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Guide to Taxes in Georgia 2024: Income, Corporate, VAT, and More

Corporate Income Tax Georgia 2024


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Taxes can be a major concern for any business owner. However, Georgia aims to alleviate this burden with a tax system that emphasizes simplicity and actively attracts foreign businesses. Georgia boasts some of the lowest tax rates globally, making it a prime destination for enterprises looking to optimize their taxes


This guide from Gegidze will break down the details of the Georgian tax landscape step by step.



Guide to Georgian Tax Rates


Corporate income tax in country georgia


Corporate Income TAX (CIT)


A tax charged on the profits earned by corporations, limited liability companies (LLCs), and other similar business entities.


One of the Lowest Corporate Income TAX Rates (Profit Tax) in Georgia


  • Competitive Rate: Georgia offers one of the most competitive CIT rates globally at 15% for both resident and non-resident enterprises.

  • Deferred Taxation: For LLCs and other legal entities, CIT is triggered only upon profit distribution, meaning profits reinvested within the company remain untaxed.

  • Special Rate for Financial Institutions: Banks, microfinance organizations, and similar institutions are subject to a 20% CIT rate.


What Events Initiate Corporate Income Tax (CIT) Payments?


Georgia's unique system taxes profits based on their use rather than immediately upon earning. CIT is typically activated in the following scenarios:


  • Profit Distributions: Dividends paid out to shareholders are subject to CIT.

  • Non-Business Expenditures: Using funds for non-business purposes can trigger CIT.

  • Gratuitous Transfers: Free products or services and unexplained inventory shortages are treated as profit distributions.

  • Excessive Spending: Spending beyond allowable limits on representative expenses, such as client entertainment, can result in CIT on the excess amount.


Applicability of CIT


Resident Companies


Companies headquartered in Georgia are taxed on their worldwide income. If your business is based in Georgia, you are liable for CIT on all your income, including international earnings.


Example: A Tbilisi-based software startup with clients in Europe will pay Georgian CIT on its entire income, including international earnings.


Non-Resident Companies


Companies operating outside of Georgia but generating income within the country (and possessing a physical presence like an office or branch) are taxed solely on their Georgia-sourced income.


Example: A UK company with a manufacturing branch in Batumi will pay CIT only on the profits generated by that Batumi operation.


What are Special Tax Statuses in Georgia?


  • Virtual Zone Companies: Companies operating within designated "Virtual Zones" enjoy a 0% CIT rate. It applies mainly to specific IT-related activities.

  • Free Industrial Zones (FIZ): Businesses established within a FIZ are also exempt from CIT, they are tax-free in Georgia. (0%).

  • International Company Status: Companies holding this status benefit from a reduced 5% CIT rate upon profit distribution.


Personal Income Tax


The standard rate is 20%. Business owners have flexibility in how they compensate themselves, potentially reducing personal income tax by taking dividends instead of salaries.


Value Added Tax (VAT)


  • Standard VAT Rate: The standard rate is 18%. VAT registration is mandatory if your VATable turnover exceeds 100,000 GEL within 12 months.

  • Strategic Registration: Some businesses might benefit from voluntary VAT registration, which can involve potential refunds but also adds complexity.

  • Exemptions: Certain activities are exempt from VAT, which can provide both benefits and limitations depending on your business.


Filing Declarations and Tax Payments


Monthly Filings: Due on the 15th of each month.


  • Personal Income Tax: Covers the amount withheld from employee salaries.

  • Corporate Income Tax: Pertains to dividends. Even if no dividends are paid, a zero declaration might be required.

  • VAT: File your VAT declaration and ensure payment by the deadline if registered.


How to File & Pay: Use the Georgian Revenue Service portal (www.rs.ge). Secure access using your Georgian phone number for SMS authentication. Payments must originate from a Georgian bank account.


Navigating Legal Requirements


  • Articles of Organization: This foundational document includes your unique company name, description of activities, business structure, owner information, and official Georgian address.

