Eternity Law International News Virtual zones in Georgia

Virtual zones in Georgia

December 9, 2020

Attracting investments is a great stimulus for the development of the Georgian economy. This was the reason for the adoption in the country of a law expanding virtual zones in Georgia, which provides for tax exemptions for companies involved in the computer technology. Such companies in the state will not pay national taxes.

Registration of a virtual enterprise in Georgia

The main goal of the Georgian government in the field of information technology is to create such conditions for doing business that would facilitate the inflow of investments and the development of this industry.

Based on the articles of the law on virtual zones, tax incentives are provided to companies developing the IT sector. Persons who have received virtual status are exempted from paying national taxes. In addition, they are exempt from paying a number of other taxes: income, value added, customs.

Now it has become much easier to open an IT technology company in Georgia. This applies to the procedure for registering it and paying taxes. A person who has received a virtual zone confirmation certificate can carry out the company’s activities without third-party regulation.

Now all legal entities that want to open such a business are not required to obtain a license. The simplification of the registration procedure has attracted more foreign companies that want to deal with computer technologies in Georgia.

This law is aimed at developing computer technologies in the country and attracting new investments. The certificates confirming this status can now be obtained electronically. In order to obtain it, the person concerned needs to contact the relevant authorities. The deadline for receiving the document is during the working day.

To put the law into practice, the Georgian government has made a number of amendments to the normative and legislative acts to comply with the adopted law. The Tax Code has also undergone a number of changes that relate to preferential taxation of companies operating in the IT sector in Georgia.

Prime Minister Nika Gilauri said about the new law in such a way that it will contribute to the development of computer technologies. She also added that now in Georgia there are special virtual zones where companies are exempt from paying taxes.

But according to this law, the entire territory of the country will become such where there is no taxation for companies that are engaged in computer technology. After several years, we can say that Nika Gilauri’s words have been confirmed because Georgia has become an attractive region for doing business in the IT sector.

It has become much easier and more profitable to start and operate. This led to the rapid development of the information business.

Procedure for obtaining the status of a virtual zone

The activities of companies engaged in computer technology are governed by the adopted legislation and regulations.

Particular attention in the law on virtual zones is paid to the procedure and procedure for obtaining a status confirming the person of a virtual zone. In order to obtain this status, you need to contact a person authorized by the government. The status is assigned within 10 days after the request.

After that, the person who received the status needs to receive an electronic certificate. It can now be obtained within 48 hours after obtaining the status of a virtual zone person.

Legal entities that have received a certificate in electronic form can start their activities without a license and other documents. Persons who have been assigned the status of a virtual zone person must engage in economic activities that develop the information industry in the country.

After the entry into force of this law, the tax has ceased to be withdrawn from:

  • profits that came from supplies outside the administrative border of Georgia;
  • deliveries that were carried out abroad, including VAT;
  • exports that occurred as export payment from customs.

With the enactment of this law, the Georgian IT market began its rapid development. It became interesting for foreign companies, which primarily assess the possible risks. They started making software on the territory of Georgia, which turns out to be not very expensive at the end. This law has created favorable conditions for the development of business in the IT sector.

The simplified registration procedure contributes to an even greater interest in doing business in the field of computer technology in Georgia. By visiting the online resource of the government of Georgia, interested persons can go through the procedure for obtaining an electronic certificate, which will be needed to conduct business in the IT sector.

Please, contact Eternity Law International for getting legal assistance.

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