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Crypto Payment Compliance

Is it legal to accept crypto payments in Georgia?

Direct payments in crypto as legal tender are not allowed (only GEL is legal tender). However, businesses can accept crypto via payment processors that convert it to GEL instantly, ensuring compliance.

Do I have to pay tax on crypto income?

Individuals are generally exempt from income tax on profits from crypto sales in Georgia. Companies, however, must pay standard corporate profit tax on revenue derived from crypto transactions upon distribution.

Can I open a bank account for a crypto business?

It is challenging but possible. Georgian banks are risk-averse regarding crypto. Having a robust AML policy and proving the source of funds is essential for approval.

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Introduction: The Legal Reality of Crypto Payments in Georgia

Georgia has established itself as one of the most crypto-friendly jurisdictions globally. However, for businesses and individuals, settling payments in cryptocurrency involves specific legal and fiscal challenges. While owning and trading crypto assets is legal, the Georgian Lari (GEL) is the sole legal tender in the country. This creates a specific environment where companies wishing to accept payments in virtual assets (Bitcoin, USDT, etc.) must adhere to a strict regulatory framework to avoid violating National Bank regulations and tax laws. Crypto payment compliance involves setting up legal mechanisms that allow businesses to legally accept, convert, and record crypto assets in their balance sheets.

This service is vital for e-commerce platforms, real estate developers, IT companies, and exporters looking to expand payment channels for international clients. Engaging a professional lawyer ensures that your payment system is transparent, secure, and fully compliant with Georgian legislation, avoiding the risk of fines and frozen bank accounts.

What Crypto Payment Compliance Covers

This service covers all legal and technical-legal aspects related to integrating virtual assets into business operations. Specialists offer the following assistance:

  • Payment Scheme Structuring: Developing a model where the client pays in crypto, but the company receives GEL (or fiat currency) using licensed processing services, thereby complying with the Organic Law on the National Bank.
  • Contract Adaptation: Inserting special "Crypto Clauses" into contracts to regulate exchange rate differences, conversion timing, and liability in case of volatility.
  • AML/KYC Policy Development: Implementing payer identification procedures when accepting crypto payments to prevent money laundering.
  • Tax Advisory: Addressing taxation of crypto operations, VAT exemption nuances (where applicable), and corporate profit tax calculations considering exchange rate fluctuations.
  • Accounting Methodology: Recording virtual assets in financial statements according to International Financial Reporting Standards (IFRS).
  • Banking Relations: Communicating with banks to verify the origin of transactions and prevent operational suspensions.

Common Scenarios and Use Cases

In business practice, there are frequent situations where crypto payment compliance becomes essential:

  • Real Estate Sales: A developer wants to sell an apartment to a foreign investor who can only pay in USDT. A legal scheme is needed to convert the funds to GEL before finalizing the sale.
  • IT Outsourcing: A Georgian tech company serves a US startup that pays in Ethereum. The company needs to legalize this income and distribute dividends.
  • Online Retail: An e-commerce platform wants to add a "Pay with Crypto" button to attract a tech-savvy audience but is unsure how to account for it.
  • Crypto Salaries: A branch of an international company wants to pay employee bonuses in virtual assets (which is restricted in direct form by the Labor Code) and seeks alternative legal methods.

Georgian Legislation and Regulations

Crypto payment issues are regulated by several key legislative acts. The Organic Law of Georgia on the National Bank of Georgia establishes the Lari as the sole legal tender within the country, which prohibits direct settlement in cryptocurrency (e.g., buying bread directly with Bitcoin is not allowed without instant conversion). Simultaneously, the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism obliges Virtual Asset Service Providers (VASPs) to monitor transactions.

From a tax perspective, the Public Decision No. 201 of the Minister of Finance of Georgia is significant, defining the taxation rule for income received by individuals from the sale of crypto assets (mostly exempt from income tax). However, for legal entities, the general norms of the Tax Code of Georgia regarding profit tax apply. From a civil law standpoint, the Civil Code of Georgia allows virtual assets to be treated as intangible property, enabling barter transactions.

Process of Working with a Specialist

Working with a specialist involves several stages:

  1. Initial Consultation: Analyzing the business model and defining goals (types of crypto accepted, client profile).
  2. Scheme Development: The lawyer designs the optimal payment structure (e.g., via a licensed VASP intermediary).
  3. Document Preparation: Drafting contracts, invoice forms, and internal AML policies.
  4. Implementation: Integrating technical and legal solutions into company processes.
  5. Banking Support: Communicating with the bank for system validation if necessary.

Why Choose Legal.ge?

Legal.ge is the leading platform in Georgia connecting you with experienced lawyers in the digital law (FinTech) sector. Our database includes specialists who deeply understand not only jurisprudence but also the principles of blockchain technology. By finding a specialist on Legal.ge, you ensure that your crypto business is secure, legal, and sustainable amidst changing regulations.

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