Georgia is a favorable jurisdiction for cryptocurrency business. Gofaizen & Sherle provides professional support in obtaining a crypto license in Georgia
Before obtaining a license for cryptocurrency in Georgia, it is necessary to create a company. It is recommended to do this in the Free Industrial Zone (FIZ) territory, which provides preferential taxation and other favorable conditions. There is no mandatory authorized capital. However, it should be noted that the company must provide a realistic business plan.
Georgia is on the list of countries with a legal regime allowing international dealers to work with cryptocurrencies. This country is open to crypto, thanks to favorable tax conditions, soft laws, and liberal government.
Up until recently, the cryptocurrency sector in Georgia operated without any legislative regulation by the government. Nevertheless, in early 2023, the authorities introduced new regulations concerning cryptocurrency activities. Consequently, on July 1, 2023, the Law on Virtual Asset Service Provider (VASP) Registration Procedure came into force.
Request more information about the Georgia Crypto License
Each company that wants to engage in business activities in virtual currencies must obtain a crypto license in Georgia. It will allow you to legally carry out operations for the purchase and sale of cryptocurrency, with the possibility of providing services for storing it in wallets and conducting transactions.
With the correct execution of all necessary documents, obtaining a license for a crypto exchange in Georgia is easy and takes up to 2 months.
Favorable environment for the development of the crypto business
Georgia is one of the most supportive countries in the world regarding cryptocurrencies. Due to the low cost of electricity, mining is flourishing, and cryptomats are successfully functioning. Transactions worth up to 5 million lari (1.6 million USD) are conducted monthly in the country in the cryptocurrency markets. Taxes on operations with digital assets are low, the laws are flexible, and obtaining a license for a crypto exchange in Georgia in 2023 is easy if all the conditions of the regulator are met.
Fast terms for obtaining a crypto license in Georgia
You can quickly register a company and obtain the necessary license in Georgia. On average, this process takes about 2-3 months in total, which is significantly different from the processing time in other jurisdictions, which can take up to 6-9 months. This advantage substantially saves time for entrepreneurs and investors and allows you to start a business quickly.
No minimum authorized capital
In Georgia, there is no minimum authorized capital for company registration. Entrepreneurs can start their businesses with any amount per their industry's requirements. Such a flexible approach allows small and medium-sized companies to start their work without restrictions, contributing to developing the country's economy and attracting investment.
Economic benefit
The cost of license registration is only 5000 GEL (2000 USD), which is an extremely low fee compared to other countries. In addition, there is no annual license renewal fee in Georgia. This not only reduces regular expenses but also makes the license management process easier. You won't need to plan for annual fees and budget to cover them.
Favorable Tax Regime
Georgia offers unique tax advantages: with a 15% corporate tax rate and only 5% for dividends, the country is a favorable place for cryptocurrency companies.
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Documents required:
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Stage 4
*done simultaneously with Stage 3
To obtain a crypto license in Georgia, you must perform the following steps:
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Until recently, the Georgian government did not regulate the cryptocurrency sector on a legislative basis. However, in early 2023, new regulations regarding cryptocurrency activities were prescribed, and on July 1, 2023, the Law on Virtual Asset Service Provider (VASP) Registration Procedure came into force.
The purpose of this legislation is to prevent the use of virtual assets, including cryptocurrencies, for illicit purposes such as money laundering and terrorist financing. This is because these assets have a high level of anonymity, leading to difficulties in tracking transactions. Thus, the new law is designed to increase control and transparency in this sector. Consequently, every company holding a Georgian crypto license is obliged to comply with AML/KYC regulations.
The law does not grant cryptocurrency the status of a means of payment, and the only legal currency is the Georgian lari. At the same time, the new regulations prohibit the use of a virtual asset on a par with legal tender.
A virtual asset is defined as a digital unit of value. It has interchangeability but is not unique. It can be transferred or sold electronically, serving as a means of payment or investment. Interestingly, a virtual asset does not denote a digital form of cash, securities, or other financial instruments. Objects like NFTs and collectibles do not fall under the new rules. At the same time, cryptocurrency is an object of regulation.
According to the new legislation, each cryptocurrency company must register with the National Bank and obtain a license for its activities.
A licensed VASP is authorized to provide the following services:
To open a crypto company in Georgia, you need to follow the following steps:
List of documents required to register a company in Georgia:
Registering a company in a free industrial zone (FIZ) in Tbilisi, Kutaisi, or Poti to receive benefits is better. Companies registered in these zones are exempt from income tax and dividends tax. At the same time, even foreign investors can be owners of enterprises.
Currently, there are free zones in Georgia located in the following areas:
Regarding the taxation of cryptocurrencies, one should again refer to the public Decision N201. The Ministry of Finance made the following decisions:
At the same time, cryptocurrency companies must pay corporate fees on profits, including those earned abroad. Companies should pay a tax of 15% on each transaction if they receive a profit from it.
From 01.01.2017, the "Estonian model" of taxation was introduced in Georgia, which is based on the principle of taxation exclusively from distributed profits. This means that in a situation where enterprises do not pay dividends and instead direct funds to corporate development, they are exempt from paying income tax.
Recall that you should consider opening a company in the FIZ of Georgia if you want to receive tax benefits. Main advantages:
The Georgian government has pledged to launch the Common Reporting Standard (CRS) throughout 2023. The government believes that introducing CRS will increase the country's budget, as it helps identify the income of taxpayers who have previously evaded the introduction and payment of taxes. Georgia will join 113 countries that have already implemented automatic exchange.