Spotlight Georgia

Let me be honest with you: when clients first bring up Georgia, they usually mean the US state. When I correct them (no, I mean the country on the eastern edge of the Black Sea, nestled between Russia, Turkey, Azerbaijan, and Armenia) the reaction is often a polite but skeptical nod. Really?

Yes, really. I have watched Georgia quietly become one of the most interesting business formation destinations in our portfolio. An LLC in one day. A 1% turnover tax for freelancers and consultants. Zero percent corporate tax on IT service exports. Three hundred and sixty-five visa-free days for citizens of 94 countries. A brand-new IT Residency Permit. And a tech sector that grew 31.6% year-on-year in 2025.

This is not a pitch. It is the honest answer to the questions I keep getting asked about Georgia. So let me answer them one by one.

Why Georgia? The Quick Numbers

Georgia is a small country (roughly 3.7 million people, GDP around $30 billion) but it punches well above its weight on business friendliness. The World Bank's 2025 B-Ready report ranks it among the top global performers on business entry, operational efficiency, and taxation. That is not an accident; it is the result of deliberate policy choices made over two decades to attract foreign business.

The headline numbers that matter most to my clients:

• 1% turnover tax for Individual Entrepreneurs with Small Business Status (up to ~$180,000 USD revenue per year)
• 0% corporate tax on qualifying IT service exports via Virtual Zone
• 0% tax on retained and reinvested company profits under the standard LLC (Estonian model: you only pay when you distribute)
• 15% on distributed profits for a standard LLC, plus 5% dividend; total effective rate on distributions is 20%
• 5% corporate tax + 0% dividend under International Company Status (ICS) for companies with genuine local operations
• 18% VAT, mandatory above 100,000 GEL (~$36,000 USD) annual Georgian-source turnover
• 365 consecutive visa-free days for citizens of 94 countries: no application, no permit, just arrive

For context on cost of living: Tbilisi is consistently cheaper than almost every European capital. A well-equipped coworking desk runs $150–350 per month. A decent one-bedroom apartment in the city centre is $500–900 per month. That matters when you are comparing operating costs.

What Kind of Company Should I Set Up?

This is always the first real question. The answer depends almost entirely on your revenue level and whether you are a solo operator or building a team.

Individual Entrepreneur (IE) + Small Business Status

If you are a solo consultant, freelancer, or developer earning under roughly $180,000 USD per year, this is often the cleanest structure available anywhere in the world. You register as an Individual Entrepreneur at the National Agency of Public Registry (NAPR), then separately apply for Small Business Status through the Revenue Service. The result: you pay 1% of your gross invoiced revenue. No complicated deductions. No corporate formalities. No separate legal entity to maintain.

The trade-off is that an IE is not a separate legal entity; your personal assets and business assets are not separated by a corporate veil. For most solo service providers this is acceptable risk. For anyone signing significant contracts or holding meaningful assets, the LLC is the right answer.

LLC (Limited Liability Company)

A Georgian LLC (შეზღუდული პასუხისმგებლობის საზოგადოება, or შ.პ.ს.) is the workhorse structure for foreign founders. Key facts:

• 100% foreign ownership is permitted: no Georgian partner, director, or employee required
• No minimum share capital (nominal 1 GEL is common)
• Registered at NAPR; registration takes 1–2 business days in person
• Registration ID doubles as your tax ID on the Revenue Service portal
• Monthly tax declarations are required even in months of zero activity

The LLC can then receive one of three special tax statuses: Virtual Zone, International Company Status, or it can simply operate under the standard regime (Estonian-model corporate tax: 0% on retained profits, 15% on distributions).

What Are My Tax Options?

