Consultation in non-profit law

Charity Status

Are not-for-profit (non-commercial) legal entities charity organizations?

Although the activities of not-for-profit (non-commercial) legal entities are essentially charity activities, they are not regarded as charity organizations automatically. For them to be regarded as charity organizations it is necessary to receive such status in accordance with legal procedures.

Who can be awarded the charity organization status and which state agency awards such status?

The status of a charity organization can be awarded to the organization, which: 1. Is established for carrying out charity activities; 2. Is registered in accordance with the procedure established by the legislation of Georgia; 3. Has at least 1 year experience of carrying out charity activities; 4. Meets other requirements established under Article 32 of the Tax Code of Georgia. The Head of the Revenue Service, in agreement with the Minister of Finances of Georgia and based on the submission of a tax authority, awards, revokes and takes away the status of a charity organization.

For which term is the charity organization status awarded?

The status of a charity organization is awarded for an indefinite period of time and the status becomes valid immediately upon awarding.

What kind of activities are considered as charity activities?

The Tax Code of Georgia directly stipulates the list of activities that are considered as welfare activities, namely the following shall be regarded as welfare activities:

1. Provision of assistance directly or through a third party, voluntarily and gratuitously to the persons that are in need of such assistance, including to: 

Individuals in need of social protection, medical assistance, as well as impoverished individuals, including: persons with disabilities, elderly, orphan children, survivors, persons with a refugee or humanitarian status and the internally displaced persons – ill, families with many children and members thereof, those affected by wars, armed conflicts, accidents, natural disasters, catastrophes, epidemics and/or epizootics;

2. Organizations that carry out the activities for public good in the following fields: 

  • Human Rights protection;
  • Environmental protection;
  • Democracy and civil society development;
  • Culture;
  • Education;
  • Science;
  • Physical education and amateur sports;
  • Arts;
  • Healthcare;
  • Social welfare.

When can the charity organization status be revoked?

The status of a charity organization is revoked: at the initiative of this organization; in case of deprivation of the status of a charity organization.

Is it possible to restore the charity organization status?

Organization, which has been deprived of the status of a charity organization, has the right to submit the application on restoration of the status no earlier than 1 year from eliminating the cause of deprivation of the status.

Registration of Nonprofits

What is a difference between the union and foundation?

Pursuant to the amendments made to the Civil Code of Georgia, not-for-profit legal entities are not divided into unions and foundations. The law recognizes only a coherent notion of a not-for-profit (non-commercial) legal entity. In addition, it is notable that a not-for-profit legal entity can be or not be a member-based entity.

Which agency registers a not-for-profit (non-commercial) legal entity?

The National Agency of Public Registry registers a not-for-profit (non-commercial) legal entity. The registration encompasses both the state and tax registrations. At the time of registration the entity is granted an identification number, which is permanent and used in legal relations including for tax purposes.

Is it necesssary for a not-for-profit (non-commercial) legal entity to have a charter?

Pursuant to Article 35 of the Civil Code of Georgia, the organizational structure of a not-for-profit (non-commercial) legal entity must be regulated by its charter (agreement between partners/members), which requires due certification. In addition, if the partners do not establish otherwise, a charter may represent that founding document - agreement between the partners/members, which is submitted to the National Agency of Public Registry for registration of a legal entity.

How many persons are needed to establish a not-for-profit (non-commercial) legal entity?

A not-for-profit (non-commercial) legal entity may be established by one person, who can be either a physical or a legal person.

What is the term in which a registering agency is obligated to register a not-for-profit (non-commercial) legal entity?

The service terms and fees for registration of a not-for-profit (non-commercial) legal entity are established by the Law of Georgia on the Public Registry. Registration of a not-for-profit (non-commercial) legal entity, and registration of amendments to the registered data and their termination is carried out by the National Agency of Public Registry usually within 1 business day. However, interested persons may receive expedited services. In this case it is possible that registration of a not-for-profit (non-commercial) legal entity, and registration of amendments or termination is carried out on the day of submission of application. Additional fee is payable for using the expedited services.

