Georgian LLC vs. Delaware C-Corp

Almost every Georgian founder eventually picks between these two structures. The wrong frame is "which is better." Both are good, for different things. The right frame is "what am I optimizing for in the next 12 months?" — local operations, grant eligibility, hiring, foreign customers, fundraising — and pick the structure that doesn't fight that goal.

This primer is a side-by-side comparison on the dimensions that actually matter, with the Western investor angle made explicit so you can see what they're seeing.

Formation

Georgian LLC (შპს). Registered with NAPR (National Agency of Public Registry) at napr.gov.ge. Filing is online, takes ~24 hours, costs ₾100–200. One founder is allowed; no minimum share capital. matsne.gov.ge — სამეწარმეო კოდექსი — matsne.gov.ge

Delaware C-Corp. Registered via the Delaware Division of Corporations. Filing is online via a registered agent, takes ~24 hours, costs $200–500 plus annual franchise tax. You'll also need an EIN from the IRS, a US bank account, and a US registered agent address — none of which is hard but all of which takes time. Stripe Atlas — Entity comparison — stripe-atlas

If your goal is to test an idea this week, the Georgian LLC is faster. If your goal is to take YC checks next month, the Delaware C-Corp is faster.

Tax treatment

Georgian LLC. Corporate income tax is 15%, applied to distributed profits only (Estonian-model deferral — retained earnings are not taxed until distributed). VAT is 18% above a turnover threshold. Personal income tax is 20% flat. rs.ge — Revenue Service Georgia — rs.ge

Delaware C-Corp. Federal corporate income tax is 21% on worldwide income. Delaware franchise tax is $400–200,000+ depending on structure (default minimum for most startups: $400 + $50 filing). State income tax depends on where the company operates, not where it's incorporated. Distributions are taxed again at the shareholder level — the classic "double taxation."

For a profitable Georgian SaaS that retains earnings, the LLC's tax bill is materially lower than the C-Corp's. For a venture-funded startup that doesn't expect profits for years, the tax structure barely matters — what matters is investor familiarity.

Capital structure

Georgian LLC. Capital is split into shares (წილები) defined as percentages or fractions of the charter capital. There is no native concept of "preferred shares with liquidation preference" — protective economics for an investor have to be built into the corporate charter through customized provisions, with mixed enforceability. This is the single biggest reason US investors hesitate. matsne.gov.ge — სამეწარმეო კოდექსი — matsne.gov.ge

Delaware C-Corp. Capital is split into authorized shares of common and (typically multiple classes of) preferred stock. Preferred can carry liquidation preference, conversion rights, anti-dilution protection, voting rights, and protective provisions — all on standard terms from the NVCA model docs. This standardization is what Series A practice depends on. NVCA model docs — nvca

For raising from a Georgian investor or angel, the LLC works. For raising from a Delaware-fluent VC, the C-Corp is the path of least friction.

Stock options for employees

Georgian LLC. ESOPs exist but the legal infrastructure is thinner. Granting "options" in an LLC typically requires either issuing share-purchase rights against the charter capital (which dilutes immediately on grant) or a synthetic / phantom equity instrument that pays cash on a liquidity event (not the same thing). Georgian Labor Code and Tax Code govern how these are taxed.

Delaware C-Corp. ISO (Incentive Stock Option) and NSO (Non-Qualified Stock Option) frameworks are mature, with 409A valuations setting the strike price and standard 4-year vesting / 1-year cliff schedules. Every US employee has been recruited with this in mind; every US-fluent engineer expects it.

If you want to hire someone in San Francisco with equity as part of the package, the C-Corp gives you the vehicle that matches their expectations.

IP ownership

Georgian LLC. Standard employment contracts assign work-product IP to the company. Pre-incorporation IP and contractor IP need explicit assignment in the relevant contracts. Georgian IP law is WIPO-aligned; copyright vests on creation; patent registration goes through Sakpatenti. sakpatenti.gov.ge — napr.gov.ge

Delaware C-Corp. Same fundamentals, but US investors will run an IP audit and want to see specific US-style assignments (PIIA — Proprietary Information and Inventions Assignment) signed by every employee and contractor. The substance is similar; the paperwork is more formal.

The honest gap is enforceability of cross-border IP claims. A Delaware C-Corp suing a former Georgian contractor for IP misuse is a hard case; a Georgian LLC suing the same is easier in the Georgian courts but harder to translate into a US settlement.

Banking and customer payments

Georgian LLC. Local banks (TBC, Bank of Georgia, Liberty) open accounts cleanly. International payments work but customer-side processors (Stripe, in particular) don't onboard Georgian-domiciled merchants without workarounds. Many Georgian SaaS companies use a Wise / Payoneer / Revolut Business setup as a bridge.

Delaware C-Corp. Stripe Atlas + Mercury Bank is the default stack, set up in days. Customer ACH / credit-card flows are friction-free for US buyers. International payments are excellent. The cost is the ongoing compliance: 1099s, sales tax across US states once you cross nexus thresholds, beneficial-owner reporting.

If your customers are in the US, the C-Corp removes friction worth real money. If your customers are in the EU or CIS, the LLC is at least neutral.

Exit mechanics

Georgian LLC. A trade sale of a Georgian LLC works — share purchase agreement, change of control, NAPR re-registration — but every potential acquirer has to do their own legal diligence on a structure their bench doesn't recognize. That extends close timelines.

Delaware C-Corp. Every US acquirer's M&A team has seen 100+ Delaware C-Corp transactions. Diligence templates exist. Close is faster, terms are standard, and the buyer's investment committee has fewer unknowns to debate.

When to start with which

Start as a Georgian LLC if:

• You're testing an idea pre-funding
• You're applying for GITA / EU / EBRD grants that require local registration
• Your initial customers and revenue are in Georgia / EU
• You're hiring Georgian-resident talent in the first 12 months

Start as a Delaware C-Corp if:

• You have an offer from a US VC waiting on the structure
• Your first 5 hires are in the US
• Your customer ACV / payments model assumes Stripe Atlas
• You expect to fundraise in 6 months and want to skip the flip

Both groups exist. Neither is wrong. The expensive mistake is choosing without naming what you're optimizing for. Cooley GO — Delaware C-Corp basics — cooley-go

Take this to your attorney

The paired one-pager has the 10 questions to bring before you commit. The right structure for you depends on facts a US-only generalist or a Georgia-only generalist will both miss — you need someone who can walk you through both.