Obtaining a payment services licence in Georgia

Tax incentives for aspiring Georgian enterprises

• Georgian tax legislation affords petite merchants a corporate tax tariff of solely 1% on turnover up to 500,000 Gel.
• The property tax levied on residential lets is fixed at 5%.
• Trading in cryptocurrency entails no capital gains tax burden, and cryptographic coinage trades are exempted from VAT.

The tax model in Georgia for corporate bodies, payment facilitators included, represents an unparalleled tax regime. Per this framework, undertakings remit corporate tax solely upon disbursing profits, e.g. when settling dividends. Consequently, businesses are taxed exclusively on net earnings distributed to shareholders, thereby promoting capital reinvestment and commercial expansion.

Regulation of payment services in Georgia

The Georgian payment ecosystem may only be administered by corporate bodies registered with the National Bank as scheme operators. The certification and deregistration of payment system operators in Georgia complies with NBG standards. To guarantee payment services availability, security and performance, the Bank imposes certain operator requirements. NBG also reserves the right to request notifications from operators regarding material scheme changes, as well as demand the submission of financial, statistical and other data. Parties seeking a qualifying holding in the operator must contact NBG, who adjudicates within one month.

The following operators are exempted from registration requirements:

• NBG and its schemes;
• BG-licensed central depositories;
• Licensed credit institutions;
• PSPs, servicing solely their client base.

Providers, including banks, must coordinate scheme implementation with NBG and furnish a scheme description and supplementary information upon request. NBG determines admissibility within two months of receiving the submission.

Parties seeking to operate as payment system operators in Georgia, including PSPs, must institute transparent access and participation rules for other providers. These rules must be objective, proportionate, and non-discriminatory, not deliberately restricting access beyond system stability and security necessities.

• Impose restrictions on providers participating in other schemes;
• Stipulate discriminatory participant requirements;
• Introduce restrictions based on institutional status.

• Whose participants belong to the same group, provided open access does not serve the public interest;
• Operated by a PSP acting as both payer and payee.

If a Georgian participant affords another provider use of its system, it must ensure identical terms for other providers. Refusals warrant informing the applicant, copying NBG within 7 days.

If the purchaser of a bank's assets under resolution does not meet participation criteria, NBG may exceptionally admit it for up to 24 months.

• Payment-related services (e.g. collection, currency exchange, confirmation, data storage/processing);
• Payment system operation in Georgia;
• Lending, provided it is ancillary, credited for payments and repaid within 12 months;
• Advertising, including social messaging;
• Payment software development/maintenance;
• Payment/financial services system implementation/support, in consultation with NBG;
• Property rental;
• Activities necessary for payment-linked device operation.

For further information, we recommend contacting official sources or our legal advisors.

Requirements for payment institutions in Georgia

The optimal business structure depends on dimensions, ownership, investment and operational requirements. Notably, each legal form has distinct registration, administration and reporting stipulations.

• LLC is the prevailing legal entity choice suits SMEs in Georgia.
• PLC apposite for large-scale operations and allows raising funds via share issues.

To be certified as a PSP in Georgia, firms must maintain a domestic operation's office. Competent resident managers with local expertise to steer day-to-day activities are equally imperative.

Payment processors must implement secure, resilient software solutions for transaction processing, risk management and customer data protection/privacy.

Software must adhere to domestic and global security standards, including PCI DSS for card data and ISO information security.

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Obtaining a payment services licence in Georgia: Process stages

Required documentation for a Georgian PSP licence

1. Payment services outline: a schematic description of all services, covering funds transfers and information flows from transaction initiation through completion. Separate diagrams for each service type must be submitted. Where foreign intermediaries partake, their details and supervisors must be listed.
2. E-system extract: an extract from the registration authority of the e-payment system manufacturer, showing its name and website.
3. Registration particulars: an up-to-date excerpt from the commercial and non-profit legal entities register, reflecting all amendments at application. For PLC, a securities register extract is also needed.
4. Beneficial ownership data: documents verifying beneficial owners' identities and significant shareholdings.
5. Representative information: details of the applicant's authorised agents, including identity evidence.
6. No Criminal Record Certificates: certificates for authorised representatives, significant interest holders and beneficial owners. Validity periods — local:15 days; foreign: 60 days.
7. Property rights: a document showing head office premises ownership/lease in the address specified in the application.
8. Regulatory approvals: if the entity undergoes non-NBG regulation/supervision, the regulator's payment services certificate is required.
9. Business plans: documents supporting Georgian payment services intentions, e.g. a strategy or business plan.

Purchasing of a ready-made company with an open payment operator licence in Georgia

Acquiring a licensed PSP company in Georgia furnishes an alternative to securing a licence independently. Benefits potentially include:

• Bypassing the arduous application and approval process translates to considerable time savings.
• The operational infrastructure and client base are likely established.
• An existing entity may boast hard-won customer and partner relationships the buyer inherits.

However, caution apply:

• Vetting the target's legal integrity is imperative to preclude litigation risks.
• Ensuring prevailing regulatory and standards conformity.

Acquiring a Georgian company with the PSP licence warrants, carefully weighing all financial, legal and operational implications. Our experts are well-placed to objectively evaluate attendant risks and advantages.

Closure of the payment operator licence in Georgia

Liquidating a PSP in Georgia necessitates stringent adherence to pertinent legislation.

1. The PSP must formally communicate its closure intentions to the licensing authority, specifying the rationale and requisite particulars.
2. Prior to dissolution, the institution must duly discharge all customer and partner obligations, including potential refunds and transaction completion.
3. The regulator may evaluate the request before approving the termination, and can suspend or revoke the licence given violations or unfulfilled duties.
4. All outstanding payment activities and stakeholder deliverables require resolution beforehand.

Company closure protocol

As corporate dissolution involves multifaceted legal and regulatory factors, our experts can offer specialist counsel on closing a company in Georgia.

Conclusion

Obtaining a payment services licence is a must for financial institutions seeking to furnish payment solutions in Georgia. The country has proactively fortified the integrity and security of its monetary framework, and PSP certification in Georgia plays a pivotal role herein.

To qualify for a Georgian licence, firms must intimately acquaint themselves with and observe the National Bank's statutory procedures and norms. Applicants must satisfy financial thresholds, safeguard customer data, and stringently adhere to all regulatory dictates.

Moreover, succeeding in the often intricate and time-intensive application and compliance processes may benefit from specialist legal counsel. Our company has extensive expertise in securely navigating this critical stage of launching Georgia-compliant payment operations. We ready to answer any licencing-related questions. To contact us, fill out the feedback form.