  • Business Licensing and Permits: Some sectors require specific licenses or permits for lawful operation, especially in fields like healthcare, finance, construction, and energy.

  • Special Business Statuses: Georgia offers special statuses like "Virtual Zone Entity" and "Free Industrial Zone Enterprise," which provide substantial tax benefits or other advantages upon application and qualification.


Why Partner With Gegidze for Your Georgian Business Journey


  • Nationwide Expertise: Gegidze’s network of professionals spans all of Georgia, offering comprehensive knowledge and specialized advisors for your operational needs.

  • Clear Communication: We prioritize effective communication in your preferred language to minimize misunderstandings and empower you with the clarity needed to make informed decisions.

  • Commitment to Your Success: We see registration as the starting point, not the endpoint. Our team actively monitors market trends, tax updates, and emerging opportunities to help your Georgian venture thrive.

  • Your Priorities at the Forefront: We are dedicated to helping you achieve your business objectives in Georgia. Consider us your trusted counsel, committed to your prosperity.


Let's get practical


Let's delve into some practical scenarios to illustrate how the Georgian tax system works:


  • Company A (Resident): Suppose this Georgian-based company decides to distribute 20% of its profits as dividends. That portion would be subject to the standard 15% Corporate Income Tax (CIT) rate.

  • Company B (Non-Resident): If this company incurs expenses not directly linked to its business operations in Georgia, those costs would be liable for the 15% CIT rate.


Aspect

Detail

General Tax Rate

15%

For Financial Institutions

20%

Resident Companies

Taxed on worldwide income

Non-Resident Companies

Taxed on income generated within Georgia

CIT Triggers

Profit Distributions, Non-Business Expenses, Free Products/Services, Excessive Representative Expenses


Special Tax Incentives

Virtual Zone Companies

0% CIT rate for companies operating within designated "Virtual Zones"

Free Industrial Zones (FIZ)

0% CIT rate for businesses established within Free Industrial Zones (FIZ)

International Company Status

Reduced 5% CIT rate upon profit distribution for companies with International Company Status


Withholding Corporate Taxes in Georgia


When non-residents earn specific types of income from sources within Georgia, the country withholds a portion as an upfront tax payment. Here’s a breakdown of the key areas:


Dividends


  • Standard Rate: Dividends paid to non-resident entities are typically subject to a 5% withholding tax.

  • Tax Treaties: This rate might be reduced if Georgia has a double taxation treaty with the entity's home country.


Interest


  • Standard Rate: Interest income earned by non-residents from Georgian sources is also subject to a 5% withholding tax.

  • Tax Treaties: Similar to dividends, this rate may be lowered if a tax treaty applies.


Royalties


  • Standard Rate: Royalties paid to non-residents for the use of property or rights in Georgia are taxed at a withholding rate of 5%.

  • Tax Treaties: Tax treaties can potentially provide for a reduced rate.


Other Withholding Taxes


Georgia also imposes specific withholding tax rates on other types of payments to non-residents:


  • Oil and Gas Subcontractor Income: Generally 4%

  • Income from International Transportation/Communication: Generally 10%

  • Income from Services Rendered in Georgia: 10%

  • Payments to Entities in 'Blacklisted' Countries: 15%



Why Is Georgia The Best Destination For Foreign Businesses?


Georgia has become a prime destination for entrepreneurs and businesses worldwide, offering a welcoming tax regime, a supportive business environment, and a strategically advantageous location. Here’s why Georgia should be your next business expansion:


  • Tax Simplicity: Georgia boasts one of the most straightforward tax structures in the region. Its flat corporate income tax rate and zero tax on reinvested profits mean you keep more of what you earn.

  • Ease of Doing Business: Georgia consistently ranks high in international "ease of doing business" indices, reflecting its streamlined regulations and minimal red tape when establishing and running a company.

