Published on and written by Cyril Jarnias
Setting Up, Structuring, and Optimizing Your Taxes in Georgia is a dream for many international entrepreneurs, especially in tech, consulting, or investment. The country combines ultra-light taxation, a very low cost of living, and fast administrative procedures. But behind the image of a “new offshore El Dorado,” the rules are precise, the regimes vary, and recent reforms to work and residence permits have changed the game.
The key challenge for a foreign entrepreneur is not just reducing taxes, but building a compliant, defensible, and sustainable structure that can withstand scrutiny from foreign tax authorities, banks, and partners.
This article offers a pragmatic overview, in French, of what a foreign entrepreneur should know about residency, permits, and setting up “offshore” companies in Georgia, based solely on the factual data from the research report.
Why Georgia Attracts Foreign Entrepreneurs
In just a few years, Georgia has managed to position itself as a rising, low-cost offshore center, geographically close to Europe but outside the European Union, the eurozone, Schengen, and the OECD. For a mobile founder or an international freelancer, several elements immediately stand out.
The Georgian tax system is territorial: only local income is taxed, while foreign income may be exempt under certain conditions. Companies only pay tax on distributed profits, not on reinvested ones (Estonian model). Individuals benefit from a moderate flat tax, with no wealth tax or inheritance tax. For freelancers, consultants, developers, or investors, the effective tax rate can approach 0%.
On the other hand, everyday life is much cheaper than in most European capitals. In Tbilisi, a budget of around 800 to 1,200 euros per month is often cited for a comfortable standard of living, while professional services (accounting, company formation, registered office) remain inexpensive.
For the foreign entrepreneur, this double advantage—tax and cost of living—is reinforced by ultra-fast company formation procedures (one to two days in most cases), full openness to foreign capital (100% ownership possible), and a tax administration that has heavily invested in digitalization.
A Quick Overview of the Georgian Tax System
Before discussing permits and offshore structures, it is crucial to understand the country’s tax logic. It rests on three pillars: territoriality, the Estonian model for corporate tax, and a flat tax for individuals.
Territoriality: A Key Principle for Mobile Entrepreneurs
In Georgia, personal income taxation is territorial: tax residents are taxed only on their Georgian-source income, while foreign-source income may be exempt from local tax. In practice, a consultant or developer who becomes a resident and invoices foreign clients for services performed outside Georgia (or deemed to be performed outside) can end up at 0% tax on that income, provided the structure is set up properly.
Regimes like Virtual Zone or the International Company status explicitly target income from exporting IT services to non-Georgian clients, with zero or very low taxation, following a logic similar to that for companies.
Estonian Model: Tax on Distributed Profits
Since 2017, corporate tax follows an Estonian-inspired model: there is no annual tax on accounting profit retained in the company. Tax is due only upon certain “taxable events,” mainly the distribution of dividends.
The main features are simple:
– Tax rate on distributed profits: 15%
– Reinvested profits: 0% as long as they remain in the company
– Taxable events: dividend distributions, non-business expenses, gratuitous transfers, and certain entertainment expenses exceeding a threshold
In practice, a Georgian company can accumulate its profits without paying tax, then incur 15% when it pays dividends. For a resident shareholder, a 5% withholding on dividends applies, leading, in the case of full distribution, to an overall effective rate of around 19.25%.
Taxation of Individuals: Simplicity and Niches
For individuals, Georgia applies a 20% flat tax on Georgian-source income. But this raw figure masks very favorable special regimes:
The “small business” regime for sole entrepreneurs in Georgia taxes only 1% of revenue up to GEL 500,000 per year (about €170,000 to €180,000), with no corporate tax or dividend tax.
This combination—territoriality, flat tax, the 1% regime, no CFC rules and no capital gains taxation for individuals—makes Georgia a particularly competitive playground for high-margin entrepreneurs, global freelancers, and investors.
Key Tax Rates to Keep in Mind
Here is a summary table of the main standard tax rates for an entrepreneur or a company:
| Tax / Contribution | Standard Rate in Georgia |
|---|---|
| Corporate tax (on distributed profits) | 15% |
| Dividend tax (individuals) | 5% |
| Personal income tax | 20% (flat rate, excluding special regimes) |
| Small business regime (sole entrepreneur) | 1% of revenue up to GEL 500,000 (~€180,000) |
| VAT | 18% (0% on exports of goods and certain services) |
| Wealth tax | 0% |
| Inheritance tax | 0% |
| Capital gains (individuals) | 0% in many cases |
| Tax on dividends, interest, royalties (withholding tax) | 5% standard (unless treaty applies) |
Setting Up a Company in Georgia: Fast, Inexpensive, and Very Open
For a foreigner, opening a company or registering as a sole entrepreneur is particularly simple. The law permits 100% foreign ownership with no requirement for a local partner, regardless of nationality. Anyone can be a shareholder and/or director, even without Georgian residency.