What documents are required for registration of a not-for-profit (non-commercial) legal entity?

When requesting the registration of a not-for-profit (non-commercial) legal entity, an interested person must submit to a registering authority the agreement between partners/members and the application, which must contain mandatory data established by the Law of Georgia "on Entrepreneurs" for the registration of a commercial legal entity.
Application for registration must be also accompanied with:
• document confirming the payment of service fee; 
• letter of reference on the location (legal address) of a not-for-profit (non-commercial) legal entity - notarially certified consent of the owner of location or a respective executed agreement on the use of the location. Other rules of registration of a not-for-profit (non-commercial) legal entity are defined by the Laws of Georgia on Entrepreneurs, on Professional Unions, and on Creative Workers and Creative Unions.

What data should the agreement of founders/members of a not-for-profit (non-commercial) legal entity contain?

The agreement (possibly charter) of founders/members of a not-for-profit (non-commercial) legal entity must include the following data:name of a not-for-profit (non-commercial) legal entity; data on the residence (legal address) of a not-for-profit (non-commercial) legal entity; purpose of activity of a not-for-profit (non-commercial) legal entity; data on the founder/s of a not-for-profit (non-commercial) legal entity (in case of a physical person - name, surname, date of birth (day, month, year), place of residence and personal number, and in case of a legal entity - full name, legal form, registration data, person/s with representative authority); data on each founder are entered separately; data on the managing body (bodies) of a not-for-profit (non-commercial) legal entity; procedure for setting up (election) of the managing body (head person) of a not-for-profit (non-commercial) legal entity; data on the head person of a not-for-profit (non-commercial) legal entity (name, surname, date of birth (day, month, year), place of residence, personal number) - this can be defined under a separate act as well; rules and procedure for making decisions by the managing body (head person) of a not-for-profit (non-commercial) legal entity; person/s having representative authority of a not-for-profit (non-commercial) legal entity, procedure of his/her (their) election and the term of position; data on the person/s having representative authority (name, surname, date of birth (day, month, year), place of birth, place of residence, personal number) - this may be defined under a separate act as well; procedure for becoming a member, leaving the membership, and exclusion from membership of a not-for-profit (non-commercial) legal entity, provided that it is a membership-based not-for-profit (non-commercial) legal entity; rules and procedure for making decisions on reorganization and liquidation. Name of the authority (person) making a decision on reorganization or liquidation, decision-making rules and procedures;

When is it necessary to register the amendments to a not-for-profit (non-commercial) legal entity?

Changes carried out by a not-for-profit (non-commercial) legal entity, which result in the amendments to the entity's registration documents, require respective registration. Amendments to the registered data must be based on duly adopted and certified decision of an authorized person/body, or the transaction executed by authorized persons in accordance with the legislation of Georgia.

Is it required to register a branch of a not-for-profit (non-commercial) legal entity registered in Georgia?

Since 1 January 2010, the branch of a not-for-profit (non-commercial) legal entity registered in Georgia does not require registration.

What is a fee payable during the registration of a not-for-profit (non-commercial) legal entity or registration of amendments?

Pursuant to the Law of Georgia on the Public Registry, the fee for registration of a not-for-profit (non-commercial) legal entity, and amendments to the registered data and their termination equals 100 GEL, if this procedure is carried out within 1 business day. If this procedure is carried out on the day of submission of application (expedited service), the Public Registry's service fee equals 200 GEL.

Reorganization and Liquidation of Nonprofits

Can the founders make a decision on the liquidation of a not-for-profit (non-commercial) legal entity?

The founding documents of a not-for-profit legal entity must define the body or person, which is authorized to make a decision on the liquidation of a not-for-profit legal entity. Accordingly, if under the founding documentation this authority is granted to the founders, then they can make such a decision.

