---
title: "Factoring Company — Registration, Regulation and Sanctions"
url: "https://legal.ge/en/service/banking-and-finance-law-en/factoring-company-registration-en"
field: "Banking & Finance Law"
description: "Factoring company in Georgia: capital of 300,000 lari, registration with the National Bank, suitability, reporting and sanctions. Legal.ge."
updated: "2026-10-14"
publisher: "legal.ge"
---

# Factoring Company — Registration, Regulation and Sanctions

> Source: legal.ge, https://legal.ge/en/service/banking-and-finance-law-en/factoring-company-registration-en

## The Status and Legal Form of a Factoring Company

A factoring company may exist only in the legal form of a limited liability company or a joint-stock company. It is obliged to create a supervisory board, to which the rules established by the law on entrepreneurs for the supervisory board of a joint-stock company must be applied. The supervisory board thus operates under the same standard as in joint-stock companies, which provides additional rigour in corporate governance.

Participatory share in a factoring company is prohibited for a commercial bank, a microbank, a microfinance organisation and their related persons. This prohibition serves the separation of the interests of participants in the factoring market.

A terminological monopoly is also protected: no one has the right to use the term "factor" or "factoring company" or any other wording containing that term without being registered as a factoring company. An exception applies where the use of the term or wording is established or recognised by law or an international treaty of Georgia, or where it is clear from the context in which the term is used that the respective entity does not carry out the activity provided for by the law on factoring.

The full text is available on legal.ge after signing in: https://legal.ge/en/service/banking-and-finance-law-en/factoring-company-registration-en

### How much capital does a factoring company need?

For registration, paid-up capital must be at least 300,000 lari; this minimum may not be reduced during the entire period of activity. Own capital is subject to the same requirement of at least 300,000 lari.

### When does registration become mandatory?

A person must register as a factoring company with the National Bank if, under a contract on the transfer of claims, in any period of time it holds the right of claim simultaneously on at least 5 accounts receivable. Before registration, carrying out factoring is prohibited; the list of registered companies is published on the National Bank's website.

### Who is prohibited from being an administrator of a factoring company?

A person who participated in an operation that caused significant damage to a financial institution or caused its insolvency or bankruptcy; a person under whose administration a financial institution became insolvent; a person who failed to perform a financial obligation towards a financial institution; a person convicted of a serious or especially serious crime, terrorism financing, legalisation of illegal income or another economic crime; and a person lacking appropriate education and/or experience.

### What sanctions can the National Bank apply?

Each measure is set out separately, from mild to severe: a written warning; special measures or an instruction/direction to eliminate the violation; a monetary fine under the procedure and amount determined by the Bank; suspension of an administrator's signing authority and demands for temporary suspension or dismissal; a ban on profit distribution and dividends; suspension or restriction of certain operations; and cancellation of registration. Failure to submit reporting twice in a row is itself a ground for cancellation of registration.

### May a factoring company accept deposits?

No — accepting deposits from both natural and legal persons is prohibited. Accepting returnable monetary funds is also prohibited, except from its own partners and from financial institutions, including foreign ones; exceptions are the public offering of securities and the private offering to an informed (experienced) investor, as well as cases determined by the National Bank.