Legal Overview

The legal system of Georgia has undergone significant changes over the past decade. Georgia has adopted laws of various levels in various fields. First to be mentioned is the Constitution of Georgia, the supreme law of the country, which was adopted by the parliament on 24 August 1995.

The enforcement of the Civil Code on 25 November 1995 was an important milestone in the modern history of the Georgian legal system. This Code regulates property, family and personal relations of a private nature, based on the equality of persons. The Civil Code of Georgia consists of six books, each representing a separate law (see Civil Code).

In 1995 Georgia enforced the Law on Entrepreneurs, which regulates relations between entities engaged in entrepreneurial activity, provides requirements for setting up an enterprise and carrying out activities. The adoption of the Civil Code and the Law on Entrepreneurs was of crucial importance for Georgia to move to a new stage of civil relations.

Besides the laws in civil sphere, Georgia adopted a Criminal Code as well, which entered into force in June 2000. The General Administrative Code, which was also enforced, was of special importance because it made information available. This Code regulates the process of receiving information from entities, defines the notions of an administrative act and an administrative contract, specifies the procedure for nullifying an administrative act and spells out consequences which may ensue from certain actions. Thus, this Code is also very important in essence.

Besides the above said, the procedural legislation has been completely changed and new Civil Procedural Code, Administrative Procedural Code and Criminal Procedural Code adopted. These codes are revisited time and again to incorporate considerations of international and non-governmental organizations. Significant improvements have been achieved in such judicial aspects as expertise, interrogation of eye-witnesses and time-frames for conducting investigations.

A number of laws have been also adopted with regard to entrepreneurial and investment activities, citizenship issue, as well as the ones to regulate normative acts and relations between persons of public law. The most notable laws among those enacted over the past decade are the laws on citizenship; on the legal status of foreigners; on emigration; on immigration; on temporary entry, stay and exit of aliens; concerning police; on keeping and bearing arms; on prices and price formation; on energy; on motor roads; on science; concerning the auditory activity; on bonds; and on cheques. A number of laws were adopted in the health care sector. The law on normative acts defines types and hierarchy of normative acts. It should also be noted the laws on the privatization of agricultural land, non-agricultural land, and state property following which Georgia carries out the privatization. The law on monopolistic activity and competition regulates monopolistic activity in Georgia and the antimonopoly service was established on the basis of this law. The law on grants deals with the taxation of goods and monetary means received in the form of grants. The laws adopted in the financial sector – the Tax Code, Customs Code, the Law on the Activity of Commercial Banks - are of special importance as well. The tax code, being into force since 1995, was replaced by a new Tax Code on 1 January 2005. Under the new Tax Code some tax rates were decreased and several taxes abolished, thus partially reflecting the requirements of the society. The activity is under way for further elaboration of the Tax Code.

There is a law on private arbitration, which regulates disputes arising between persons of the private law. However, it should be noted that private arbitrations are not much applied in Georgia. The first reason is that the law often allows challenging decisions of private arbitration in courts of first instance, which makes the activity of the private arbitration ineffective. Another reason is court fees that are extremely high for private arbitration and, consequently, the sides try not to approach this court for their disputes. The private arbitration is often approached by the sides of secret deals where the sides want to avoid going through official instances. Promoting private arbitration activity was the aim of that part of the new Tax Code, which demanded that tax disputes be resolved in the private arbitration., However, it turned out that tax disputes were not often resolved in favor of the state and therefore, the code was amended to stipulate that such disputes be resolved only in courts of general jurisdiction.

A number of laws have been adopted in the field of insurance, in particular, the laws on medical insurance and on general insurance. The law on securities is also worth mentioning. It aims at developing a securities market in Georgia, protecting the investors' interests on securities market, ensuring the transparency of trading in securities, and establishing fair and free competition in publicly held securities trading. This Law does not stipulate rules for the issuance and public offering of state securities, as well as for trading held outside a stock exchange.

Article 6 of the Georgian Constitution says that the Constitution is the supreme law of the state, while all other legal acts shall be issued in accordance with the Constitution. The legislation of Georgia corresponds with universally recognized norms and principles of international law. The laws on international law and on international private law are also adopted in Georgia and they regulate the relations with subjects of the international law. The hierarchy between the international agreement and Georgia’s domestic legislation is also determined. The Constitution stipulates that international treaties or agreements take precedence over domestic legislation but have less power than the Georgian Constitution. Georgia is a party to a number of international normative acts of which the European Convention on Human Rights is of special importance. Being a member of a whole lot of international organizations, Georgia has assumed certain obligations the implementation of which is being monitored. Some citizens of Georgia appeal to the European Court of Human Rights to defend their rights.

