What is a Registered Agent?
A Registered Agent (also known as a Resident or Statutory Agent) is a person or business with a physical address in a particular jurisdiction designated to receive legal and government documents, such as lawsuits and tax notices, on behalf of a company.
In a number of countries, primarily those subject to Anglo-Saxon Law, in particular the USA, legislation explicitly forbids opening and conducting business without a registered agent.
Companies in some offshore jurisdictions, such as the British Virgin Islands, Cayman Islands, or Belize are also required to employ an agent.
A similar concept exists in places like Hong Kong and Singapore, where a Company Secretary, a qualified individual residing in the country or corporate entity serves as a legally mandated compliance officer and corporate governance expert.
So it should come as no surprise that many foreign entrepreneurs wonder if they need a special agent in Georgia, a jurisdiction with tax policies in many ways more advantageous than those of classic offshore jurisdictions.
Is a registered agent obligatory in Georgia?
Since Georgian legislation is a product of the Romano-Germanic Legal System, also known as Civil law, the term Registered Agent does not appear in local acts, and businesses, even those opened by foreign nationals, are not obligated to employ an intermediary to receive correspondence in Georgia.
But there is a catch of sorts.
Why businesses in Georgia may find agents useful
The fact is that Articles 5 and 11 of the Law of Georgia on Entrepreneurs require individual entrepreneurs (IE), branches, cooperatives, limited liability companies (LLC), and joint stock companies (JSC) registered in Georgia to have a legal address in Georgia, prescribed in the founding documents and entered into a special state register of the Ministry of Finance.
The legal address in Georgia must be physical, and there are two types of addresses: real and virtual.
- In the case of a real address, a company buys or rents a standard office, as trading and manufacturing companies operating in Georgia tend to do.
- In the case of a virtual address, the business uses the universal (physical) address of an intermediary, who, similar to a registered agent in the US, forwards all significant correspondence to the company. A virtual address is a great option for companies engaged in intellectual labor and not actively operating in Georgia. It also allows you to open a business in the country remotely.
Legal agencies help to rent premises and provide virtual addresses. But that’s not all.
One of the most important services they can provide is the drafting of articles of association and constituent documents needed for doing business both in Georgia and abroad. Properly executed documents also simplify the opening of an account in a local or international bank and various payment systems. An agent can immediately execute incorporation papers in two languages.
A comprehensive approach to the Georgian legal system
PB Services can provide foreign entrepreneurs with a range of services covering every stage of the business process, from registration to the timely resolution of business issues as they arise.
- Before entering into a contract, we always conduct a free 30-minute consultation to find out exactly what requirements your business will need to meet in Georgia.
- We choose the best form of business for you, whether a sole proprietorship paying 1% tax on turnover or a JSC or LLC reducing taxes to 0%.
- We draw up the documents needed for registration of a sole proprietorship or legal entity and accompany you to the House of Justice. If you do not plan to visit Georgia in person, we open a business in your name by power of attorney. If necessary, we can issue related licenses, for example, for cryptocompanies.
- We prepare the paperwork necessary to open a personal, investment, or corporate account in a Georgian or foreign bank and guide you through the confirmation of the origin of funds and compliance to avoid unnecessary questions.
- We help you figure out how to deal with taxes yourself or outsource bookkeeping to avoid delays in filing tax returns. We’ve already written about why businesses in Georgia need accounting and the risk of general taxation, missing out on benefits (including DTA), or facing penalties.
- If you are opening a real (rather than virtual) office in Georgia, we can recruit and outsource your staffing needs. Learn more about the local labor market here.
- Legal support: we help with a work visa or residence permit, tax residency, and other aspects of life in Georgia.
Individual registered agents: left holding the bag
We mentioned above that a registered agent can be a private individual. Such individuals registering a legal address for a business on their personal property exist in Georgia but should give you pause.
- Individuals wield the power to revoke a legal business address at will (without prior notice), potentially causing your business great harm. Essentially, you are arming them to hold you hostage to additional fees. So even if you pay less initially for registration, you’ll end up spending a dollar to save a dime.
- There is always a risk of breach of confidentiality as the individual at the address receives sensitive company correspondence.
- Finally, you will not receive help with documents for incorporation, opening a bank account, paying taxes, etc., meaning you’ll end up having to look for another contractor.
A professional legal agency that values its reputation, backs up its responsibility with contracts, and guarantees the safety of doing business can insure you against these eventualities.
Despite the fact a Registered Agent is not officially enshrined in Georgian legislation, business is brisk for local intermediaries providing foreign entrepreneurs with services in addition to a legal address and mailing. If you have any questions, don’t hesitate to use the form below to get in touch.