Closing or Liquidating an Individual Entrepreneur (IE) Status in Georgia: A Step-by-Step Guide
- Tinatin Tolordava
- Nov 17
- 8 min read
Table of contents
Why Closing an IE Properly Actually Matters
What Happens If You Do Not Close Your IE Properly
What You Must Do Before Closing Your IE
How to Close Your IE Step by Step
How Long the IE Closure Takes
What To Do After Your IE Is Officially Closed
Should You Close Your IE or Switch to an LLC Instead
Common Mistakes When Closing an IE
How Gegidze Helps You Close Your IE Smoothly and Safely
Frequently Asked Questions
Why Closing an IE Properly Actually Matters
Registering an Individual Entrepreneur (IE) in Georgia is quick, affordable, and simple. Many foreigners and Georgians open an IE to work as freelancers, consultants, IT specialists, designers, translators, or small service providers. The benefits are clear. Fast registration, easy banking with Bank of Georgia or TBC Bank, and the famous 1 percent Small Business Status.
But closing an IE is not as simple as “stopping work.”If you do not officially terminate your IE through the Revenue Service Georgia and the Public Registry, your obligations continue. You must still file monthly declarations. You must still respond to tax notifications. You still appear as an active taxpayer. And if you ignore your filings, penalties accumulate every month.
People leave Georgia, switch careers, move from IE to LLC, or simply stop working. Many assume their IE “expires.” It does not. It stays active until you officially liquidate it. This is why this guide exists. It explains every step clearly, how to avoid penalties, and how to complete the closure correctly.
Reasons You May Need to Close Your IE
Every entrepreneur has a different reason for shutting down their IE. The most common ones fall into a few categories.
You Are Leaving Georgia Long Term
Your IE stays active even if you are no longer physically in Georgia. If you move back home or relocate to another country and forget to close your IE, you still owe monthly turnover declarations. Even if the declaration is 0 GEL, it must be filed. If you ignore the system for several months, penalties accumulate and your file becomes non compliant.
You Are Switching to an LLC
Many freelancers begin with an IE and eventually move to an LLC in Georgia when their income grows or when clients require corporate invoices. You must close or freeze your IE to avoid double registration. This is especially important when applying for corporate banking, Virtual Zone status, or International Company status.
You Exceeded the 500,000 GEL Income Limit
Small Business Status allows you to earn up to 500,000 GEL per year. If you exceed that limit, your status is revoked. You may decide to move to an LLC structure or reposition your activity. Closing the IE cleans your profile and avoids unnecessary filings.
You Stopped Working
If your freelance work ended, you took a full time job, or you paused your business, you must still file declarations unless you close your IE. It is better to liquidate it and avoid pointless monthly obligations.
You Want to Avoid Penalties
Any IE that misses declarations or keeps Small Business Status active without activity can accumulate penalties. Closing the IE stops these obligations immediately.
What Happens If You Do Not Close Your IE Properly
Ignoring your IE is the fastest way to create avoidable problems.
Monthly Declarations Still Apply
Even if your turnover is zero, you must file every month. Missing filings is a violation in the Revenue Service system.
Penalties Begin to Add Up
The Revenue Service automatically issues penalties when declarations are late. These penalties accumulate every month until you close your IE or file the missing declarations.
Banking Complications
Banks such as Bank of Georgia and TBC Bank perform periodic AML reviews. If your IE is marked as active but your account shows no activity, your account may be flagged for inactivity or inconsistencies.
Residency Risks
If you apply for Georgian tax residency, your IE history is reviewed. Missing declarations or inconsistent activity can create issues with your tax residency application. Authorities rely heavily on Revenue Service filings to confirm proper tax behavior.
Future Registration Issues
If you want to open another IE or an LLC later, past unresolved penalties may block new registrations.
Closing your IE properly prevents all of these problems.
What You Must Do Before Closing Your IE
Most people make the mistake of jumping straight to the closure request. There are important preliminary steps to complete.
Submit All Outstanding Monthly Declarations
If you have missed filings, the Revenue Service system will not allow closure until your declaration history is complete. You must file every missing declaration even if the amount is 0 GEL.
Check for Unpaid Penalties
You should review your Revenue Service account for any unpaid fines. Paying these before closure ensures that no debt remains attached to your taxpayer profile.
Download Your Tax History
Save your declarations, statements, and certificates. These may be needed later for banking, visa applications, or foreign tax authorities.
Notify Your Bank
If your IE income is tied to your bank accounts, inform your bank that your IE is closing. You may need to convert your business account to a personal one or prepare new documents depending on the bank’s compliance process.
Prepare Translations if Needed
Foreign nationals sometimes need certified English to Georgian translation of their passport or supporting documents to complete the closure. This depends on the complexity of their file.
Gegidze handles all translations required by the Revenue Service and Public Registry.
How to Close Your IE Step by Step
Closing your IE requires completing actions with both the Revenue Service and, in some cases, the Public Registry.
Step 1. Log Into Your Revenue Service e Cabinet
Go to rs.ge and access your profile using your mobile number and password. Navigate to the taxpayer menu and locate the section for termination of economic activity.
Step 2. Submit the Request to Stop IE Activity
Inside the system, select the option to cease activity. You will be asked to choose an end date. Once submitted, the Revenue Service begins processing your termination request.
Important. If any declarations or penalties are outstanding, the system may reject your request until those issues are resolved.
Step 3. Contact the Public Registry if Required
Some IE records must also be deregistered from the Public Registry. This depends on the type of activity and how your IE was registered. If required, the Public Registry will ask for:
Passport
IE registration extract
Georgian address
Application form
Gegidze assists with Public Registry submissions and ensures the documents are translated if needed.