Is it possible to reorganize a not-for-profit legal entity into an entrepreneurial legal entity?

Changing a legal form of a not-for-profit (non-commercial) legal entity is prohibited, unless by changing a legal form it is transformed into a legal entity of public law (LEPL).

Who can serve as liquidators of a not-for-profit (non-commercial) legal entity when liquidation is carried out based on the decision of a legal entity itself?

If the liquidation of a not-for-profit legal entity is carried out by the decision of a legal entity itself, persons defined by the founding documentation or person/s defined by the body/person stipulated in the founding documentation will be appointed as liquidators of a not-for-profit legal entity.

Is it possible to alienate the property of a not-for-profit (non-commercial) legal entity during its liquidation?

It is possible to alienate the property of a not-for-profit (non-commercial) legal entity, if: alienation facilitates the achievement of its objectives; alienation serves charity purposes; property is transferred to another not-for-profit (non-commercial) legal entity.

Who is awarded with the property remaining after the liquidation of a not-for-profit (non-commercial) legal entity?

At the time of registration the founders/members of a not-for-profit (non-commercial) legal entity define a person authorized to receive the property remaining as a result of liquidation of a not-for-profit (non-commercial) legal entity. If the founders/members of a not-for-profit (non-commercial) legal entity have not defined not-for-profit (non-commercial) legal entity authorized to receive the property remaining as a result of its liquidation, then the court will transfer the property remaining as a result of liquidation of a not-for-profit (non-commercial) legal entity to one or several not-for-profit (non-commercial) legal entities, who have the same or similar objectives as the liquidated not-for-profit (non-commercial) legal entity. If there are no such legal entities or identification of such legal entity/entities is impossible, a decision may be made on the transfer of this property to the state. The court can distribute this property after 6 months from the registration of the start of liquidation process.

Is it possible to distribute the property remaining after the liquidation of a not-for-profit (non-commercial) legal entity among its founders/members?

Distributing the property remaining as a result of liquidation of a not-for-profit (non-commercial) legal entity among its founders/members and persons having managerial and representative authority is prohibited.

Taxes

Is the existence in the form of a not-for-profit (non-commercial) legal entity automatically related to the exemption from payment of certain taxes?

Existence in the form of a not-for-profit legal entity does not automatically imply the exemption from any taxes. Exemption of not-for-profit (non-commercial) legal entities from certain taxes is related to its activities and sources of income. If not-for-profit legal entities carry out economic activities, they are regulated under common taxation conditions and the incomes generated thereof are subject to regular taxation. If the incomes of not-for-profit legal entities are not incomes generated from economic activities (e.g. grant, donation, membership fee), then such incomes are subject to exemption from certain taxes. For instance, the grant received by a not-for-profit legal entity (as well as other entities within the definition of ''organization'' as defined by the Tax Code), as well as the donation and membership fees received by the organization are exempt from the profit tax.

Is a not-for-profit (non-commercial) legal entity exempt from paying the property tax?

Not-for-profit legal entities (as well as other entities within the definition of ''organization'' as defined by the Tax Code) are exempt from paying the property tax, apart from the land and property used for economic activities. In other words, not-for-profit legal entities pay the property tax only: on the land in its ownership, as well as on the state land under lawful use or factual possession; on the property (fixed assets on its balance, uninstalled equipment, incomplete construction and non-material assets, property leased out by it) used for the economic activities.

Exemption from which taxes is related to a grant?

