Can Foreign IT Companies and Startups Qualify for Georgia’s IT International Status?
- Tinatin Tolordava
- Aug 19
- 9 min read
Updated: Aug 20
Table of contents
The Hidden Gem for International Tech Companies
You’ve probably heard of Estonia’s e-residency. Maybe you’ve looked at Ireland for its corporate tax perks.
But what if you could base your IT company in a country with 5% corporate tax, 0% dividend tax for foreign shareholders, and only 5 percent payroll tax for your employees?
Welcome to Georgia. Not the U.S. state. The country. A Black Sea nation with mountains, wine, and one of the most flexible IT tax regimes on the planet.
But don’t mistake this for an offshore gimmick. Georgia’s International Company Status isn’t about hiding profits or cutting corners. It’s a real, legally sound structure for companies that are building, coding, hiring, and scaling.
Foreign-owned tech companies and startups can qualify, but you need to know the rules, the exceptions, and how to actually meet the criteria.
Let’s break it all down.
What Is the IT International Company Status?
Georgia’s International Company Status is a special tax designation launched in 2020. It was created to attract high-value IT and maritime businesses to the country.
Think of it as a VIP pass to Georgia’s most generous tax structure, but only for companies that prove they are serious about doing business here.
This status isn’t automatic. It’s granted by Georgia’s Ministry of Finance after a company applies and demonstrates it meets all the requirements. Once approved, the tax advantages are significant.
You get:
5 percent corporate profit tax instead of the usual 15
0 percent dividend tax when dividends are paid to foreign shareholders
5 percent personal income tax for employees instead of the standard 20
Exemption from property tax on assets used in eligible activities (except land)
These benefits make Georgia one of the most tax-efficient jurisdictions in Europe for IT companies. But they also come with responsibilities. This isn’t a paper structure. It’s a real, functioning business model that requires you to establish a presence, operate transparently, and do actual work in Georgia.
Who Can Qualify for International Company Status?
Now, let’s talk eligibility. Not every tech company can apply. The rules are clear, but they also leave room for flexibility if you know how to structure your business correctly.
Here are the main qualifications:
1. Your Company Must Be a Georgian Entity
The first rule is non-negotiable. Your company must be incorporated in Georgia. The most common setup is a Georgian LLC, which can be 100 percent foreign-owned. You can’t just operate through a foreign branch or a virtual presence. You need to be legally registered here.
The process of registering a Georgian LLC is fast and affordable. It usually takes one or two business days and costs less than 100 USD in government fees. Once registered, you can proceed to apply for International Company Status.
2. You Must Have at Least Two Years of IT Experience
The company applying must have at least two years of proven experience in IT or related activities. This doesn’t mean the Georgian entity itself must be two years old. If the company is a subsidiary of a foreign parent that has been operating in IT for two years or more, that counts. You can also use group structures, where multiple shareholders jointly hold the experience.
This requirement ensures that the regime is used by real businesses with a track record, not shell companies looking to abuse tax benefits.
3. Your Activities Must Be in Approved IT Fields
Georgia doesn’t just give tax benefits to anyone calling themselves a tech company. Your business activities must fall into specific categories. These include:
Software publishing, including apps, games, SaaS tools
Custom software development for clients
IT consulting, software testing, and debugging
Cloud computing, web hosting, and digital infrastructure services
System maintenance, cybersecurity, and data protection
Remote systems administration and server management
Platform development and management
AI development, machine learning, and technical R&D
The Ministry of Finance reviews your scope of work before approval. If your services clearly match the approved list, your chances of qualifying are strong. If your activities are unclear or outside the IT field, you may get rejected.
It’s essential to document your business model, contracts, and team expertise clearly when applying.
4. You Must Have Substance in Georgia
This is where many foreign founders trip up. To get approved for International Company Status, you need real business substance in Georgia. That means:
A local office or workspace
At least a few Georgian-based employees or contractors
Active contracts being serviced from Georgia
Expenses, payroll, and invoices that originate in Georgia
Georgia’s tax authorities want to see that your company is more than just a registration. They want activity. If your whole operation is remote and no one in Georgia is doing any work, you’re unlikely to qualify.
