Category: კატეგორიის გარეშე

Over the past six months, in September 2025 and January 2026, a Georgian real estate investment company acquired two shopping malls in Tbilisi. The total value of both transactions amounted to approximately GEL 102 million (approximately USD 38 million). Within the scope of both transactions, full financial and tax due diligence of the target companies was conducted by Ants.

In transactions of this scale, due diligence represents one of the most critical stages, aimed at providing the investor with a comprehensive understanding of the company’s actual financial position, profitability, debt levels, working capital requirements, and tax risks.

Scope of Work Performed by Ants

As part of the transaction, Ants conducted full-scope financial and tax due diligence, covering the following key areas:

 

Financial Due Diligence

• Detailed analysis of the last 3 years’ financial statements, management accounts, budgets, and operational data
• Quality of earnings analysis and EBITDA normalization, including separation of one-off and non-operating income and expenses, as well as margin analysis
• Testing of revenue recognition in accordance with IFRS 15 principles
• Calculation of net financial debt
• Analysis of cash, borrowings, leases, and other financial liabilities
• Calculation of normalized working capital and analysis of the working capital cycle
• Review of balance sheet items, including receivables collectability, inventory, provisions, and accounting estimates
• Identification of off-balance sheet and contingent liabilities
• Analysis of cash flow generation capacity, capital expenditure requirements, and operational sustainability

 

Tax Due Diligence

• Review of compliance with corporate income tax, VAT, and payroll-related taxes
• Assessment of risks related to deemed (indirect) profit distributions
• Identification and quantification of tax risks and liabilities
• Assessment of tax implications of the transaction

 

Operational Review

• Analysis of the company’s corporate structure, capital, shareholders, and compliance
• Review of key contracts (customers, suppliers, banks, leases), including change-of-control provisions
• Management interviews and business model assessment
• Analysis of customer concentration and key risks

 

Transaction Support

During the due diligence process:

• A report was prepared, identifying key risks and issues impacting the transaction
• Final financial and tax due diligence reports were prepared
• Due diligence findings were used to structure price adjustment mechanisms in the Share Purchase Agreement (SPA), including:
  • EBITDA adjustments
  • Determination of net debt
  • Working capital analysis
  • Representations and warranties

 

Importance of Due Diligence for Investors

In large transactions, the primary objective of financial due diligence is to ensure that the investor clearly understands:

• The company’s normalized EBITDA
• The actual level of debt (net debt)
• The working capital required to operate the business
• Whether there are tax risks or hidden liabilities
• The sustainability of the company’s cash flows

These factors ultimately determine the final purchase price and transaction structure.

 

Role of Ants in the Transactions

In these transactions, Ants acted as the financial and tax advisor to the investor and was fully responsible for planning the due diligence process, requesting information, analyzing data, identifying risks, and preparing final reports.

Ants’ involvement in projects of this scale demonstrates the company’s expertise in financial due diligence, tax due diligence, and financial advisory support in M&A transactions.

 

About Ants

Ants is a leading accounting, tax, and financial services company, serving more than 700 client companies on a daily basis. The company has been operating in the Georgian market for over 10 years and, in 2023, was named the winner of the country’s largest business awards organized by TBC Bank in the nomination “Outstanding Customer Experience.”

In addition to other services, Ants provides:

• Financial due diligence
• Tax due diligence
• Quality of earnings analysis (EBITDA normalization)
• Net debt and working capital analysis
• Transaction advisory services
• Financial modeling
• Tax structuring of transactions

The company serves both local and international investors and participates in M&A transactions as a financial and tax advisor.

Our client companies that have foreign employees often ask us questions regarding the upcoming labor migration rules. On June 26, 2025, the Parliament of Georgia adopted a package of amendments to the labor migration laws. Starting March 1, 2026, the simple registration system is being replaced by a strict, mandatory two-stage permitting process.

 

In this article, we will simply explain what the “Special Labour Permit” entails, who is exempt, and what you should consider to avoid financial penalties.

Who Does the New Regulation Apply To?

Obtaining the Special Labour Permit is mandatory for foreign nationals without Permanent Residence (PR) who are engaged in activities for financial gain. Specifically, this applies to:

• Labor Migrants: Foreigners working for local Georgian employers.
• Self-Employed Foreigners: Individuals registered as Individual Entrepreneurs (IE) or partners in Georgian companies.
• Digital Nomads/Remote Workers: Those working remotely for a Georgian entity. Any link to a Georgian employer triggers the permit requirement.

Who is Exempt?