Pursuant to the Tax Code of Georgia, certain tax benefits apply to a grant. In particular: profit tax - according to Article 99 of the Tax Code, the grants, membership fees and donations received by an organization (including a not-for-profit legal entity) are exempt from a profit tax. VAT - pursuant to Article 168.3 of the Tax Code of Georgia, the import of goods under the grant agreement by the person issuing or receiving the grant is exempt from VAT without the right to offset. In addition, a person receiving the grant, which pursuant to the legislation of Georgia purchases the goods under the grant agreement and/or receives the services under the same agreement, has the right to set off or return the VAT paid for these goods/services in accordance with the procedure established by Article 63 of the Tax Code. Income tax - according to Article 82 of the Tax Code, the grant received by a physical person is exempt from an income tax. Import tax - under Article 199 of the Tax Code, import of goods, which are foreseen under the grant agreement in accordance with the procedure defined by the decree of President of Georgia, is exempt from the import tax. Pursuant to the same Article, import of goods, which are funded through the grants or beneficial credit issued by the state authority of a foreign country and/or international organization, and which contains at least 25 percent of grant element, is exempt from the import tax.

Is it possible to set off or return the VAT on goods (service) purchased by a grant?

A person receiving the grant, who pursuant to the Law of Georgia on Grants purchases the goods foreseen under the grant agreement and/or receives services based on the same agreement, has the right to set off or return the VAT paid for these goods or services in accordance with the procedure established by Article 63 of the Tax Code, by submitting to the tax authority the tax invoice or document confirming the payment of VAT in the budget during the counter set-off. VAT is set off or returned only when the application is submitted with the tax authority within 3 months following the taxable operation.

What is the procedure for awarding the grant status to the import goods?

In order to exempt import of goods from taxes, it is necessary to award it the grant status. To this end, the recipient of the grant is obligated to submit to the Revenue Service in hard copies or electronically the following documentation: application of the recipient of the grant; copy of the agreement executed between the issuer and recipient of the grant or the written decision of issuer of the grant on allocation of grant, which must meet the requirements of the Law of Georgia on Grants; a copy of the charter of organization receiving the grant; a copy of the import goods invoice (or pro-forma invoice); a copy of the Georgian citizen's ID or passport, if the recipient of the grant is the citizen of Georgia. Each document drawn up in a foreign language, which is submitted by the recipient of the grant to the Revenue Service, must be accompanied with the notarially certified translation.

What is the term in which the grant status is awarded to the import goods?

Within 10 business days from the receipt of complete documentation defined by the legislation, the Revenue Service awards the import goods the grant status or makes a justified decision on refusal to award the grant status.

Which tax benefits does an enterprise enjoy when donating to a charity organization?

The Tax Code includes one of the important mechanisms stimulating the charity development. Namely, pursuant to Article 117 of the Tax Code, any enterprise or entrepreneur physical person, which issues donations to charity organizations, shall have the donated amounts deducted from the total income, however, the deducted amount must not exceed 10 percent of the amount remaining after the deductions from the total income as defined under the Tax Code. In other words, the above-described mechanism applies to enterprises only if they give the donation amount to organizations having the charity status.

Grants

What is a grant?

A grant is the targeted fund transferred gratuitously by the issuer (donor) of the grant to the recipient of the grant in a monetary form or in kind, which is used for the implementation of specific human, educational, scientific-research, healthcare, cultural, sports, ecological, agricultural development and social projects, as well as programs of state or public importance.
Funds issued for entrepreneurial purposes, except for funds issued to a legal entity that enjoys the status of an agricultural cooperative pursuant to the Law of Georgia "on the Agricultural Cooperative", and for political purposes are not considered as a grant.


Who can be the issuer of a grant, i.e. a donor?

The following can be the issuer of the grant, i.e. the donor: international charity organization; international humanitarian and other public organization (including international sports association, federation and committee); international financial-credit institution; foreign government or its representative office; foreign entrepreneurial legal entity, if the recipient of the grant is the Georgian state or government; foreign not-for-profit (non-commercial) legal entity; not-for-profit (non-commercial) legal entity of Georgia, whose key objective under the charter is to accumulate property for promoting the charity, social, cultural, educational, scientific-research or publicly useful other activities; legal entity of public law defined by the Government of Georgia, whose charter/regulations aims to issue scientific grants.

Who can be the recipient of a grant?

