Share Deal or Asset Deal: Buying a Hotel in Georgia

A hotel in Georgia is bought in two ways. You buy shares in the owning company (share deal) or the assets themselves (asset deal). In a share deal, the company's debts pass to you with the shares. In an asset deal, contracts, employees and accounts must be re-registered.

Share deal: buying the shares

You buy shares in the LLC that owns the hotel. The changes are registered at NAPR.

Together with the shares, you receive all the company's historical debts and tax risks. That is why guarantees, warranties and escrow are needed.

Asset deal: buying the assets

You buy the building, land, equipment and business. The deal needs a written contract, and the right is registered at NAPR.

A notary is not required: NAPR can certify the signatures.

Contracts, employees, the brand, the domain and accounts on online booking platforms (OTA) must be re-registered.

NAPR fees and terms

Action	Fee	Term
Registering changes (share deal)	200 GEL	1 working day
Registering changes (share deal)	400 GEL	The same day
Extract from the entrepreneurs registry	13 GEL	Online
Registering the right (asset deal)	50–200 GEL, approximate	From 1 to 4 working days

The fee for registering the right is an approximate figure. Confirm the exact amount with NAPR.

VAT

• The sale of shares is exempt from VAT as a financial transaction.
• The transfer of all assets from one VAT payer to another VAT payer is not treated as a supply.
• The supply of land is exempt from VAT.
• A building is subject to VAT at 18%. This applies if the sale does not qualify as the transfer of a going concern.

Confirm the conditions for the transfer of a going concern with a lawyer.

Taxes on the transfer of ownership

There is no property transfer tax and no stamp duty.

Check with a lawyer

• Whether the sale qualifies as the transfer of a going concern.
• Which guarantees, warranties and escrow terms a share deal needs.
• How to re-register contracts, employees, the brand, the domain and OTA accounts in an asset deal.
• Which deal format suits you.