The Georgian Constitution is adopted either through referendum or by parliament. The Constitution of Georgia was adopted by the parliament by a qualified majority of votes. Laws are adopted by the parliament, while sub-laws – by representatives of the executive branch. There are individual legal acts that are adopted following the rule stipulated in the law on normative acts. The president of Georgia has the right to issue a decree, which has the power of law.

Georgia belongs to the countries of Romano-Germanic law, be it in the sphere of civil and criminal law or the public law. However, the tendency towards introducing Anglo-Saxon laws has been recently observed, examples of such adopted laws are the laws on procedural transactions and on the freedom of speech and expression.

Georgia is a party to the EU initiative, the European Neighbourhood Policy, which, from a legislation standpoint, means that the Georgian legislation should be brought in line with the EU laws.

AmCham and/or EUGBC Members

Gvinadze & Partners LLC
44 Leselidze Street
Tel: (+995 32) 438 970
Fax: (+995 32) 438 971
Website: www.gvinadzeandpartners.ge 
Gvinadze & Partners LLC is a leading Georgian business law firm. For further information, please refer to their website.

American Bar Association / CEELI
Tel: (+995 32) 923 578
Website: http://www.abanet.org/ceeli/countries/georgia/
ABA/CEELI works to promote the rule of law in Georgia, including promoting improvements in Georgia's judiciary system and legal profession, promoting the training of judges and lawyers, promoting anti-corruption policy, assessing proposed legislation, advocating women's rights, assisting Georgian partner organizations, and working closely with the Government of Georgia in developing rule of law policy.

 Business & Legal Consulting
Tel: (+995 32) 922 491
Website: http://www.blc.ge
Business & Legal Counsel provides professional legal consulting in insurance, banking, telecommunications, energy, oil & gas sector, aviation and infrastructure development.

Deloitte & Touche
Tel: (+995 32) 252 257
Website: http://www.deloitte.com
Deloitte & Touche's Tbilisi office provides international accounting standards (IAS) audits, tax consulting, and related services to Georgian and multinational corporations in Georgia and throughout the Caucasus.

 DLA Piper
10 Melikishvili Street, Tbilisi
Tel: (+995 32) 509 300
Fax: (+995 32) 509 301
Website: http://www.dlapiper.com
With 3, 500 lawyers located in 29 countries and 67 offices throughout Asia, Europe, the Middle East and the US, DLA Piper is positioned to help companies with their legal needs anywhere in the world. In Tbilisi the firm specializes in the provision of business legal services in commercial transactions, litigation, privatizations, regulatory matters, real estate and natural resources (oil, gas, mining).

 PriceWaterhouseCoopers
Tel: (+995 32) 508 050
Website: http://www.pwc.com
PricewaterhouseCoopers provides industry-focused assurance, tax and legal and advisory services for public and private clients. More that 120,000 people in 146 countries connect their thinking, experience and solutions to build public trust and enhance value for clients and their stakeholders.

 BGI Advisory Services Georgia
18, Rustaveli Avenue, II floor, Tbilisi
Tel: (+995 32) 997292
Fax: (+995 32) 996615
Website: http://www.bgi.ge
BGI Legal is part of BGI Advisory Services Georgia, an international advisory services group based in Georgia. BGI is a successor of GCG Law Office (member of the Andersen Legal network at the time) and shares the legacy of EY Law Tbilisi. Currently, BGI is Georgia's leading full service law firm, offering its clients full scale of legal and professional services. Our practice offers unparalleled diversity and breadth in its ability to guide clients in the increasingly sophisticated environment of Georgia’s fast-paced economic and legal development.

BDO LLC
Tel: (+995 32) 545845
Website: http://www.bdo.ge
BDO LLC, previously Tbilisi Managers & Consultants (TMC), is the Georgia Member Firm of BDO International. BDO LLC offers audit and business advisory services to international and local clients. With ten year successful experience on Georgian market since 1999 BDO LLC presently ranks third among the largest auditing companies in the country.

Mgaloblishvili, Kipiani, Dzidziguri (MKD) Law Firm
Tel: (+995 32) 973880
Website: http://www.mkd-law.ge
Founded in November 1996, Mgaloblishvili, Kipiani, Dzidziguri (MKD) is a full service law firm. With local, national and international clients, the company serves as a legal counsel to corporations, NGOs, state entities and individuals.

fasdfsd