IE and LLC for the Restaurant Business in Georgia
2. Partner Business — Formalize All Agreements "Upfront"
If you decide to open a business with partners, it is crucial to formalize all agreements in writing. In Georgia, the new "Entrepreneurship Law" (since 2022) renders unregistered partnership agreements invalid. This means that "gentlemen's agreements" may not have legal force. What’s important to agree on:
● Clear distribution of contributions: Define what each partner brings: money, property, intellectual property, or labor. Evaluate each partner’s contribution.
● Profit and loss distribution mechanism: Set the percentage ratio or other metrics. The general rule is that profit is distributed according to each partner’s share but can be modified by the parties' agreement.
● Areas of responsibility: Distribute roles and duties (director, operations, marketing, finances) to avoid duplication and conflicts.
Partnership agreement: We recommend developing a custom charter and signing a full partnership agreement that complies with Georgian law to protect the interests of all parties (the agreement is not registered in the Public Registry but has the force of a contract and is legally protected).
● Clear distribution of contributions: Define what each partner brings: money, property, intellectual property, or labor. Evaluate each partner’s contribution.
● Profit and loss distribution mechanism: Set the percentage ratio or other metrics. The general rule is that profit is distributed according to each partner’s share but can be modified by the parties' agreement.
● Areas of responsibility: Distribute roles and duties (director, operations, marketing, finances) to avoid duplication and conflicts.
Partnership agreement: We recommend developing a custom charter and signing a full partnership agreement that complies with Georgian law to protect the interests of all parties (the agreement is not registered in the Public Registry but has the force of a contract and is legally protected).
3. Citizenship of Partners and CEO: Nuances for Foreigners
Georgia welcomes foreign entrepreneurs, but there are important nuances, especially when hiring a foreign director or employees.
● Appointment of Director (CEO): A director can be a non-resident. However, like a Georgian citizen director, they must give written consent to perform this function.
● Employment contract: It is essential to conclude a separate agreement with the director, defining the terms of appointment, powers, and remuneration. However, if the director also acts as an employee of the company, a labor contract must be concluded with them.
For information on how a director, partner, or foreign employee can obtain temporary residence in Georgia, see our article: Temporary Residence in Georgia: Grounds and Procedure
● Appointment of Director (CEO): A director can be a non-resident. However, like a Georgian citizen director, they must give written consent to perform this function.
● Employment contract: It is essential to conclude a separate agreement with the director, defining the terms of appointment, powers, and remuneration. However, if the director also acts as an employee of the company, a labor contract must be concluded with them.
For information on how a director, partner, or foreign employee can obtain temporary residence in Georgia, see our article: Temporary Residence in Georgia: Grounds and Procedure
4. Choosing and Checking the Company Name: Legal Uniqueness
Your company name is not just a brand but a legally significant identifier.
- Uniqueness check: It is mandatory to check your chosen name in the Entrepreneurs and Non-Profit Legal Entities Registry of Georgia. Duplication or similarity to the point of confusion can result in registration refusal and legal disputes.
- Risk protection: A thorough preliminary check helps avoid registration delays and potential trademark issues in the future.
5. Working Through a Bank Account and/or Payment Systems
To conduct legal and efficient business in Georgia, it is crucial to understand the specifics of using bank accounts and international payment systems.
1) Bank Transfers and Accounts in Georgia:
Georgian banks (TBC Bank, Bank of Georgia, Credo, Liberty, etc.) conduct international operations in accordance with the "Currency Regulation Law." The official currency for transactions is the lari (GEL). Foreign currency amounts received from abroad do not have to be compulsorily converted if they remain in the account or are used abroad. However, all transactions within the country must be made in lari.
Opening an account for IE/companies: The procedure is not automatic. Banks conduct enhanced due diligence (Enhanced Due Diligence), assessing the "substance" (real presence and business activity in Georgia): office lease agreement, client contracts, employee labor contracts.
2) International Payment Systems:
The use of international payment platforms (Payoneer, Wise, Stripe) is allowed if the transactions do not violate Georgian law (AML/KYC, tax requirements).
Supported platforms:
● Payoneer: Supported, allows receiving payments from freelance platforms/marketplaces (Upwork, Amazon, Fiverr, Airbnb), withdrawing funds to Georgian accounts.
● Wise (TransferWise): Supported, provides multi-currency details, supports withdrawals to Georgian banks. Does not support receiving funds from marketplaces.
● PayPal: Limited support. A Georgian address can be used to register an account, but not for a company. Withdrawal to a company account is possible by linking a corporate card to a personal account.
Important: The method of receiving funds does not affect taxation. All income received through payment systems must be declared.