The following can be the recipient of the grant: the Georgian state, in the face of organization authorized by the President; the Government of Georgia, in the face of body authorized by the Government of Georgia; the state or local self-government authority of Georgia; not-for-profit legal entity of Georgia, its branch, representative office, department; legal entity of public law; citizen of Georgia; person having the neutral ID or the neutral travel document; accredited higher education institution. International organization, entrepreneurial or not-for-profit (non-commercial) legal entity of another state; A legal entity enjoying the status of an agricultural cooperative as defined by the Law of Georgia "on the Agricultural Cooperative"; The administration of the Personal Data Protection Inspector.

What is the grant issuing procedure between the donor and grant recipient?

The written agreement is executed between the donor and the grantee, which must indicate the purpose of awarding the grant, its volume, specific area of use of received funds, terms of use of these funds and the key requirements put forth by the donor before the grantee.

Is it possible to use a grant for purposes other than originally issued?

One of the characteristics of the grant is its targeted use, i.e. it is issued to achieve definite public good (e.g. education, healthcare, etc.). At that, it is notable that with the donor's consent it is possible to change the target of the grant and use it for other than the original purposes.

Is it possible to sell the property received as a grant?

Selling the property received as grant is allowed only if such action was foreseen beforehand in the grant agreement.

Public Procurement

What does public procurement mean?

Public procurement is, in cases established under the Law of Georgia on Public Procurements, the procurement through electronic or other means by the procuring organization of any goods, services, and construction works, which is carried out through the following funds:

  • The state budget of Georgia and the funds consolidated in the state budget;
  • Budgetary funds of the Abkhazian and Adjarian Autonomous Republics;
  • Budgetary funds a local self-government unit; funds of organizations and institutions funded from the state budget of Georgia,
  • Budgets of the Abkhazian and Adjarian Autonomous Republics and the budget of a local self-government unit;
  • Funds of not-for-profit (non-commercial) legal entities - higher education institutions and the higher education institution development funds (despite the source of origin of these funds);
  • Funds (despite the source of origin of these funds) of a legal entity of public law (apart from the membership-based legal entity of public law);
  • Funds of enterprise, over 50% of whose stock or shares are owned by the state or local self-government body (apart from the exceptions established by the Law of Georgia on Public Procurements).

Can a not-for-profit legal entity participate in the public procurements?

Any physical person or legal entity of Georgia or a foreign state, including a not-for-profit legal entity, can participate in the public procurement process.

What does simplified procurement mean?

Simplified procurement is the means of procurement, which is used:

  • In case of procurement of uniform objects with the value of up to 5,000 GEL;
  • In case of procurement of objects with the value of up to 50,000 GEL by the diplomatic missions of Georgia abroad (up to 20,000 GEL since January 1, 2012);
  • In case of procurement by the procuring organizations within the system of the Ministry of Internal Affairs of Georgia of uniform objects with the value of up to 50,000 GEL (up to 20,000 GEL since January 1, 2012);
  • In case of procurement by the procuring organizations within the system of the Ministry of Defence of Georgia of uniform objects with the value of up to 50,000 GEL (up to 20,000 GEL since January 1, 2012);
  • In case of procurement of uniform objects by the Special Service of State Protection in relation to the defence, security and observance of public order - with the value of up to 20,000 GEL since January 1, 2012;
  • In addition, Article 101.3 of the Law of Georgia on Public Procurements lists cases when the tool of simplified procurement is applied.

When is the procurement carried out through a simplified online tender?

Simplified online tender is used when the state procures uniform objects with the value of up to 200,000 GEL.

When is the procurement carried out through an online tender?

Online tender is used when the state procures uniform objects with the value of or over 200,000 GEL.

Is there a fee for participating in the tender and how much is it?

In case of procedures of a competition, online tender or simplified online tender there is a fee in the amount of 50 GEL for the submission of the competition or tender proposals, while in case of procedures of the consolidated tender - 5,000 GEL for the submission of the tender proposal.

