The Sector Economy and Economic Policy Committee discussed for the I reading the legal initiative of the Government, the Draft Law on Innovations.

As the Deputy Economic and Sustainable Development Minister, Irakli Nadareishvili elucidated, the Draft stipulates the legal status of the subjects undertaking innovative activities and determines three definitions: “innovative startup”, “innovative small and medium company”, and “research and development service company”.

Innovative startup - a commercial legal entity registered in line with the Georgian legislation, adhering to the legal requirements established for the innovative startups;

Innovative small and medium company - an entrepreneurial company registered in line with the Law on Entrepreneurs and undertaking innovative activity, the volume of the expenses of the research and development of which constitute at least 5% of the incomes earned by the company for the same fiscal year - at least 100,000 GEL, and meeting the legal requirements;

Research and development service company - aiming at stimulating the research and development services and enhancing access thereto in the private sector; the hereof status may be granted to the entity in a single manner or with an open-ended term if meeting the legal requirements.

The reporter introduced yet another legal initiative. According to him, the Draft Law on Factoring and the deriving legal package establish the legal framework regulating factoring and specifying the expected legal and financial outcomes/consequences of the factoring transaction; establishing the factoring parties and the legal mechanisms of right in personam, introducing the legal framework for the factoring register, structuring and institutional functions, which ensures maximal mitigation of factoring deal-related risks.

The Draft establishes the factoring register and enables the registration of a new subject - factoring company.

By introducing the factoring platform advantage, the Draft facilitates the factoring process through innovative financial technologies. As a result, the subjects seeking financing will enjoy yet another fund-attraction mechanism - factoring, and the financial sector will offer a new form of financial service.

According to Shota Berekashvili, the Chair of the Committee, the Draft will introduce enhanced competition to the financial market.

The Committee approved the legal initiatives