7 Days Business Setup in Georgia: 1% Tax
- Tinatin Tolordava
- 1 day ago
- 6 min read
Table of contents
Day 1 - 1% Tax Georgia
Quick question: how much of your income did you lose to taxes last year? Be honest. 30%? 40%? Maybe half?
Now imagine moving your business to Georgia, registering in less than a week, and telling the taxman: “Here’s 1%. Keep the change.”
Sounds like clickbait, right? Except it’s not. It’s the Georgia small business status 1% tax turnover 500,000 GEL official Revenue Service program, the very real reason freelancers, nomads, and entrepreneurs are flocking here.
This is Step 1 of your 7 Days Business Setup in Georgia series. If you’re serious about opening a company in Georgia, paying just 1% tax, and keeping your business 100% legal, this first step is where it all begins.
Why Georgia is the Shortcut Every Entrepreneur Dreams About
Let’s not waste time. Here’s why people are moving their businesses to Georgia instead of staying trapped in high-tax countries:
Georgia 1% tax: With Georgia small business status 1% tax up to 500,000 GEL official Revenue Service, you pay 1% on your turnover up to the cap (~$180,000). That’s not on profit. That’s on turnover. Clean, simple, no hidden brackets.
Simple setup: You can register business in Georgia in two business days. Yes, really. You can open a company in Georgia faster than most countries issue you a tax ID.
Territorial taxation: Georgia only taxes what you earn here. Foreign income is outside their scope. Your Georgia country tax rate is effectively zero on income earned abroad.
Affordable lifestyle: The cost of living in Georgia country is low, especially in Tbilisi and Batumi. You keep more money and spend less.
Flexibility for foreigners: Anyone can do this. You don’t need citizenship or permanent residency to become an Individual Entrepreneur in Georgia.
It’s no exaggeration: Georgia is one of the few countries where entrepreneurs can save money, stay compliant, and avoid the bureaucratic circus.
Georgia 1% Tax Explained (Small Business Status You Actually Want)
Here’s how the Georgia 1% tax regime really works.
It’s officially called Small Business Status (SBS) and is regulated by the Revenue Service of Georgia. No gimmicks, no loopholes, just clear law.
You register as an Individual Entrepreneur in Georgia.
You apply for Georgia small business status 1% tax turnover 500,000 GEL official Revenue Service recognition.
All turnover up to 500,000 GEL per year is taxed at just 1%.
If you cross the threshold, the extra income is taxed at 3%.
If your turnover is under 30,000 GEL, you qualify as a micro-business and pay 0% tax.
That’s it. No deductions, no complicated accounting rules, no endless forms. Just a single rate on turnover.
Let’s put it into perspective. A freelancer earning $100,000 in Germany could expect to lose $30,000+ in taxes. The same freelancer with Georgia small business status 1% tax up to 500,000 GEL official Revenue Service registration pays around $1,000. Yes, really.
Who Qualifies for Georgia Small Business Status 1% Tax
This part is important. Not every business qualifies. The Georgia small business status 1% tax 500,000 GEL Revenue Service official rules exclude certain industries. Get this wrong and you’re out before you even start.
Eligible for Georgia 1% Tax:
Freelancers serving foreign clients (design, writing, consulting).
Developers and IT professionals coding for companies abroad.
SEO experts, marketing consultants, coaches, and trainers.
A web development company in Georgia serving clients in Europe or the US.
Digital nomads combining remote jobs in Tbilisi with international work.
Not Eligible for Georgia 1% Tax:
Banking, insurance, or financial services.
Gambling and gaming businesses.
Import/export or wholesale trade.
Businesses serving primarily Georgian clients.
If you fall into the first group, you’re in luck. If you fall into the second, don’t worry: other options exist. You can still form an LLC in Georgia or apply for Georgia Virtual Zone status for IT and crypto businesses. But the Georgia 1% tax regime is by far the easiest entry point.
Why Digital Nomads and Remote Workers Love Georgia 1% Tax
Georgia isn’t just business-friendly on paper. It’s lifestyle-friendly too. That’s why it’s quickly becoming a magnet for freelancers, nomads, and remote workers.