Most Common Types of Structures
The legal forms most commonly used by foreign entrepreneurs are:
– LLC (Limited Liability Company): the standard form for a commercial or service business, including Virtual Zone or International Company structures. No real minimum capital (theoretically GEL 1 is enough).
– Individual Entrepreneur (IE): suited to freelancers and consultants, especially to benefit from the small business regime at 1% of revenue.
– JSC (joint-stock company), branches, representative offices: less common for freelancers, but possible.
Formation is centralized through the National Enterprise Registry (National Agency of Public Registry). Registration serves as both legal incorporation and tax registration.
Formation Costs and Timelines
One of Georgia’s strengths is the speed of the process and its negligible costs compared with Europe.
For a standard company, we thus find an example illustrating the typical structures or characteristics of such a company.
| Item | Georgia (order of magnitude) |
|---|---|
| Company formation time | 1 to 2 business days in practice |
| Official registration fees | Around GEL 100 (~USD 40) for the standard procedure |
| Express / “instant” service | Accelerated processing available at a higher cost (GEL 160–200 depending on the option) |
| Typical formation cost (with a service provider) | About USD 300 to 800 depending on complexity |
| Minimum share capital | No real minimum; GEL 1 theoretically possible |
| Monthly accounting cost | USD 100 to 200 for a small structure |
| Annual compliance cost | USD 200 to 600 |
Note that some service providers advertise more expensive packages (several thousand dollars) that include full support, registered address, translation, etc. But from a strictly administrative standpoint, the entry ticket is very low.
Procedure and Typical Documents
In practice, the procedure follows a few simple steps:
First, obtain a free TIN from the Revenue Service (usually issued the same day). Then file your application with the Enterprise Registry (form, articles of association, proof of payment, proof of registered address, and the director’s written consent). Any foreign document must be translated into Georgian and notarized. For remote registration, a notarized and apostilled power of attorney is required. Finally, opening a business bank account is often the only step that requires the director’s physical presence.
The company registry is public (napr.gov.ge) and allows you to verify a structure’s existence by its name or TIN, which is useful for reassuring partners and foreign banks.
Banks and Payments: Strengths and Limitations
Georgian banks (Bank of Georgia, TBC, etc.) are known for making it easy to open accounts for local companies and individuals. KYC is still applied seriously (verification of the source of funds, business activity, and beneficial owners), but processing times are generally reasonable: a few days to a few weeks depending on the profile and the quality of the application.
On the other hand, the country is not in the SEPA zone, and transfers to Europe go through SWIFT, with delays of 3 to 5 days and significant fees. In addition, there is no direct compatibility with certain payment processors such as Stripe, which can complicate the collection of European payments for B2C businesses.
Offshore and Optimized Regimes: Virtual Zone, International Company, Free Zone
The real special feature of Georgia for an online entrepreneur lies in its special regimes, particularly for IT service export activities.
Virtual Zone: 0% Tax on Exported IT Profits
The Virtual Zone status is designed for IT companies that sell internationally. It is a tax status granted to a local company (legally, an LLC), which then becomes a “Virtual Zone Person.”
The essential characteristics are as follows:
– 0% tax on profits from IT services sold to non-resident clients (outside Georgia)
– 0% VAT on these service exports
– Exemption from customs duties on exports of software products outside Georgian territory
– No requirement for a local physical office
– No obligation to hire local employees
– No specific annual fee to maintain the status
This rate corresponds to the tax on distributed profits applied to IT services or products sold to Georgian clients.
Dividends distributed by a Virtual Zone company remain subject to the reduced rate of 5%, only at the time of distribution. As long as profits are not distributed, they are subject to neither corporate tax nor dividend tax.
The process for obtaining the status is entirely online, through the tax administration. Review typically takes 10 business days (sometimes up to 15). The administration verifies that the activity indeed corresponds to exported IT services: software development, SaaS, digital services, etc.
International Company: 5% Corporate Tax, 0% Dividends
For IT or BPO players operating on a larger scale, Georgia has created an International Company status. It is more demanding in terms of substance, but retains exceptionally competitive taxation:
– 5% corporate tax, including on local and international revenue
– 0% dividend tax
– 0% property tax on certain IT assets
In exchange for these advantages, the framework is stricter:
To operate in Georgia, you must have a local physical office and employ at least two employees on site. Accounting obligations are strengthened, with specific reporting to be submitted to the supervisory authority (SARAS). In addition, an audit is highly recommended, if not essential, for structures of a certain size.