For more details, read our article: "International Transactions in Georgia"
1) Bank Transfers and Accounts in Georgia:
Georgian banks (TBC Bank, Bank of Georgia, Credo, Liberty, etc.) conduct international operations in accordance with the "Currency Regulation Law." The official currency for transactions is the lari (GEL). Foreign currency amounts received from abroad do not have to be compulsorily converted if they remain in the account or are used abroad. However, all transactions within the country must be made in lari.
Opening an account for IE/companies: The procedure is not automatic. Banks conduct enhanced due diligence (Enhanced Due Diligence), assessing the "substance" (real presence and business activity in Georgia): office lease agreement, client contracts, employee labor contracts.
- Reasons for bank refusal: Lack of substance, questionable capital origin, connection to high-risk/sanctioned countries, unconfirmed business activity
- Recommendation: Start with opening a personal account — this often simplifies the process of opening a business account.
2) International Payment Systems:
The use of international payment platforms (Payoneer, Wise, Stripe) is allowed if the transactions do not violate Georgian law (AML/KYC, tax requirements).
Supported platforms:
● Payoneer: Supported, allows receiving payments from freelance platforms/marketplaces (Upwork, Amazon, Fiverr, Airbnb), withdrawing funds to Georgian accounts.
● Wise (TransferWise): Supported, provides multi-currency details, supports withdrawals to Georgian banks. Does not support receiving funds from marketplaces.
● PayPal: Limited support. A Georgian address can be used to register an account, but not for a company. Withdrawal to a company account is possible by linking a corporate card to a personal account.
Important: The method of receiving funds does not affect taxation. All income received through payment systems must be declared.
For more details, read our article: "International Transactions in Georgia"
6. Brand Protection: Trademark Registration with Sakpatenti
For the hospitality sector, where branding and recognition play a decisive role, legal protection of your name and logo is a necessity.
● Exclusive right: Registering a trademark with Sakpatenti (the National Intellectual Property Center of Georgia) gives you the exclusive right to use your establishment’s name and/or logo.
● Protection from competitors: This guarantees that no one else can use a similar name or logo, protecting your business from unfair competition.
Read more about brand protection and trademark registration in Georgia in our article: "Trademark Registration in Georgia"
● Exclusive right: Registering a trademark with Sakpatenti (the National Intellectual Property Center of Georgia) gives you the exclusive right to use your establishment’s name and/or logo.
● Protection from competitors: This guarantees that no one else can use a similar name or logo, protecting your business from unfair competition.
Read more about brand protection and trademark registration in Georgia in our article: "Trademark Registration in Georgia"
7. Renting a Premises: Legal Details Defining Success
Choosing and legally formalizing a premises is one of the most responsible stages. JUST Advisors will help you address all the details.
● Checking the owner and status of the premises: For subsequent taxation of rent, it is important to determine the owner (legal or natural person) and the status of the premises (residential or commercial).
● Special requirements for the premises — checks before opening: The premises must meet production safety and HACCP requirements, but inspections by fire services, SES, and others are not conducted before opening. Every café must have an in-house or contracted production safety specialist who ensures compliance with established requirements.
● Signage on the facade: In Tbilisi and other cities, there are restrictions on the size, location, and appearance of signage. Georgian text must be the primary, and foreign text should not exceed it in size. Placing signage on the façade requires approval from the city hall, and often from the homeowners' association.
● Use of adjacent territory (outdoor terraces): Placing tables on the street requires permission from the municipality, which may include a fee for the use of public space. We will accompany you through all stages of obtaining such permissions.
● Surveillance cameras/audio: Compliance with the Personal Data Protection Law: The "Personal Data Protection Law" regulates the use of surveillance cameras. You must define the purpose, volume, storage period, access rights, and destruction process in writing and display warning signs. Non-compliance with these rules may lead to fines.
● Regulation of tobacco smoking: According to the "Tobacco Control Law of Georgia," smoking tobacco (including hookah tobacco) is prohibited in any buildings or structures, including bars, restaurants, and cafes, with a few exceptions (e.g., cigar bars, casinos). Smoking tobacco is only allowed outside, provided the smoking area is not a "building or structure" (e.g., a veranda, terrace, canopy, where less than half of the surface is closed by walls/windows/doors), located more than 50 meters from educational institutions, and not on public property. Smoking non-tobacco mixtures (hookahs without tobacco) is not subject to the law since it only regulates tobacco products.
