The global crypto market is becoming more institutionalized, and even small proprietary trading firms need to think about jurisdiction, compliance, and taxation. While the U.S. (Wyoming, Delaware) and offshore hubs (BVI, Seychelles) remain popular, Georgia, the country in the Caucasus,has quietly emerged as an attractive option for crypto-friendly businesses.
Below, we’ll explore why Georgia might make sense for a small crypto trading firm, what the registration process looks like, and the pros and considerations you should keep in mind.
Why Georgia?
Crypto-friendly environment: Georgia does not have hostile legislation toward crypto. Trading, investing, and holding digital assets is not restricted for companies or individuals.
Low taxes: Georgia applies an Estonian-style corporate tax model — you only pay corporate tax (15%) when distributing profits as dividends. Reinvested earnings are tax-free. For small businesses, a turnover tax regime exists with just 1% tax on revenue if annual turnover is under GEL 500,000 (~USD 180,000).
Banking access: Unlike some offshore jurisdictions, Georgian banks (TBC, Bank of Georgia) are relatively open to fintech and international clients.
Ease of incorporation: An LLC can be registered in a few days. Remote registration is possible through a power of attorney.
Steps to Register a Trading Firm in Georgia
Incorporation
- File Articles of Association and register with the National Agency of Public Registry.
- Typical turnaround: 1–2 business days.
Tax ID & VAT Status
- Obtain a tax identification number.
- For small trading firms, VAT may not be required, but it depends on your turnover and activities.
Bank Account
- Open a corporate account at a Georgian bank (TBC, Bank of Georgia).
- Alternatively, apply to fintech solutions like Wise or Payoneer for global transfers.
Exchange Accounts (Corporate KYB)
- Exchanges like Bybit and Deribit allow corporate accounts.
- Provide incorporation docs, tax ID, and proof of ownership.
Compliance & Reporting
- Maintain accounting records.
- File annual reports; tax only applies when distributing profits.
Tax Advantages
Reinvestment Freedom: Retained earnings are tax-free until distributed. Perfect for proprietary firms reinvesting in crypto.
Small Business Regime: Under GEL 500,000 turnover, pay 1% turnover tax instead of standard rates.
Dividend Withholding Tax: When distributing profits, an additional 5% applies, making the effective tax burden about 20% — still competitive globally.
Considerations and Challenges
Enhanced banking oversight: Financial institutions in Georgia, like in many jurisdictions, apply rigorous due diligence for companies engaged in digital assets. Firms should be prepared to provide clear documentation and transparency in operations.
Evolving regulatory framework: While crypto activity is currently accommodated within existing structures, digital asset regulation worldwide continues to develop. Firms should anticipate potential adjustments and align with international compliance standards.
Operational requirements: Maintaining proper accounting, local reporting, and engaging qualified advisors is essential for full compliance and efficient tax planning.
For a small proprietary crypto trading firm, Georgia offers a combination of low taxation, ease of registration, and access to international banking that few jurisdictions can match. It is particularly compelling for firms reinvesting profits into spot crypto rather than distributing dividends frequently.
Important Note: We are not offering legal, tax, or incorporation services in Georgia. This article is for informational purposes only. However, if you are considering setting up a small trading firm and would like to have a meaningful conversation about structuring, strategy, and practical experiences, we would be open to a discussion.