The law provides specific exemptions. You do not need this permit if you fall into one of these categories:

• Holders of Investment Residence Permits and Permanent Residence Permits.
• Refugees, asylum seekers, and accredited journalists.
• Remote workers whose work is performed exclusively for foreign entities with no local economic footprint.

What Are the Stages of the Process?

Starting in March 2026, legalizing your work status follows a strict sequence:

 

1. Stage 1: The Special Labour Permit. The local employer submits the application for employees, whereas self-employed foreigners apply on their own behalf. The Ministry of Labor, Health, and Social Affairs reviews the application, which takes up to 30 calendar days.
2. Stage 2: Immigration Status (Visa or Residency). Once the permit is granted, the applicant must apply for an immigration status. If the applicant is outside Georgia, they must apply for a D1 Immigration Visa within 30 days. If they are already in Georgia, they must apply for a Work Residence Permit or IT Residence Permit within 10 days.

Critical Requirements & Rejection Risks

The Ministry may reject or revoke a permit based on several critical factors:

• Labor Market Needs: Applications can be rejected if the foreigner’s qualifications do not match market needs or if the profession is classified as “restricted” to protect local labor.
• Turnover Threshold: The underlying residency often requires the employing company to have an annual turnover of at least 50,000 GEL per foreign employee.
• Administrative Delays: Renewal applications must be submitted at least 30 days prior to expiration. Late filings will lead to administrative rejections.

What Happens in Case of Rule Violations?

The 2026 rules introduce significantly higher penalties for non-compliance:

 

• Unauthorized Work: Foreigners working without a permit and employers hiring them face a fine of 2,000 GEL for the first offense.
• Repeated Violations: For repeated offenses, fines may be doubled or tripled.
• Administrative Breach: Failing to notify the Ministry regarding a contract termination can result in fines ranging from 1,000 to 2,000 GEL.

What Should Already Employed Foreigners Do?

For foreigners who are already working and registered in the Ministry’s database before March 1, 2026, there is a transition period. These individuals have until January 1, 2027, to obtain the new Special Labour Permit and align their residence status with the new rules. In order to fully benefit from the transition period for employees already working for the company, employers must ensure that these employees are registered on the Migrant Portal, as required by law. Otherwise, starting March 1, 2026, they will be required to obtain a labor permit.

 

How “Ants” Can Help Your Business

Navigating these changes requires meticulous timing to ensure no gaps in legal status. Given the 30-day processing times and strict 10-day residency filing windows, early preparation is the only way to avoid administrative rejections and fines. Our experienced team provides:

 

• Full Process Management: We handle the end-to-end coordination between the Ministry of Labor and the Public Service Hall (House of Justice).
• Advance Organization: Even if your employees are already registered under the old system, we help organize all documentation in advance to ensure a seamless transition to the new Work Permit and Residency status.
• Compliance Audit: We review your current employment contracts and prepare the necessary documentation to ensure they meet the 2026 legal standards before you apply.

Contact us today so we can assist you in managing this process and ensuring full compliance for your business or employment.

At the beginning of 2026, a significant investment was carried out in Georgia’s wholesale trade sector, specifically in the distribution of baby food products. As part of the transaction, foreign investors acquired controlling stakes in three Georgian companies.

The combined valuation of the three companies amounted to approximately GEL 20 million, while the acquisition price of the controlling stakes exceeded GEL 10 million, making this one of the significant transactions in the sector.

 

A Strategic Investment in a Growing Sector

The acquired companies – LLC R.D.C, LLC G.T.C, and LLC T.E. – operate in the wholesale trade industry, specializing in the distribution of baby food products — a segment that has demonstrated stable growth in recent years.

For the foreign investors, this transaction represents part of a broader regional expansion strategy, where understanding the local market and managing risks is of critical importance.

 

Role of “Ants”

As part of the transaction, the investors selected a local financial consulting company and engaged “Ants” — a leading Georgian accounting and tax advisory firm.

“Ants” conducted financial and tax due diligence of the target companies, which included a comprehensive analysis of their financial position, tax risks and potential liabilities.

In transactions of this scale, due diligence is one of the most critical stages, directly impacting the investment decision-making process and deal structuring.

This project clearly demonstrates that large-scale investments in Georgia are increasingly driven by professional analysis and proactive risk identification.

 

 “Ants” Comment

“Ants” is a leading accounting and tax advisory firm in Georgia, serving hundreds of companies on a daily basis.

In large transactions, cooperation with a reliable and experienced partner is crucial for investors. Our involvement in projects financed by foreign investors once again highlights Ants’ role as a trusted and professional partner, helping investors make well-informed decisions.