Redomiciliation of Company According to New Law “On Entrepreneurs”

N4
Lali Lazarashvili
12/2021
DOI: 10.15350/26679434/H.4.1
pp. 11-24

Abstract:

This article investigates issues such as the essence and significance of re-domiciliation, preconditions for its implementation, the process of re-domiciliation, legal consequences and relevant problemsin connection with the regulations of the new Lawof Georgia on Entrepreneurs dated as of August 2, 2021.

For this purpose, the article investigates issues such as the essence and significance of re-domiciliation, preconditions for its implementation, the process of re-domiciliation, legal consequences and relevant problems in connection with the regulations of the new Law. This article deals solely with legal issues of re-domiciliation and not with other aspects, such as, for example, tax regime or investment activities, though it should be noted, that in general, a preferential tax regime and an attractive investment environment are one of the important motivators for implementation for enterprise re-domiciliation in the country.

The study revealed that the new Law on Entrepreneurs regulates re-domiciliation basically in the same way as the Law on Entrepreneurs dated as of October 28, 1994. In particular, the definition of re-domiciliation, the disturbing circumstances, the process of re-domiciliation, the legal consequences are similar. The lack of a clear procedure for the implementation of re-domiciliation should be considered as an important obstacle to comprehensive and clear legal regulation, which, in turn is one of the obstacles to the practical implementation of re-domiciliation. In addition, the less interest of foreign companies in re-domiciliation should probably be explained by the fact that starting a new company or opening a branch in Georgia is more attractive due to the simplicity of establishment than re-domiciliation, which is much more complicated procedure. The future task is to strengthen the legal framework of re-domiciliation, in particular, to adopt a bylaw in the form of instruction approved by the decree of Minister of Justice of Georgia, regulating the clear rules and conditions for the implementation of re-domiciliation as it is established under the new Law on Entrepreneurs. It is also important to introduce appropriate safeguards for the employees of the company in case of re-domiciliation.