Crypto activity in Georgia in 2023
Georgia is an excellent choice if you plan to engage in the cryptocurrency business. The electricity is cheap there, and crypto-machines work successfully. Monthly transactions of large sums of money are made in digital assets. The taxes are low, the laws are flexible, and it's easy to become a cryptocurrency license holder. It is not the complete list of benefits that make it worthwhile to engage in cryptocurrency activities in Georgia in 2023.
Cryptocurrency and the Laws of Georgia
Cryptocurrency activity in Georgia is not legally regulated, so digital currency is not a legal means of payment in the country. The Georgia Revenue Service still needs to issue guidance on taxing most cryptocurrency transactions. That said, Public Resolution #201 was issued in 2019, which defines digital assets, as well as guidance on how to find out about the tax liability associated with them:
- An individual may not pay personal income tax on profits from crypto-assets.
- An entity that receives income from the sale of crypto-assets is exempt from VAT, but a 15% corporate tax must be paid. If the company does not pay dividends, and it directs them to the development of the company, it gets an exemption from income tax.
- Cryptocurrency exchange for local and foreign currency is exempt from VAT.
Mining is not subject to VAT if the recipient is registered outside Georgia and does not have a permanent establishment in the country, which is associated with receiving the service.
- Other important issues related to cryptocurrency activities, such as mining, storage, receipt, exchange of crypto-assets, etc. are still not regulated.
- Nevertheless, legal entities that plan to engage in cryptocurrency activities here need a license.
How to open a cryptocurrency business
To legally engage in cryptocurrency activities in Georgia, you need to follow these steps:
- Determine the direction of crypto activities: cryptocurrency exchange, cryptocurrency wallet services, token trading, mining, etc.
- Choose the appropriate type of company - LLC or JSC.
- Register a unique name in the National Registry.
- Register your business at the Register of Entrepreneurs. It is necessary to submit Articles of Association, documents defining the share of each founder, information about owners, authorized capital, business plan, etc.
- Get a tax number and an extract on the company registration.
- Choose the place of registration. Optimal option is the territory of Free Industrial Zone (Tbilisi, Kutaisi, or Poti), which offers profit tax exemption, dividends, and other benefits.
- Open a corporate account with a bank in Georgia.
Getting a cryptocurrency license
After registering a company, you need to get a cryptocurrency license. It will allow you to legally buy and sell cryptocurrencies, provide cryptocurrency storage services, conduct transactions, etc.
To get a crypto license in Georgia, you have to:
- Provide data on all owners and beneficiaries of the company, including foreigners.
- Confirm the level of solvency of the company.
- Provide certificates confirming that the directors and beneficiaries do not have a criminal record.
- Develop a detailed business plan, which includes a list of services and a detailed description of methods of protection against hackers.
- The organization, which will receive a cryptolicense must keep accounting and constantly undergo inspections. If it plans to engage in the crypto exchange and/or offer cryptocurrency storage services, it must warn the regulator about all changes in its functioning, especially about bankruptcy or temporary termination of activities.
How to open a cryptocurrency company quickly
Contact IT-OFFSHORE to start a business and get a cryptocurrency license in Georgia.