Usage of the Property of State and Self-government

Using and disposing of the property in the ownership of the state and local self-government

The effective legislation of Georgia differentiates the state property and local self-government unit property. The state property is every object (immovable and movable) in the state ownership, as well as non-material property good (shares in the enterprise, claims, etc.). The self-government unit property is every object and non-material property good in the ownership of a self-government unit pursuant to the legislation of Georgia, including the property transferred to a self-government unit by the state, or which is created or purchased by a self-government unit in accordance with the procedure established by the legislation of Georgia.

What are the categories of a self-government unit property?

The self-government unit property is divided in two categories - major (non-alienable) and supplementary property: major (non-alienable) property is the property of a self-government unit, which serves as basis for exercising the self-government, and which can be used by a local self-government authority only for discharging its public functions and powers; supplementary property is the property of a self-government unit, which is not a part of the major (non-alienable) property and which can be used by a local self-government authority in accordance with the procedure established by legislation of Georgia. Remarkably, alienation of a self-government unit's major (non-alienable) property is prohibited, apart from the cases provided for in the law.

What does the privatization of property mean?

Privatization is the acquisition of title by persons (physical or legal persons) or their unions to the state property or local self-government unit property, in accordance with the procedure established by the legislation of Georgia.

What are forms of privatization of the state and/or self-government unit property?

Privatization of the state and self-government unit property may be carried out through the forms of online and/or public auction, direct sale, direct sale based on competitive selection, and free of charge transfer. Auction - during the use of auction when privatizing the property, ownership title to the property will be awarded to that buyer, which will offer the seller the highest price in the trading process, while if the auction is announced with certain conditions (e.g. with maintenance of an institution's profile), then the ownership title is granted to that buyer, which will undertake the obligation to meet the announced requirements and will offer the seller the highest price in the trading process. Direct sale - privatization of the state and/or local self-government unit property through a direct sale aims to transfer the title to property to that buyer, which will fully and in good faith fulfill the condition/s set for the privatization of the state and/or local self-government unit property through a direct sale. Direct sale may be carried out based on competitive selection, if there are numerous potential investments and alternative terms proposed by interested persons. During the direct sale based on competitive selection, title to the property will be granted to that interested person (potential investor), which will fully and in good faith fulfill the condition/s set for the privatization of the state and/or local self-government unit property through a direct sale based on competitive selection. The President of Georgia makes the decisions and sets respective conditions for the privatization of the state and local self-government unit property through direct sale and the direct sale based on competitive selection.

Who can be the purchaser of the state property?

Purchaser of the state property (apart from the privatization of agricultural land plot in the state ownership) can be a citizen of Georgia or a foreign state or a legal entity of private law or union of persons, in whose property the share-holding of the Georgian state or local authority is less than 25%, as well as a not-for-profit (non-commercial) legal entity established by the state, other entity or jointly by the state and other entity, the National Bank of Georgia, while in case of direct sale based on the decision of the Government of Georgia - the Georgian Autocephalous Orthodox Church as well.

Who can be the buyer of the agricultural land plot in the state ownership?

A citizen of Georgia or a legal entity of private law incorporated in Georgia can privatize the agricultural land plot in the state ownership by paying the relevant price, while the Georgian Autocephalous Orthodox Church and the homeless citizens of Georgia, who lived or live in the occupied territories - free of charge.

Who can be the buyer of the self-government unit property?

The self-government unit property may be purchased by the physical persons or legal entities of private law or union of persons of Georgia or other states, in whose property the share participation of the Georgian state or local authority is less than 25%.

Are there any benefits enjoyed under the legislation regulating the privatization issues for not-for-profit entities?

Legislation regulating the privatization issues of the state and/or local property does not foresee any benefits in the privatization process for not-for-profit (non-commercial) legal entities. The latter participate in the privatization process on equal terms and conditions with the other interested persons (buyers).

Where is the information on the privatization property published?