However, this doesn’t mean you need a 100-person office. Even a small, agile team working on real client projects is enough, as long as the business is operational and productive inside the country.
Can Foreigners Own the Company?
Absolutely. Georgia places no restrictions on foreign ownership of companies. You can be the sole foreign shareholder, or you can bring in co-founders or investors from abroad. Your team can include Georgian nationals or foreign hires. The structure is flexible.
The important thing is that the entity applying for International Company Status must be registered in Georgia and operate here in a real way. Ownership can be global. Operations must be local.
If your Georgian company is a subsidiary of a larger foreign group, it can still apply as long as the parent company (or multiple controlling shareholders) has the required two years of IT experience.
This setup makes Georgia ideal for tech founders who want to expand internationally without having to move the whole company physically. You can keep your global team, bring some operations to Georgia, and benefit from the tax breaks.
Why International Company Status Is Better Than the Virtual Zone
Many people confuse Georgia’s Virtual Zone status with International Company Status. Both offer tax benefits to IT businesses, but they are not the same.
Virtual Zone is:
Easier to obtain
Doesn’t require employees or local activity
Only applies to software exported from Georgia
Limited in scope and often misunderstood
International Company Status is:
Harder to get
Requires real presence and operations
Covers a wider range of IT services
Offers lower personal income tax and no dividend tax
If you’re running a serious IT business and you want long-term tax efficiency with full compliance, International Company Status is the stronger option. It’s not just about software export. It’s about full-scale business activity rooted in Georgia.
The Virtual Zone is great for freelancers or small teams. The International Company Status is for startups and tech companies that want to grow, hire, and scale without bleeding taxes every step of the way.
What Kind of Startups Can Apply?
Not every startup will qualify, but many will. If you’re in one of these industries, your chances are high:
SaaS platforms with international customers
Product-based startups building IP in Georgia
Fintech, healthtech, and edtech tools with custom software
B2B IT service providers and technical support companies
App developers building mobile or desktop solutions
Gaming startups and interactive media platforms
Cybersecurity firms with a global client base
What matters is that you are building or maintaining technology. If your business model is built around a real product, service, or tool, and you have the team or expertise to deliver it, Georgia likely sees you as a good fit.
How to Apply for International Company Status in Georgia
Getting this status is not automatic. It requires a structured application to the Ministry of Finance. You’ll need to demonstrate that your company meets all criteria, and that means submitting proper documentation.
Step 1: Register Your Company
Before anything else, you need to register your company in Georgia. Most startups choose an LLC. It’s fast, affordable, and can be done remotely with a power of attorney. You’ll need:
A company name
Founders’ and directors’ passport copies
Local registration address
A notarized charter
Once you're registered, you’ll get your company identification number and be ready to move to the next stage.
Step 2: Gather Proof of Experience
You’ll need to submit proof that your company, or its shareholders, has been involved in IT for at least two years. This could include:
Invoices issued to clients
Contracts for software development or IT services
Employee payroll showing IT roles
Company website, portfolio, or GitHub repo
Registration certificates of parent companies
The Ministry will want to see a timeline that proves your company has a real track record in IT. This step is often underestimated but is crucial for approval.
Step 3: Prepare the Application
The application needs to be submitted to the Ministry of Finance. It should include:
A formal letter requesting International Company Status
A detailed description of your services and activities
Explanation of your operational structure in Georgia
Supporting documents (experience proof, company charter, list of employees, etc.)
This letter needs to be clear, honest, and precise. Vague or exaggerated claims usually trigger delays or rejection.
Step 4: Wait for Approval
Once submitted, the Ministry usually takes a few weeks to review your case. If something is unclear, they’ll ask for clarification. If you meet all requirements, approval is straightforward. Once approved, you receive a confirmation letter and can start applying the tax benefits immediately.
What Happens After You're Approved?
Approval is only the beginning. The real benefit comes when you start using the tax regime correctly.