Step 4. Cancel Your Small Business Status
Closing the IE does not always automatically cancel your Small Business Status. That status must be removed separately. If you forget this step, the system may still expect monthly filings.
Step 5. Wait for Confirmation
Once processing is complete, the Revenue Service updates your file to show that your IE is officially closed. After this date, no additional declarations are required.
How Long the IE Closure Takes
For most people, closing an IE takes between 1 and 5 business days.It may take longer if:
You have outstanding penalties
You have missing declarations
You are a foreign national
Your documents require English to Georgian translation
The Public Registry requires additional verification
What To Do After Your IE Is Officially Closed
Once your IE is terminated in the Revenue Service Georgia system, a few follow-up steps help keep your records clean and your future registrations problem free.
Submit a Final Declaration if Required
Depending on your closure date, the Revenue Service system may prompt you to file a last declaration for the period covering the final month of activity. Even if it is 0 GEL, submit it to ensure your record is complete.
Archive Your Documents
Download and save:
All tax declarations
Your IE registration extract
Proof of closure from Revenue Service Georgia
Bank statements tied to your IE activity
Contracts and invoices related to your IE period
Any English to Georgian translations used during registration or closure
These documents may be needed later if you apply for Georgian tax residency, open a new business, respond to a foreign tax inquiry, or require tax history for immigration purposes.
Inform Your Clients and Update Invoicing
If you are transitioning to an LLC or another business structure, inform your clients that your IE is closed and provide new invoicing details. This prevents confusion when payments arrive at Bank of Georgia or TBC Bank.
Monitor Email for Revenue Service Notices
Even after closure, you should monitor official messages from the Revenue Service. Occasionally, they may issue a final confirmation, ask for a supporting document, or send a system notification that you must acknowledge.
Should You Close Your IE or Switch to an LLC Instead
Before closing your IE, it is worth evaluating whether switching to an LLC in Georgia is the better option. Many entrepreneurs close their IE because their activity or income no longer fits the Small Business Status model.
LLC structures offer several advantages, especially if your business is growing or becoming more complex.
When Switching to an LLC Makes More Sense
You should consider transitioning instead of closing if:
Your income is close to or above 500,000 GEL per year
You work with corporate clients who require invoices from a legal entity
You want to hire employees or contractors
You plan to apply for Virtual Zone or International Company status
You want to protect your personal liability
You want a more scalable business structure
An LLC requires regular accounting and corporate filings, but it unlocks new tax benefits such as the Estonian style 15 percent tax on distributed profits and potential 0 percent corporate tax under the Virtual Zone regime.
Documents Needed for LLC Transition
If you close your IE and move to an LLC, be prepared for:
Passport
Georgian address
Articles of incorporation
English to Georgian translation of corporate documents
Initial charter and shareholder information
Bank forms for corporate accounts
Gegidze handles the entire IE to LLC transition, including banking and Revenue Service registration.
Common Mistakes When Closing an IE
Many people close their IE without understanding the administrative requirements. These mistakes create unnecessary penalties, compliance issues, and delays in future registrations.
Forgetting to File All Declarations Before Closure
The biggest problem foreign entrepreneurs face is closing the IE in theory but leaving months of declarations unfiled. This automatically generates penalties, which remain attached to your taxpayer ID even after closure.
Canceling the IE but Not Canceling Small Business Status
Small Business Status is a separate designation. You must cancel it manually. If it remains active, the Revenue Service system may still expect declarations from you.
Not Checking for Outstanding Penalties
Unpaid fines remain linked to your tax ID and may block future registrations. Always clear your balance before closure.
Not Saving Your Tax Documentation
Many people think they will never need their IE tax history again. Later, when applying for residency, dealing with foreign tax authorities, or opening an LLC, they find themselves missing essential records. Always save your files.
Not Closing Related Bank Accounts
If you opened business accounts at Bank of Georgia, TBC Bank, or Liberty Bank, you must close or convert them after liquidating your IE. Bank accounts tied to an inactive IE can cause AML confusion during compliance reviews.
Attempting to Close an IE With an Incorrect Tax Profile
Some people try to close their IE while their activity history is incomplete or incorrectly reported. This triggers Revenue Service checks and delays the closure process. Ensure your file is clean before requesting termination.
How Gegidze Helps You Close Your IE Smoothly and Safely
Closing an IE should be easy, but most foreigners discover unexpected complications. Missing declarations. Confusing Revenue Service menus. Old penalties. Public Registry inconsistencies. Or documents that need certified English to Georgian translation before submission.
Gegidze handles all of this professionally and quickly.
Our service includes:
Reviewing your Revenue Service profile
Filing all outstanding monthly declarations
Correcting declaration errors
Checking and settling penalties
Canceling your Small Business Status
Submitting the IE closure request
Handling Public Registry removal if required
Translating and notarizing documents
Coordinating with Bank of Georgia or TBC Bank for account updates
Providing full guidance on whether to close or transition to an LLC
This keeps your tax profile clean and protects you from future problems.
Frequently Asked Questions
Do I still need to file declarations after I close my IE?No. After the Revenue Service confirms your IE termination, your monthly filing obligation ends. You may need to submit a final declaration depending on the closure date, but you will not file declarations for periods after the official closure.
What happens to penalties that existed before closure?Penalties do not disappear. They remain attached to your taxpayer ID until paid. This is why you should review your Revenue Service account and clear fines before closing your IE.
Can I reopen an IE later after closing it?Yes. You can open a new IE at any time. However, unresolved penalties or incomplete filings from your previous IE may delay new registrations. Gegidze helps clean up your file so future registrations are smooth.