Georgia has four meaningful tax regimes for foreign-founded businesses. Here they are side by side, no jargon, just numbers:

A few important nuances the table cannot capture. On the standard LLC: Georgia uses an Estonian-style enterprise income tax model, meaning retained profits that stay in the company are taxed at 0%. You only trigger the 15% rate when you actually distribute. If you are reinvesting into growth, this is genuinely powerful. On the Virtual Zone: the 0% applies only to income from foreign IT clients. If you bill a Georgian company, that income falls under the standard regime. Keep your books clean and separated from day one.

On ICS: it requires demonstrable substance, a real office, real staff on payroll. It is not a paper structure. But for a company genuinely operating in Tbilisi with a team, the combination of 5% corporate tax, 0% dividend, and 5% PIT for qualifying employees is remarkable. Your staff effectively keep 95 cents of every lira they earn from you.

The Virtual Zone: Is the 0% Real?

Yes, with important caveats. The Virtual Zone is a genuine 0% corporate tax status for Georgian LLCs delivering qualifying IT services to clients outside Georgia. It has been available since 2010 and is well-established in Georgian tax law.

What qualifies: Software development, web and mobile application development, IT consulting, system architecture and design, software testing and QA, maintenance of existing systems, hosting, and data processing delivered as an IT service.

What does not qualify: Marketing and advertising services, pure design work (without underlying software), e-commerce (you are selling a product, not an IT service), and services consumed inside Georgia.

The Honest Pitfalls

I would be doing you a disservice if I only described the upside. Here is what can go wrong:

• Your home country may not care. If you are a German resident managing a Georgian Virtual Zone company, German CFC rules can treat the retained profits as your personal income in Germany regardless of what Georgia says. France, the Netherlands, and Sweden have similar rules. Always check your home country's controlled foreign company legislation before structuring around a low-tax jurisdiction.
• Status grants no residence permit. Virtual Zone is a company tax status. It does not make you a Georgian resident. If you want to live in Georgia long-term, you need a separate residency pathway.
• Mostly Georgian clients? Little benefit. If 80% of your invoices go to Georgian companies, you are taxed on 80% of your income under standard rates. The Virtual Zone only shelters foreign-client income.
• Solo founders extracting everything: run the numbers. If you are a solo developer taking all profit as salary, a properly structured IE with Small Business Status at 1% may leave you with more than a Virtual Zone LLC at 0% corporate + 20% PIT + 5% dividend.
• Compliance costs are real. Monthly bookkeeping and tax filings run 150–400 EUR per month depending on complexity. Factor that in against the tax saved.

How Do I Actually Register?

Registration in Georgia is genuinely simple by international standards. Here is the path for a foreigner setting up an LLC:

If you are physically in Georgia: Visit a House of Justice branch with your passport. Sign the company charter before the registry officer. Provide a legal address (a coworking address or leased office is fine). Pay the registration fee. Done in 1–2 business days. Your registration number from NAPR doubles as your tax ID on rs.ge.

If you are remote: You will need a notarised power of attorney, an apostille, and a certified Georgian translation. The document preparation typically takes 1–3 weeks, with the full remote process (documents, registration, bank account, first tax filings) taking 4–6 weeks. Many professional service providers in Tbilisi can handle the full chain.

After registration: If you want Virtual Zone status, you apply through the Revenue Service after your bank account is active. Provide a detailed description of your IT activities and your qualifying client profile. Decisions typically take 1–2 weeks. Importantly, the exemption only applies from the date the status is granted, not retroactively. Time your first major qualifying invoice accordingly.

What About Banking?

Banking is the step most people underestimate. Georgia has solid domestic banks: Bank of Georgia and TBC Bank are the two main players for business accounts, with Liberty Bank as a third option. Account opening for a straightforward business is achievable, but expect the bank to ask for a business description, client contracts or letters of intent, and full KYC documentation.

Timeline varies: some accounts open within days; others take several weeks if the bank has questions about your business model or if your home jurisdiction is on any watchlist. If you have a non-standard background (Russian citizenship, certain African or Asian passports, crypto-adjacent business) expect closer scrutiny and potentially a longer process.