In practice, this structure appeals to IT or BPO companies that want to develop a real operational base in Georgia, with local teams, while benefiting from a 5% corporate tax rate and untaxed dividends.
“Small Business” Regime for Freelancers: 1% of Revenue
For a sole entrepreneur who does not need a company (consultant, freelancer, trainer, solo developer), the Individual Entrepreneur status with “small business” status is remarkably effective.
The main parameters are:
– Tax rate of 1% on revenue
– Annual revenue cap: GEL 500,000 (about €170,000 to €180,000)
– Above the cap or in the event of repeated exceedance, it is possible to switch to a more standard regime
– Simplified accounting requirements
This status is highly advantageous for high-margin consultants serving an international clientele. Combined with territoriality (foreign income outside the scope in some cases) and the absence of CFC rules, it can result in an overall tax burden close to zero in certain structures, while remaining within international tax legality if it is properly declared in the country of citizenship and protected by double taxation treaties.
Free Industrial Zones
Alongside the Virtual Zone and International Company regimes, Georgia also has Free Industrial Zones (FIZs), located notably in Tbilisi, Kutaisi, and Poti. They generally offer:
– Exemption from profit tax for activities located in the zone
– Exemption from dividend tax for dividends distributed within the zone
– Various customs reliefs
These regimes are better suited to manufacturing or international goods trading than to purely digital services. For a tech or consulting entrepreneur, Virtual Zone and the small business regime remain the main options.
Double Taxation Treaties: A Tool Not to Be Overlooked
Establishing tax residence in Georgia or basing your company there immediately raises the question of double taxation, especially if you maintain strong ties with a country of citizenship (France, Belgium, Canada, etc.) or invoice clients in highly “compliance” states.
Georgia has signed more than fifty double taxation treaties, often based on the OECD Model. Its partners include almost all of Western Europe (France, Germany, Italy, Spain, Switzerland, the Netherlands, Belgium, Luxembourg, etc.), the Nordic countries, much of Eastern Europe, several Gulf states (UAE, Qatar, Saudi Arabia, Kuwait), many Asian jurisdictions (China, Japan, South Korea, Singapore, Kazakhstan…), as well as countries such as India and Israel.
The main effects of these treaties are as follows:
The tax treaty between Georgia and the other country reduces or eliminates withholding taxes on dividends, interest, and royalties. In case of a residence conflict, tie-breaker rules apply: permanent home, center of vital interests, habitual abode, nationality, or mutual agreement between the tax authorities. To avoid double taxation, a tax credit or exemption is provided.
In practice, for a freelancer or an IT structure in Georgia, the concrete benefit of a treaty with a client country is often to limit the withholding taxes that country applies to cross-border payments.
A Wide Network, but Not Universal
Although Georgia’s treaty network is substantial (more than 50 treaties), it is not exhaustive. For flows with non-covered countries, no withholding tax reduction can be invoked. An entrepreneur may therefore end up with dividends, interest, or royalties taxed simultaneously in Georgia and abroad, with no automatic mechanism to offset the tax burden.
In Georgia, payments to low-tax jurisdictions are subject to increased withholding taxes, potentially up to 15%, and strict transfer pricing rules require arm’s-length pricing.
The Tax Residency Certificate: A Key Document
To benefit from a treaty, it is not enough for it to exist: you must prove your Georgian tax residency. This requires obtaining a tax residency certificate issued by the Revenue Service of Georgia.
Without this certificate:
– The foreign bank or tax authority will generally apply the domestic withholding rate, often higher
– Obtaining a refund of overpaid tax later can be lengthy, uncertain, or even impossible
The standard path is to:
– Become a tax resident (183 days of presence over 12 months, or a specific status for high-income/high-wealth individuals)
– Request the certificate on the RS.ge platform
– Have it apostilled by the Georgian Ministry of Justice
– Have it translated and certified in the language of the relevant foreign authority
– Submit it to the foreign bank or tax authority to apply the reduced treaty rate
Residence, Permits, and Work Rights: The “New Era” from 2026
One of the traps for a foreign entrepreneur is focusing on taxation while forgetting the immigration / work-right layer. However, since 2026, Georgia has introduced a mandatory “right to work” (Work Right) regime for most foreigners carrying out professional activity on its territory.
Tax Residence vs. Legal Residence: Two Different Logics
It is essential to distinguish three things:
– Tax residence: depends mainly on time spent in the country (183 days) or high-income/high-wealth criteria. It determines liability to Georgian tax.