Information on the privatization of the state property through public auction is published on the web site of entity disposing of the state property, which is considered as official publication of information. To ensure the publicity and accessibility of information, information on the privatization of the state property through public auction must be also published in the newspaper ''24 Hours''. During the privatization of forests of former collective and Soviet farmings within the territorial boundaries of settlements, information on the public auction is published in the press and posted in the Sakrebulo building of respective municipality. To carry out the direct sale based on competitive selection, the Ministry of Economy and Sustainable Development of Georgia, and in special circumstances - the Government of Georgia, will publish the decision on privatization conditions of non-leased agricultural land in the state ownership in all-state and/or international information means. Information on the property of a local authority to be privatized through a public auction is published on the web site of entity disposing of the property and local and/or other print information outlet. In case of privatization of the property through online auction, information is published on the web site of auctioneer.

 

Registration of Real Estate

What does the notion ''real property'' mean?

Pursuant to the Civil Code of Georgia, immovable things include a tract of land with its subsoil minerals, the plants growing on the land, and buildings and other structures firmly attached to the land.

What are the legislative regulations for purchasing the real property?

To purchase an immovable thing it is necessary to execute a written transaction and to register the ownership right defined under this transaction on the buyer in the Public Registry.

Does the real property purchase and sale agreement require notarial certification?

In accordance with the amendments made to the Civil Code of Georgia, the terms of purchasing immovable things have been simplified. Execution of notarial agreement is no longer required, however, the law does not prohibit using the notarial form as well. The seller and buyer submit to the National Agency of Public Registry the written sale and purchase agreement and sign it in front of the registrar.

Who can obtain the real property extracts from the Registry of rights?

Pursuant to the Law of Georgia on the Public Registry, any person can obtain the extract from the Public Registry.

Which rights are registered in the Registry with respect to immovable things?

The following rights are registered in the rights registry on immovable things: ownership; right to build; mortgage with the right to build; usufruct; easement; mortgage; rent; sub-rent; lease; sub-lease; lending; leasing; rights related to the use and possession foreseen under the public law; obligations related to title to immovable things.

Is it necessary to carry out new registration of real property in the Public Registry, which is already registered in the technical bureau?

There is no such legislative requirement, but in case of alienation or otherwise incumbering of such real property it is necessary to obtain the extract from the National Agency of Public Registry, which automatically results in the registration of this right, as the National Agency of Public Registry will not have information on the ownership to such real property.

 

Labor Relations

Who can be the employer under the Labor Code?

Employer is a natural person or legal entity, or the union of persons, for who a certain work is carried out based on a labor contract.

What is a minimum age from which a natural person can be employed?

In accordance with a general rule, a natural person may be employed from the age of 16 years. The minor under the age of 16 years may be employed with the consent of his/her legal representative or guardian/custodian authority, if the labor relations do not contradict the interests of the minor, do not cause harm to his/her moral, physical and mental development, and do not restrict his/her right and possibility to receive mandatory elementary and basic education. Labor contract with the minor under the age of 14 years may be concluded with the consent of his/her legal representative or guardian/custodian authority only in respect of activities in sports, arts-related and cultural areas, as well as for carrying out the advertising works. The consent of a legal representative or guardian/custodian authority remains in force in respect of future labor relations of a similar nature.

One of the private enterprises announced competition for a job opening. One of the candidates was denied the job without any grounds and justification. Is such action lawful?

Pursuant to Article 5.8 of the Labor Code of Georgia, an employer shall not be obliged to justify his/her refusal to employ.

What is the duration of working time under the Labor Code of Georgia?

Under Article 14 of the Labor Code of Georgia, unless a labor contract provides otherwise, duration of working hours shall not exceed 40 hours a week, while in an enterprise with specific work regime, where the production/labor process implies a continued regime over 8 hours – 48 hours a week. The Government of Georgia defines the list of areas with specific work regime. Working hours do not include the break and rest time.