Corporate Tax Drops to 5 Percent
This applies to your net profit. It’s calculated based on Georgian accounting rules. You’ll need a local accountant who understands how to apply these correctly. Trying to DIY this can get messy fast.
Dividends Become Tax-Free for Foreign Shareholders
This is a game-changer. If you’re paying yourself or your investors from overseas, you can do so without additional dividend tax. That means more money stays in your ecosystem.
Payroll Tax Drops to 5 Percent
Instead of paying 20 percent income tax for your employees, you only pay 5 percent. This is a major incentive for companies that hire developers, designers, or support staff inside Georgia. It also helps you compete for talent without overpaying gross salaries.
Property Tax Exemption
If you own computers, servers, or tech equipment used for business purposes, you won’t be taxed on them. This doesn’t apply to land, but still, it’s a solid cost saver.
Mistakes That Can Get You Rejected
Let’s talk risk. Some applications don’t go through. Here’s why:
Submitting Without Experience
If your company has no track record in IT, don’t waste time. You either need to partner with experienced shareholders or wait until you meet the two-year requirement.
Using the Wrong Entity Type
Trying to apply with a foreign branch or an unregistered entity won’t work. You must have a Georgian-registered company.
No Local Activity
This is the biggest reason for rejection. If you’re not paying local salaries, not renting an office, or not generating activity from Georgia, your chances are low.
Weak Documentation
This isn’t the place for vague language. You need to be specific. Show real invoices. Break down your structure. Be honest about your operations. The Ministry wants clarity, not fluff.
Real Example: How One SaaS Founder Made It Work
Let’s say you're an EU-based founder who builds AI tools for HR automation. You have a few clients in the U.S. and Europe. You want to scale, but your home country’s taxes are draining your margins.
Here’s what you do:
You register an LLC in Georgia
You keep your product development team in Tbilisi
Your clients are billed from your Georgian entity
You apply for International Company Status
Once approved, you only pay 5 percent tax on your profits
You reinvest the savings into growth, marketing, or hiring
This setup gives you a legal, tax-efficient structure with low overhead and no legal ambiguity. It works for product companies, agencies, and technical service providers alike.
Is This Better Than Incorporating in Estonia or the UAE?
Estonia is great. So is the UAE. But Georgia’s structure has some standout advantages:
No taxation on foreign-source income if structured right
Low corporate tax on local income
Zero dividend tax to foreign shareholders
Fast setup and affordable maintenance
No minimum capital or complex reporting
You also get access to 58 double taxation treaties, meaning your Georgian income isn’t taxed again in your home country, as long as your structure is done right.
Why Professional Help Is Critical
This isn’t a DIY situation. A badly structured application or misunderstood rule can cost you months and possibly thousands in lost tax benefits. Tax residency. Substance rules. Treaty benefits. These aren’t things to guess at.
That’s where firms like Gegidze make the difference.
We’ve helped dozens of startups navigate the application, prepare the documentation, and build a business presence in Georgia that works. We also handle monthly accounting, payroll, and communication with the Revenue Service.
Book your free consultation with Gegidze today. You focus on your business. We handle the rest.
Frequently Asked Questions (FAQ)
Can foreign companies apply for Georgia’s International Company Status?
Yes. Foreign-owned IT companies can apply if they register an LLC in Georgia, have at least two years of experience in qualified IT services, and operate partially from within Georgia.
What tax benefits come with International Company Status in Georgia?
Qualified companies pay just 5% corporate income tax, 5% payroll tax, and 0% dividend tax for foreign shareholders. Property used in business may also be tax exempt.
What types of IT services are eligible for this tax regime?
Software development, web hosting, database management, digital product design, cybersecurity, and other tech-driven services are eligible, as defined by Georgian law.
How long does the application process usually take?
Most applications are reviewed within 2 to 4 weeks after submission, provided all documents and eligibility conditions are met.
Is it possible to apply remotely as a foreign founder?
Yes. With a power of attorney, the entire process, including company registration and status application, can be done remotely from abroad.