– Legal residence (residence permit): authorizes a person to stay in the country beyond a simple visa or visa-free visit. It comes in various categories (work, real estate, investment, IT, studies, family).
– Right to work (Work Right / activity): an administrative authorization, separate from the residence permit, that governs whether a foreigner can work or carry out self-employed activity in Georgia.
Since the reforms, holding a visa or residence permit is no longer enough to authorize paid activity: the corresponding “right to work” is also required.
Who Needs a Right to Work?
The general rule is as follows: any foreigner who does not have permanent resident status must obtain a right to work to carry out an activity that is taxable in Georgia, whether it involves:
– paid employment
– self-employed activity (sole entrepreneur, consultant, trader)
– acting as a functional company director (for certain categories)
The exceptions are numerous and directly relevant to entrepreneurs:
– Holders of a permanent residence permit
– Holders of an investment-based residence permit (with at least USD 300,000 invested)
– Holders of a special permit issued at the initiative of a member of the Georgian government
– Managers, directors, and supervisory board members of most categories of companies (categories I, II, III under the accounting law)
– Certain self-employed individuals focused exclusively on international clients: a sole entrepreneur with small business status working only for foreign clients does not need to apply for a specific right to work
– Remote workers located outside Georgia working for a Georgian company may also be exempt
For a non-salaried IT freelancer working only for foreign clients, registered as an IE small business, the situation is therefore relatively flexible: the permit requirement is expressly relaxed.
Residence Permits: Work, Real Estate, Investment, IT
In parallel, the entrepreneur must choose a legal basis for their medium- or long-term stay. The main routes are:
The main categories of residence permits by purpose of entry and applicant profile.
Based on employment in Georgia or local entrepreneurial activity; to be combined with the right to work.
Available for a non-agricultural real estate investment of USD 150,000 or more. Covers the owner, spouse, and children, with renewable annual residence cards.
For an investment of USD 300,000 or more in the Georgian economy. Initial five-year permit, with conditions for maintaining the investment or meeting turnover requirements. Access to permanent residence after five years of meeting the conditions.
Specific status for IT specialists (employees, entrepreneurs), with a three-year residence card. Criteria: annual income of at least USD 25,000, experience, and consistency of activity. Requires having obtained the right to work.
For students, family reunification, and other family situations.
For a foreign entrepreneur, two paths stand out:
Two main routes for establishing yourself long-term, depending on the amount invested and your residence goals.
Investment of USD 150,000 or more in non-agricultural property. Provides a base of life and a renewable residence permit, valid as long as the property is held.
Investment of USD 300,000. Offers a faster path to permanent residence and an exemption from the right to work, ideal for a long-term foothold in the country.
Typical Process for an Entrepreneur Already in Georgia
A freelancer already established on the ground, operating as an IE and wanting to comply with the new regime, faces a fairly standard sequence:
– Register or maintain your activity (IE, company) with the Revenue Service.
– Determine whether your profile requires a right to work: for example, a freelancer serving local clients will need to obtain one; a 100% export IE small business may be exempt.
– If necessary, submit a right-to-work application via the Ministry of Labor portal (labourmigration.moh.gov.ge), detailing your activity, expected income, and possibly a business plan.
– Once the right to work is obtained, apply for an appropriate residence permit (work, IT, property, or investment) at the Public Service Hall, generally within 10 days of being granted the Work Right if you are already in the country.
Failure to comply with the regime can result in significant fines: a penalty of GEL 2,000 can be imposed simultaneously on both the worker and the company for working without a valid right to work.
Special Regularization Regime for Offshore Companies
A very specific aspect of Georgian legislation, which came into force in 2024, concerns entrepreneurs who already hold an offshore structure (BVI, Seychelles, etc.) and want to “come back to the surface.”
The Georgian Parliament has set up a temporary mechanism allowing the transfer of assets from an offshore company to a Georgian company under extremely favorable conditions, provided that the two companies have the same shareholders.
The key points of the mechanism:
Gains from the transfer of assets from an offshore company to a Georgian company are fully exempt from corporate or income tax if the transaction takes place before early 2028, provided the assets are transferred free of charge and the same ultimate beneficial owner is maintained. In addition, customs duties on importing the assets into Georgia are exempt, and property tax on the assets received is waived until 2030.
The spirit of this regime is clear: encourage “de-offshorization” and prompt entrepreneurs to bring their opaque structures into a transparent framework, without tax penalties, in exchange for anchoring assets in Georgia.
