Requirements for obtaining and maintaining virtual zone status

To obtain the status of a virtual zone in Georgia, a company must meet a number of requirements. The first step is mandatory registration of a legal entity in Georgia. The most common and recommended legal form for IT companies is a Limited Liability Company (LLC). The process of registering an LLC in Georgia usually takes only one or two business days and does not require a minimum authorized capital. The simplicity and speed of registration make Georgia an attractive jurisdiction for a quick start of an IT business.

After registering a legal entity, it is necessary to apply for the status of a virtual zone. The application is submitted to the Financial and Analytical Service of Georgia. Some sources also mention the Ministry of Finance or the Revenue Service, which may indicate a connection between these agencies in the application review process. The application is often submitted electronically through the official website of the Financial and Analytical Service.

A number of documents must be attached to the application, confirming the company’s compliance with the requirements of the virtual zone. The general package of documents usually includes the company’s constituent documents (charter, resolution on establishment), information on beneficiaries and directors, a detailed description of the company’s activities with an emphasis on the IT direction, as well as documents confirming the IT projects implemented by the company over the past three years, including contracts with clients. If the documents are issued outside of Georgia, they may require notarization, apostille or legalization, as well as translation into Georgian and re-notarization.

The nature of the company’s activities is one of the key requirements for obtaining the status. As already noted, preference is given to companies engaged in the creation and support of software and information systems. This includes the development of software, SaaS solutions, mobile applications, as well as research, design, production and implementation of computer information systems. Companies whose activities are primarily related to IT consulting, Internet marketing or e-commerce without a significant software development component may encounter difficulties in obtaining the status.

In recent years, there has been an increase in the requirements for the economic presence of a company in Georgia in order to obtain and maintain the status of a virtual zone. Although formally there may be no requirements for the presence of an office and employees, in practice, companies demonstrating some economic presence have a significantly higher chance of having their application approved. Economic presence usually means having a registered office in Georgia, a Georgian phone number, a corporate bank account with a local bank and, most importantly, the employment of qualified IT specialists who are residents of Georgia. Although there is no legal requirement to hire local employees, failure to do so may result in the application being rejected. Thus, despite the name virtual zone, a real connection to Georgia is becoming increasingly important to successfully obtain and maintain this status.