International banking beyond Georgia is possible but requires your structure to have demonstrable substance. A pure Georgia paper company with no activity will struggle to open accounts at European or UAE banks.

Visa, Residency and the 365-Day Rule

This is where Georgia is genuinely unusual. Citizens of 94 countries (including the EU, UK, US, Canada, Australia, Japan, and most other developed nations) can enter Georgia and stay for up to 365 consecutive days without any visa, permit, or application. You just arrive. This is not a 90-day Schengen situation with complex counting. One full year, penalty-free, starting over every time you re-enter.

For many founders and digital nomads, this alone makes Georgia viable as a base. But if you want formal legal status for banking, contracts, school enrollment, or longer-term stability, you have structured options:

Residency Pathways (2026)

The IT Residency Permit, launched in September 2025, is the most interesting new development for tech founders. It gives software developers, IT specialists, and digital product creators a dedicated 3-year residency in 3-year renewable blocks up to 12 years. It is not yet widely publicised; our clients are among the first wave applying, and it signals that Georgia is actively competing for tech talent and founders, not just passing through visitors.

Permanent residency is available after 6 years of continuous temporary residency. It does not lead automatically to citizenship.

Is There a Citizenship or Passport Option?

I include this section because clients always ask. The short answer: Georgia does not offer citizenship by investment or a Golden Passport programme.

Citizenship requires 10 years of total residency (6 temporary plus 4 more), passing language, history, and law exams in Georgian, and, the deal-breaker for most, Georgia generally does not recognise dual citizenship. Acquiring Georgian nationality means renouncing your existing passport. For most international business people seeking optionality, this is simply not viable.

There are documented exceptions for people with Georgian ethnic heritage or descent, where the dual citizenship prohibition may not apply. If that describes your situation, it is worth exploring with a Georgian immigration lawyer.

The Georgian passport sits around 41st–42nd on the Henley Passport Index, with visa-free or visa-on-arrival access to approximately 120 destinations including the Schengen Area. It is a decent document, but not the reason to go to Georgia. If a second passport is your primary goal, you are looking at the wrong country. For that, look at our guides on Andorra, Rwanda, or Mauritius.

Georgia as a Tech Hub

This is the part that surprises people most. Georgia's ICT sector has been the fastest-growing segment of its economy since 2022. In the first nine months of 2025 alone, ICT grew 31.6% year-on-year. Exports from the sector rose 52.3% in the same period. The number of Georgia-based developers on GitHub grew 22% year-on-year to 138,300 in 2024. Over 24,000 IT companies are registered, and the majority were founded by non-Georgians.

Who is already here? EPAM has a significant Tbilisi presence. Teleperformance employs roughly 2,500 people in Georgia. Exactpro (UK) runs its largest delivery hub from Tbilisi. Lineate, an AI services company, operates from here. These are not tourist companies exploring a market; they are operational, with teams and infrastructure in place.

The infrastructure story is stronger than you might expect. Approximately 75% of Georgia's electricity comes from hydropower: reliable, relatively green, and cheap. A new Black Sea Submarine Cable is planned that would give Georgia direct high-speed fibre links to Europe. Nationwide mobile coverage is broad, and Starlink is filling rural gaps. A major new tech hub is opening in Kutaisi (Georgia's third-largest city) in a repurposed parliament building, designed to bridge startups, academia, and investors.

Twenty-one Georgian universities now offer specialized IT programs. That is where the local talent pipeline is being built. For companies establishing teams in Georgia, the combination of strong university output, lower salary expectations than Western Europe, and the ICS structure (5% PIT for qualifying employees) creates a very competitive labour cost model.

Tbilisi itself has transformed. It was already on the map as a food and wine destination; Georgian cuisine is extraordinary and the wine tradition stretches back 8,000 years. The city now has a vibrant coworking ecosystem, a growing expat tech community, and a cost of living that makes founders' runway stretch dramatically further than it would in Berlin, Amsterdam, or Dubai.