For a foreign entrepreneur who owns an offshore holding company with a stake in a Georgian company or assets in Georgia, this mechanism allows a smooth migration to a clear and tax-advantageous Georgian structure, with no immediate tax bill.
Strengths and Limitations of Georgia for an International Entrepreneur
Georgia ticks many of the boxes international founders look for, but it is not the universal solution. The ideal strategy depends on the industry, client profile, country of citizenship, and tolerance for regulatory risk.
The Major Advantages
For a foreign entrepreneur, the main advantages can be summarized as follows:
A tax and business environment designed for entrepreneurs and IT companies.
0% on foreign income, 1% on revenue for IE small business, 0% on exported IT profits (Virtual Zone), 5% corporate tax for International Company, 0% on wealth and inheritance, capital gains largely exempt for individuals.
Rents, salaries, accounting, and consulting are significantly cheaper than Western European standards.
Registration in 1 to 2 days, low official fees, and no real minimum capital requirement.
Full foreign ownership allowed, with no requirement for a local director.
Simplified account opening and efficient online platforms, despite serious KYC.
Virtual Zone and International Company regimes, IT permits, untaxed crypto for individuals, and no CFC rules.
Points to Watch Out For
But Georgia is not a panacea, and certain factors should be taken into account before betting everything on this country:
European financial infrastructure is limited (no SEPA, costly SWIFT, payment processors like Stripe not natively available), the tax treaty network is incomplete with unrecoverable withholding taxes in some major markets, asset protection is weaker than in Cyprus, the regulatory environment is tightening after 2026 (substance, work rights), and the Georgian language, difficult and little understood, hinders integration and access to services.
How a Foreign Entrepreneur Can Structure Their Presence
Each case is specific, but we can outline a few typical scenarios in light of the rules described.
Scenario 1: IT Freelancer or High-Margin Consultant, Income < €180,000 / Year
A developer, business consultant, or online coach, working mainly with foreign clients, can consider:
To benefit from advantageous taxation in Georgia, you must first establish your tax residence there, for example through the 183-day rule. Next, register as an Individual Entrepreneur (IE) with small business status. Make sure to comply with the right-to-work rules, unless you are exempt as a 100% export IE. Invoice your foreign clients under your IE name, paying 1% on revenue up to GEL 500,000, and take advantage of territoriality so that foreign-source income is not taxed when it applies. Finally, check double taxation treaties country by country to avoid unjustified withholding taxes, by presenting a Georgian tax residency certificate.
Scenario 2: SaaS Startup or Digital Agency with an International Clientele
A team developing software or operating an international agency could:
– Create a Georgian LLC.
– Apply for Virtual Zone status to benefit from 0% corporate tax and VAT on exported IT revenue.
– Let some founders become Georgian tax residents, or not, depending on their personal constraints.
– Distribute profits from time to time, incurring 5% dividend tax for Georgian residents (with possible treaty relief for non-residents).
For larger teams looking to set up a service or development center in Georgia, the International Company status offers a better long-term balance, with 5% corporate tax and dividend exemption, but substance requirements to meet.
Scenario 3: Investor Looking to Secure a Residence Base
An international investor, possibly already the owner of an offshore company, can:
– Invest USD 150,000 in non-agricultural real estate in Georgia to obtain a property-based residence permit, covering their immediate family.
– Go further with a USD 300,000 investment (real estate or share capital of a Georgian company) to obtain a five-year investment permit, which can lead to permanent residence if the conditions for maintaining the investment and meeting turnover requirements are met.
– Use the special regime for transferring assets from an offshore company to a Georgian structure before the deadline, with exemption from tax and import duties, to “launder” in a regulatory sense an old offshore structure within a transparent framework.
In Conclusion: A Powerful Tool, to Be Used with Method
Georgia offers foreign entrepreneurs an impressive set of tools: very low taxation, specific models for tech, a territorial framework for individuals, residence regimes through investment and real estate, and even a regularization mechanism for existing offshore structures.
But this power requires a structured approach:
To optimize your setup, clearly distinguish tax residence, residence permit, and right to work. Select the combination that fits your needs (IE small business, standard LLC, Virtual Zone, International Company, real estate, investment). Anticipate the limitations, including incomplete double taxation treaties, non-SEPA payment infrastructure, and the growing requirement for real economic substance. Carefully document your tax residence (certificates), your flows, and your operations so that you remain defensible before the authorities in your home country and client markets.
For an entrepreneur willing to invest time in understanding the rules and to adapt their organization (banks, payment methods, on-site presence), Georgia can become an extremely effective base, both for legally optimizing the tax burden and for quality of life and flexibility in structuring their international business.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