How many days are granted for a maternity leave under the Labor Code of Georgia and what are the terms of compensation?

''Upon the request of an employee, a maternity leave of up to 730 calendar days shall be given. Out of these, 183 calendar days shall be remunerated, while in case of complicated child delivery or giving birth to twins- 200 calendar days. Maternity leaves are remunerated from the state budget, in accordance with the procedure established by law. An employer and employee may agree on extra remuneration.''

Can a grandmother take additional leave instead of a mother due to child care and what is the duration of such leave?

''Extra leave due to child care may be given to any person, who actually takes care of a child. Upon the request, an employee is given an extra leave due to child care continuously or portion by portion, but not less than two weeks a year – for the period of 12 weeks, before the child attains the age of five years.

During the termination of labor relations, within how many days should the accounts be finally settled?

Upon termination of labor relations, an employer shall be obliged to finally settle the accounts with an employee not later than 7 calendar days, unless a labor contract or the law provides otherwise.

The person works in one of the enterprises. Can s/he hold another position in a non-governmental organization and will s/he be considered as an employee of this organization, i.e. can s/he enjoy the right to vacation in this organization?

Pursuant to Article 8 of the Labor Code of Georgia, it is possible to have a combined job. During working on a combined job, a person is considered an employee of this organization and s/he must enjoy all rights provided under the Labor Code, including the right to leave.

Is the overtime work payable in all instances? Are there any conditions when it may not be compensated for?

''According to Article 17 of the Labor Code of Georgia, overtime work for avoiding natural disaster and/or clearing up its results shall not be remunerated, while the overtime work for avoiding production accident and/or clearing up its results – will be remunerated. Notably, the conditions of overtime work shall be defined according to the agreement between the parties. Accordingly, the parties may agree on any conditions of remuneration for overtime work.

Contracts

Can a labor contract be concluded verbally?

Pursuant to Article 6 of the Labor Code of Georgia, a labor contract may be concluded in written form or verbally.

Is it necessary to notarially certify the non-residential space rental agreement between a non-governmental organization and a natural person?

In accordance with the Civil Code of Georgia, notarial certification is not mandatory for concluding and the validity of non-residential space rental agreement.

In case of a rental agreement, who has to bear the current repair costs - a tenant or the landlord?

Pursuant to Article 548 of the Civil Code of Georgia, as a rule, the tenant is bound to do current repairs and the tenant is bound to perform these works at its own expense.

The landlord refuses to execute the sub-rental contract by referring to the fact that the space has been overcrowded. Is the landlord's refusal lawful?

Under Article 549 of the Civil Code of Georgia, the tenant has no right to convey the rented thing to a third person (sublease) without the consent of the lessor, while the landlord may reject the sub-lease. Yet, the landlord may not reject a sublease of a dwelling if the tenant, having a legitimate reason, is willing to sublet some or all of the rented lodgings to a third person. This rule shall not apply if the sublessee is an undesirable person for the landlord, or if the lodgings have been overcrowded, or if a sublease is unacceptable to the landlord for other reasons.

A tenant of a non-residential space does not pay a rent fee for consecutive 5 months. Rental contract has been concluded for one year. Can the landlord demand from a tenant to vacate the space and terminate the contract early?

According to Article 558 of the Civil Code of Georgia, a lessor may dissolve the contract before the expiration of its term, if the lessee has not paid the rent for three months.

What is a difference between the rental and lease agreements?

Norms regulating the rental relations apply to the lease agreement as well, unless there are other different legal rules in respect of the lease agreement. The difference lies in the fact that during the lease agreement the lessee, as a result of righteous economic use of the leased property, can receive certain benefit, which is impossible for the tenant during the rental agreement.

What is the period in which the rental contract can be dissolved?

Pursuant to Article 561 of the Civil Code of Georgia, the period of time for dissolution of a rental contract is three months unless otherwise following from the circumstances or from agreement of the parties.

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