Law on Entrepreneurs: A Good Foundation for Business, but Challenges Remain
Guide to Economic Reforms
Nika Nanuashvili, legal director of the Georgian Business Association, recently spoke about the challenges and findings of the implementation of the Law on Entrepreneurs in the "Business Partner" program. While acknowledging the law as a good foundation for business, Nanuashvili also noted that good does not mean ideal.The law is a kind of constitution for businesses, through which they carry out their organizational-legal formation and further functioning. Its biggest advantage is that it provides a common language for Georgian and Western businesses. However, Nanuashvili also pointed out that certain technical changes may be necessary in the process of its application in practice, both from the side of the court and from the side of the business registry.
One example of such a change is the obligation to denominate invested capital in the national currency. While this may not be an issue for some businesses, a number of companies do not conduct operations in GEL, which can create problems for taxation purposes.
The law has both mandatory and dispositional norms, and some technical intervention may be necessary, particularly for LLCs, despite the law's original intention of being dispositional.
According to Nanuashvili, the law is complex, and it is natural that certain gaps are found during its application. It is also important to consider how the court practice will develop in response to the law.
While the Law on Entrepreneurs fundamentally changed the corporate management philosophy and is a good foundation for business, challenges remain in its application. The Georgian Business Association and other organizations continue to monitor the law's implementation and advocate for necessary changes to ensure that it serves the interests of Georgian businesses.