● Playing audio/video content: To publicly play music, video, or other copyrighted content in your establishment (café, bar, restaurant), you need to sign an agreement with a specialized organization and pay royalties. Otherwise, you will face a fine.\
● Noise level control: Georgia regulates permissible acoustic noise levels in residential and public spaces according to Government Resolution No. 398 of August 15, 2017. For restaurants, cafes, and bars, the permissible level is 50 dBA both day and night. On adjacent territories — up to 60 dBA during the day. Local municipalities may set special regimes for tourist and entertainment areas, where permissible noise levels can be higher. Monitoring is carried out by state and/or municipal authorities. Checks may be conducted based on citizen complaints or scheduled. In case of exceeding the norms, fines are imposed: for legal entities/IEs from 1,500 to 10,000 GEL for the third and subsequent violations.
If you decide to purchase commercial property for your business, read our article: "Commercial Real Estate in Georgia: How to Register and Pay Taxes"
● Checking the owner and status of the premises: For subsequent taxation of rent, it is important to determine the owner (legal or natural person) and the status of the premises (residential or commercial).
● Special requirements for the premises — checks before opening: The premises must meet production safety and HACCP requirements, but inspections by fire services, SES, and others are not conducted before opening. Every café must have an in-house or contracted production safety specialist who ensures compliance with established requirements.
● Signage on the facade: In Tbilisi and other cities, there are restrictions on the size, location, and appearance of signage. Georgian text must be the primary, and foreign text should not exceed it in size. Placing signage on the façade requires approval from the city hall, and often from the homeowners' association.
● Use of adjacent territory (outdoor terraces): Placing tables on the street requires permission from the municipality, which may include a fee for the use of public space. We will accompany you through all stages of obtaining such permissions.
● Surveillance cameras/audio: Compliance with the Personal Data Protection Law: The "Personal Data Protection Law" regulates the use of surveillance cameras. You must define the purpose, volume, storage period, access rights, and destruction process in writing and display warning signs. Non-compliance with these rules may lead to fines.
● Regulation of tobacco smoking: According to the "Tobacco Control Law of Georgia," smoking tobacco (including hookah tobacco) is prohibited in any buildings or structures, including bars, restaurants, and cafes, with a few exceptions (e.g., cigar bars, casinos). Smoking tobacco is only allowed outside, provided the smoking area is not a "building or structure" (e.g., a veranda, terrace, canopy, where less than half of the surface is closed by walls/windows/doors), located more than 50 meters from educational institutions, and not on public property. Smoking non-tobacco mixtures (hookahs without tobacco) is not subject to the law since it only regulates tobacco products.
● Playing audio/video content: To publicly play music, video, or other copyrighted content in your establishment (café, bar, restaurant), you need to sign an agreement with a specialized organization and pay royalties. Otherwise, you will face a fine.\
● Noise level control: Georgia regulates permissible acoustic noise levels in residential and public spaces according to Government Resolution No. 398 of August 15, 2017. For restaurants, cafes, and bars, the permissible level is 50 dBA both day and night. On adjacent territories — up to 60 dBA during the day. Local municipalities may set special regimes for tourist and entertainment areas, where permissible noise levels can be higher. Monitoring is carried out by state and/or municipal authorities. Checks may be conducted based on citizen complaints or scheduled. In case of exceeding the norms, fines are imposed: for legal entities/IEs from 1,500 to 10,000 GEL for the third and subsequent violations.
If you decide to purchase commercial property for your business, read our article: "Commercial Real Estate in Georgia: How to Register and Pay Taxes"
8. Hiring Employees: Georgian Citizens or Foreigners?
Staffing issues are not only about finding talent but also strictly complying with labor and immigration laws.
● Hiring Georgian citizens: The hiring procedure is relatively simple. It is important to properly formalize the employment contract in accordance with Georgia’s Labor Code, specifying all terms: salary, working hours,休 days, etc.
● Hiring foreigners: There are no restrictions on hiring foreigners in Georgian companies. If a foreigner is in Georgia legally, they can work without special permits. Starting from September 1, 2023, the employer must register the foreign employee in the Ministry of Labor’s unified database within 30 days of signing the contract, attaching the labor contract in Georgian. We will help you go through this process and also arrange any necessary work permits and, if needed, work residence permits.
● Social security contributions: Georgia operates a cumulative pension system for citizens and permanent residents: both the employer and employee contribute 2% of the employee’s gross salary.
Read more in our article: "What You Need to Know About Hiring Foreigners in Georgia"
● Hiring Georgian citizens: The hiring procedure is relatively simple. It is important to properly formalize the employment contract in accordance with Georgia’s Labor Code, specifying all terms: salary, working hours,休 days, etc.
● Hiring foreigners: There are no restrictions on hiring foreigners in Georgian companies. If a foreigner is in Georgia legally, they can work without special permits. Starting from September 1, 2023, the employer must register the foreign employee in the Ministry of Labor’s unified database within 30 days of signing the contract, attaching the labor contract in Georgian. We will help you go through this process and also arrange any necessary work permits and, if needed, work residence permits.