Digital Nomad Visa Georgia: The Georgia digital nomad visa lets you stay long-term while running your business legally.
Georgia digital nomad tax perks: Pair the visa with Georgia 1% tax and you’re in one of the best setups worldwide for nomads.
Remote jobs in Tbilisi: The city is buzzing with co-working spaces, startups, and expats.
Georgia state income tax for remote workers: Register as an IE, and you avoid 20% income tax. Instead, you stick to the Georgia small business status 1% tax turnover 500,000 GEL official Revenue Service regime.
Affordable living: The cost of living in Georgia, the country, means your money stretches much further than in Berlin, London, or New York.
Example: A designer in France billing €80,000 pays ~€30,000 in tax. A designer registered as an Individual Entrepreneur in Georgia pays under €800. Same income. Huge difference.
Georgia 1% Tax vs Georgia Corporate Tax Rate
How does the Georgia 1% tax compare to the normal Georgia corporate tax rate? Big difference.
Georgia corporate tax rate: 15%, but only on distributed profits (similar to Estonia’s model).
Dividend tax: 5%.
Personal income tax: Flat 20%, unless you qualify for the 1% IE regime.
Georgia crypto tax: Crypto activities remain lightly regulated. Many blockchain startups set up under Georgia Virtual Zone for tax-free corporate profits.
This is why entrepreneurs love the Georgia small business status 1% tax up to 500,000 GEL official Revenue Service regime. It’s straightforward, transparent, and, unlike most countries’ tax codes, actually easy to understand.
Pitfalls of Georgia Small Business Status You Should Avoid
Of course, nothing is perfect. Plenty of entrepreneurs make mistakes when trying to grab the Georgia 1% tax advantage. And mistakes here can be expensive.
Not registering on time: If you invoice clients before officially registering as an IE, that income gets hit with 20% tax instead of 1%.
Exceeding the 500,000 GEL turnover cap: Go over, and you’re out of the small business regime. For many, this means jumping from 1% to 20% taxation.
Choosing the wrong business category: Some industries don’t qualify for 1%. Get it wrong, and your registration may be revoked.
Ignoring residency rules: Spend 183+ days here, and you’re a tax resident under Georgia state income tax for remote workers. Plan properly, or you could face double taxation.
Banking surprises: Some Georgian banks require in-person verification or business descriptions for foreign-owned entities. Mishandling this step can delay your setup.
These pitfalls are avoidable, but only if you know what you’re doing. The smart move is to plan each step properly from Day 1.
Action Step for Day 1: Decide if You Qualify for Georgia 1% Tax
So what’s your first move?
Step 1 in your 7 Days Business Setup in Georgia journey is to decide whether your business qualifies for the Georgia small business status 1% tax turnover 500,000 GEL official Revenue Service regime.
If you’re a freelancer, digital nomad, or remote worker with turnover under 500,000 GEL, this is your golden ticket.
If you’re building a larger company or need liability protection, tomorrow we’ll compare Individual Entrepreneur vs LLC vs Georgia Virtual Zone.
This decision sets the foundation for everything else. Get it right, and your next six steps are smooth. Get it wrong, and you’ll waste time, money, and potentially lose your 1% tax status.
Final Word: Georgia 1% Tax is Simple, But Step 1 is Critical
Georgia isn’t a “hack.” It’s a country that openly welcomes entrepreneurs. The Georgia small business status 1% tax up to 500,000 GEL official Revenue Service program is one of the cleanest, simplest, and most attractive regimes in the world.
But don’t underestimate Step 1. Deciding if you qualify and registering properly is what separates the entrepreneurs who thrive here from those who end up paying 20% or fighting with the Revenue Service.
At Gegidze, we don’t just explain the rules. We guide you through them. We know exactly how to register your Individual Entrepreneur in Georgia, secure official recognition, and keep your tax rate at 1% — legally, efficiently, and without mistakes.
Step 2 — IE vs LLC vs Virtual Zone: Which Business Model Works Best in Georgia?
Until then, ask yourself: Does my business qualify for the Georgia 1% tax regime? If the answer is yes, you’ve already taken your first real step toward freedom.
