Georgia crypto license

As of July 1, 2023, Georgia’s Law on Virtual Asset Service Providers (VASPs) governs all companies engaged in crypto activities. The legislation’s main goal is to increase transparency and prevent misuse of digital assets for financial crimes such as money laundering.

Under the law:

• Cryptocurrencies are not recognized as official money in Georgia; only the Georgian lari holds this status.
• Virtual assets are defined as digital value units that are transferable and can be used as a medium of exchange or investment, though they are not equivalent to traditional securities, cash, or NFTs.
• All crypto firms must be licensed and registered with the National Bank of Georgia.

There are two main ways to establish a crypto business:

Mainland Georgia VASP License

For companies operating within mainland Georgia, obtaining a VASP license is mandatory. This process includes:

• Registering a legal entity as an LLC or JSC.
• Submitting a detailed business plan and corporate documents.
• Registering with the National Bank of Georgia.
• Meeting anti-money laundering (AML) and know your customer (KYC) obligations.

Licensed companies are authorized to:

• Transfer, manage, and store virtual assets.
• Run trading platforms.
• Act as an exchange between digital assets and fiat currencies.
• Provide services related to token offerings and asset lending.

Free Industrial Zone (FIZ) Crypto License

Georgia also offers business-friendly Free Industrial Zones (FIZ) in Tbilisi, Kutaisi, and Poti. Setting up your crypto company here provides significant advantages:

• Faster and simpler registration and licensing (often completed within a few weeks).
• 0% corporate income tax for companies with activities outside Georgia.
• No requirement to have local employees or a physical office beyond a legal business address.
• Exemption from VAT and property tax for FIZ-registered firms.
• Broader range of allowed services, including crypto-to-crypto exchanges, custodial services, initial token offerings (ITO/ICO), and crypto mining.

Follow these basic steps to start your crypto business in Georgia:

1. Define your business model and operation (exchange, custodial, mining, etc.).
2. Choose the type of company (LLC or JSC are typical).
3. Select and register your business name.
4. Prepare corporate documents, certify them as required, and appoint directors.
5. Register your entity with the National Registry and obtain a tax identification number.
6. Apply to the National Bank of Georgia (for VASP license) or the relevant Free Zone Authority (for FIZ license).
7. Open a corporate bank account.

Required documents include:

• Company charter and founders’ agreements.
• Copies of passports and proof of address for directors, shareholders, and UBOs.
• A clear business plan outlining activities.
• Power of Attorney if operating through a representative.

Remote registration is possible—personal presence in Georgia is not necessary. Many legal firms can guide you through the process quickly, providing assistance with all steps, from company setup to document submission.

Every crypto business, regardless of location in Georgia, must establish robust compliance mechanisms:

• Develop and maintain AML programs based on risk assessment.
• Perform KYC checks: verify all clients and identify beneficial owners.
• Monitor transactions for suspicious or high-value activity; report unusual cases to the Financial Monitoring Service of Georgia.
• Apply enhanced due diligence for high-risk customers (such as politically exposed persons).

These measures are in line with global standards and foster a trustworthy market for both businesses and users.

Taxation of cryptocurrency activity

Georgia is regarded as a tax-friendly jurisdiction for crypto enterprises:

• Individuals pay no personal income tax on gains from selling or exchanging crypto.
• Crypto-to-fiat and crypto-to-crypto transactions by individuals are not subject to VAT.
• Corporate profit tax is 15%, but thanks to the Estonian system, tax is only paid when profits are distributed as dividends. If profits are reinvested into the business, no tax is due.
• Free Industrial Zone (FIZ) companies enjoy even greater benefits: 0% corporate tax, 0% VAT, and exemption from property tax, provided goods and services are not supplied within Georgia.

• Speed: One of the fastest jurisdictions for company and license setup—possible within 2–4 weeks, especially in Free Zones.
• Ease: Few bureaucratic hurdles, no minimum capital requirements, and remote setup options.
• Cost-effective: Low registration fees and ongoing operational costs.
• Tax incentives: Significant tax reductions, especially for firms serving non-Georgian clients.
• Global access: With a Georgian crypto license, businesses get legal clarity to operate internationally.
• Flexible regulation: Clear requirements but without excessive red tape.

Authorized activities with a crypto license

Licensed virtual asset companies in Georgia can legally engage in:

• Operating exchanges (crypto-crypto, crypto-fiat).
• Digital asset storage (wallet and custodial services).
• Token sales, ITO, and ICO activities.
• Asset management related to virtual assets (not collective portfolios).
• Lending and other financial services based on cryptocurrencies.
• Crypto mining and related infrastructure operations.

Why consider Georgia for your crypto business

Georgia stands out for its combination of forward-thinking legislation, government support, and simple administrative processes. With a skilled labor force, modern infrastructure, and a central position between Europe and Asia, it’s the ideal launchpad for startups aiming at global crypto markets.

If you are looking for a jurisdiction that balances flexibility with regulatory structure—and gives your project credibility—Georgia’s crypto licensing framework could be the right choice. For tailored support and a smooth setup, it is wise to work with legal professionals familiar with the local regulatory environment.