Frequently Asked Questions

What is the 1% tax in Georgia and who qualifies?

The 1% tax applies to Individual Entrepreneurs (IEs) who hold Small Business Status in Georgia. Instead of paying the standard 20% personal income tax, qualifying IEs pay just 1% of gross turnover: no deductions, no complexity, just 1% of everything you invoice. The catch: your annual turnover must stay below 500,000 GEL (approximately $180,000 USD). Above that threshold, normal rates apply.

You must register as an Individual Entrepreneur at NAPR, then separately apply for Small Business Status through the Revenue Service at rs.ge. This structure suits freelancers, consultants, developers, and solo service businesses. The trade-off is no corporate veil; your personal and business assets are not legally separated. For anyone signing significant contracts, the LLC structure is safer.

What is the Georgia Virtual Zone and how does the 0% tax work?

The Virtual Zone is a tax status applied to a Georgian LLC that delivers qualifying IT services to clients outside Georgia. Once granted, profit from those foreign IT services is exempt from Georgian corporate income tax, effectively 0%. You still pay 5% when you distribute dividends to yourself, and employee salaries are subject to the standard 20% personal income tax.

Qualifying activities include software development, mobile and web app development, IT consulting, system design, testing, maintenance, and hosting delivered as an IT service. Marketing, pure design work, and e-commerce product sales do not qualify. Virtual Zone status grants no Georgian residence permit; it is purely a company tax status. And critically: if you are a resident of a country with controlled foreign company rules (Germany, France, Netherlands, Sweden), your home country may tax the retained profits anyway. Always check both sides of the equation.

How long does it take to set up a company in Georgia?

If you are physically in Georgia: 1–2 business days for LLC registration at a House of Justice branch. Present your passport, sign the charter, provide a legal address, pay ~100 GEL (~$36 USD). You leave with a registered company.

Remote setup: 4–6 weeks total. Allow 1–3 weeks for power of attorney, apostille, and Georgian translation; then registration, bank account opening (which can take days to weeks), and Virtual Zone application if needed. The entire remote chain from decision to operational company with Virtual Zone status typically takes 4–8 weeks. Bank account opening is frequently the longest step.

How can I get a residence permit in Georgia as a business owner or IT professional?

You have several options. The easiest starting point: citizens of 94 nationalities can simply stay up to 365 consecutive days visa-free, no application required. For formal residency:

• Business permit: Register a Georgian LLC or IE with at least 50,000 GEL annual turnover
• Property investor: Purchase property worth at least $150,000 USD (raised from $100K in March 2026) for a 1-year renewable permit
• Investor residency: Invest $300,000 USD for 5-year residency, covers spouse and minor children
• IT Residency Permit (Sep 2025): For software developers, IT specialists, and digital product creators, 3-year renewable blocks up to 12 years maximum
• Freelance SLAP (Mar 2026): Special Labour Activity Permit for freelancers with 50,000 GEL income, ~30 days processing, fee up to 500 GEL

Permanent residency requires 6 years of continuous temporary residency. It does not lead automatically to citizenship.

Does Georgia offer citizenship or a second passport through investment?

No. Georgia does not have a citizenship by investment or Golden Passport programme. Citizenship requires 10 years of total residency (6 temporary + 4 more), passing examinations in Georgian language, history, and law, and, most significantly, Georgia generally does not recognise dual citizenship. Acquiring Georgian nationality means renouncing your existing passport, which makes it impractical as a second citizenship option for most international business people.

Exceptions exist for people with documented Georgian ethnic heritage, where dual citizenship restrictions may not apply. The Georgian passport provides visa-free or visa-on-arrival access to approximately 120 destinations including the Schengen Area, ranking around 41st–42nd on the Henley Passport Index. If a second passport is your primary goal, Georgia is not the right jurisdiction; look at programmes in the Caribbean, Malta, or similar.