How to set up a crypto business in Georgia? Georgia is among one of the top mining countries in the world. It doesn’t have any legislative restrictions for crypto exchange and doesn’t require a license for this activity. The Georgian government is selling energy half a price compared to Europe and US. 10% percent of its energy output goes into the currency endeavor. It has created tax-free zones to attract foreign investors. In March 2020 well-known Internet portal 99bitcoins.com included Georgia in the top 10 bitcoin-friendly countries.
This business is very popular in Georgia. Totally 100 000 people are busy with cryptocurrency mining throughout the country.
Why should you do Cryptocurrency mining in Georgia?
Georgia does not have regulatory restrictions on cryptocurrency trading in Georgia and doesn’t have special legislation. So both miners’ and traders’ exchanges can be managed without a hassle when registered in Georgia.
Georgia imposes only 15% corporate tax on worldwide-distributed income and Reinvested profits are tax-free if there isn’t a dividend distribution throughout a year.
The cheap utility made Georgia the third biggest Bitcoin mining hub after China and Venezuela.
No Vat payable on crypto arbitrage.
How to set up a crypto business in Georgia?
First, the documents should be prepared and need lawyers’ to help, then register a company on National Agency of Public Registry (needs 1 working day), then open a corporate bank account, find a physical warehouse solution for mining operations. No limitations apply to foreign shareholders, and no minimum capital contribution is required.
According to the Georgian Ministry of Finance, if a person becomes a resident of Georgia, he/she will not be taxed on the profit generated from selling cryptocurrency, neither VAT will be applicable on such transaction. If a legal entity in Georgia does the same activity, no VAT is payable in that case as well but CIT of 15% and withholding tax 5% will be due only in case of distributing dividends to shareholders.
Selling hash power is considered as a provider of electronic service and is not taxable by VAT if a Georgian resident sells it to a nonresident. However, that transaction is subject to reverse VAT in Georgia if a Georgian resident purchases hash power from abroad. In addition, 10% of withholding tax might apply on the later transaction, which might be prevented via the application of a relevant tax treaty signed by the Georgian government.
Many people begin to establish mining farms in Tbilisi, Kutaisi, Poti free industrial zones and in high mountain regions of the country, where the cost of electricity is low.