● Social security contributions: Georgia operates a cumulative pension system for citizens and permanent residents: both the employer and employee contribute 2% of the employee’s gross salary.
Read more in our article: "What You Need to Know About Hiring Foreigners in Georgia"
9. Product Questions: Licenses, Certification, and Sanitary Standards (HACCP)
The hospitality sector is under strict control regarding food safety and services.
● Sanitary standards and HACCP: Implementing a Hazard Analysis and Critical Control Points (HACCP) system has become mandatory for most food operators. This includes strict requirements for equipment, finishes, regular pest control, and laboratory tests.
● Product and service certification: Georgia requires mandatory certification of products and services related to environmental, life, and health safety. The activities of food establishments (cafés, bars, restaurants) must be registered in the registry of economic activities. Each point where products are produced/stored/sold must be registered. Annual re-registration is mandatory.
● Alcohol sales: Licensing and certification. An alcohol license is not required, but alcohol sales are only possible if the products have excise stamps (for foreign alcohol) or certificates (for Georgian alcohol).
● Sanitary standards and HACCP: Implementing a Hazard Analysis and Critical Control Points (HACCP) system has become mandatory for most food operators. This includes strict requirements for equipment, finishes, regular pest control, and laboratory tests.
● Product and service certification: Georgia requires mandatory certification of products and services related to environmental, life, and health safety. The activities of food establishments (cafés, bars, restaurants) must be registered in the registry of economic activities. Each point where products are produced/stored/sold must be registered. Annual re-registration is mandatory.
● Alcohol sales: Licensing and certification. An alcohol license is not required, but alcohol sales are only possible if the products have excise stamps (for foreign alcohol) or certificates (for Georgian alcohol).
10. Налогообложение для Вашего бизнеса: Выбор оптимального режима
Choosing the tax regime is one of the key decisions affecting the profitability of your business. We will help you choose the optimal option.
● Small business status (1%): Available for IEs with an annual turnover of up to 500,000 GEL. The tax rate is 1% of turnover. Employees can be hired.
● VAT threshold (18%): If your annual income exceeds 100,000 GEL over any 12 consecutive months, you must register as a VAT payer. This is important to consider when planning.
● Other taxes: Income tax (NDFL) — 20%; Corporate income tax for LLCs — 15%; Dividend tax — 5%. Pension contributions (employer and employee) — 2%.
For detailed information on all taxes in Georgia, read our article: "Tax Guide in Georgia"
● Small business status (1%): Available for IEs with an annual turnover of up to 500,000 GEL. The tax rate is 1% of turnover. Employees can be hired.
● VAT threshold (18%): If your annual income exceeds 100,000 GEL over any 12 consecutive months, you must register as a VAT payer. This is important to consider when planning.
● Other taxes: Income tax (NDFL) — 20%; Corporate income tax for LLCs — 15%; Dividend tax — 5%. Pension contributions (employer and employee) — 2%.
For detailed information on all taxes in Georgia, read our article: "Tax Guide in Georgia"
Table 2: Overview of Tax Regimes for the Restaurant Business in Georgia
11. Sales: Where and How? Offline, Delivery, Online
Modern restaurant business is rarely limited to just physical presence.
● Only in cafe/restaurant/shop: This is the simplest option.
● Glovo/Wolt and other delivery platforms: Cooperation with aggregators requires signing contracts, complying with their terms, and possibly adapting the menu for delivery.
● Menu adaptation: According to Georgian legislation, information about the service provider and the product must be in the state language. Menus in restaurants/bars/cafes must be in the Georgian language!
● Only in cafe/restaurant/shop: This is the simplest option.
● Glovo/Wolt and other delivery platforms: Cooperation with aggregators requires signing contracts, complying with their terms, and possibly adapting the menu for delivery.
● Menu adaptation: According to Georgian legislation, information about the service provider and the product must be in the state language. Menus in restaurants/bars/cafes must be in the Georgian language!
12. Social Media and Online Presence: Georgian Language and Personal Data Protection
In the modern world, a successful business is hard to imagine without an online presence.
- Platform choice: Website, Instagram, Facebook — choose the platforms most relevant to your target audience. Develop a content and promotion strategy.
- Protection of personal data in the online space: In Georgia, sending unsolicited advertising via SMS and email without prior consent is prohibited. The new Law "On Personal Data Protection" introduces a number of additional obligations for persons processing personal data (for example, from loyalty programs). Violations may result in fines of up to 2,000 GEL.
Conclusion
Ready to start? Or do you have new questions after reading this list? Contact us — we’ll help you understand and provide comprehensive legal support for your business in Georgia.
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MARIA GUSEINOVA
Leading Manager of Commercial Department
Leading Manager of Commercial Department