  • Open Economy: Enjoy unhindered access to growing regional markets and trade agreements with global economic powers, facilitating the movement of goods and services.

  • Strategic Hub: Georgia's location between Europe and Asia makes it an ideal base for businesses targeting diverse markets across these major continents.



United Kingdom (UK) Businesses Invested 392 Million Dollars In Georgia In 2023


United Kingdom UK businesses invested in Georgia


Source: geostat.ge


Recent data highlights the United Kingdom as the leading contributor of foreign direct investment (FDI) into Georgia in 2023. The UK's significant investment underscores Georgia's potential for vibrant partnerships and innovative growth within its business ecosystem.


Following the UK, other top contributors to Georgia's economic development include the Netherlands, Turkey, the United States, Russia, Malta, Azerbaijan, China, Japan, and Kazakhstan.


International Interest and Investment


The diverse roster of top investors from Europe, Asia, and North America underscores the burgeoning international interest in Georgia's business landscape. This wide-ranging investment from global players propels Georgia’s economic growth and solidifies its position as a hub for international business.


Join the Global Business Community in Georgia


Embrace the opportunity to expand your business in Georgia. With a favorable tax environment, ease of operations, strategic location, and robust international investment, Georgia offers a unique platform for your business to thrive. Partner with Gegidze to navigate this promising landscape and unlock the full potential of your enterprise in Georgia.


Foreign direct investment by the economic sector



Foreign direct investment by the economic sector


Source: geostat.ge


A detailed analysis of foreign direct investment (FDI) flows into Georgia reveals their concentration in specific economic sectors. Understanding this distribution highlights Georgia's strengths and the industries that international investors view as having the greatest potential for lucrative returns.


Foreign Direct Investments in Georgia (2020-2023)


Georgia's position in the global investment landscape is rapidly evolving. The nation is witnessing a significant surge in foreign direct investment, reflecting a growing international recognition of Georgia's economic potential and business-friendly environment. Here's a closer look at the key sectors attracting FDI:


Key Sectors Attracting Foreign Investment


  • Energy Sector: Georgia's energy sector is a major magnet for FDI. With abundant natural resources and a strategic location for energy transit, investors see substantial opportunities in this field.

  • Real Estate and Construction: The booming real estate and construction sectors in Georgia offer promising returns, driven by increasing demand for residential and commercial properties.

  • Financial Services: Georgia's robust financial services sector, characterized by a stable banking system and favorable regulatory framework, attracts significant foreign investment.

  • Manufacturing: With its competitive labor costs and strategic location, Georgia's manufacturing sector is a hotspot for investors looking to capitalize on efficient production and export opportunities.

  • Tourism and Hospitality: The scenic beauty and cultural richness of Georgia have led to a thriving tourism industry, drawing substantial investment in hospitality and related services.


Foreign Direct Investments in Georgia (2020-2023)


Georgia's position on the global investment stage is rapidly transforming. The country is experiencing a significant surge in foreign direct investment (FDI), signaling growing international recognition of Georgia's economic potential and its favorable business environment.


This upward trajectory of FDI reflects the global business community's increasing confidence in Georgia as a prime destination for investment. Here’s why:


  • Robust Economic Growth: Georgia's stable and growing economy is attracting investors looking for reliable returns.

  • Strategic Location: Positioned at the crossroads of Europe and Asia, Georgia offers strategic advantages for trade and logistics.

  • Pro-Business Policies: Georgia's government has implemented a range of business-friendly policies that make it easier for foreign companies to invest and operate.


Million USD.

Year

2020

2021

2022

2023*

Total

595.3

1 252.7

2 097.9

1 594.7

Q I

175.8

145.6

577.9

566.4

Q II

247.4

320.6

389.2

505.7

Q III

295.8

376.1

820.3

316.0

Q IV

-123.7

410.4

310.5

206.5


Source: Geostat.ge



Personal Income Tax (PIT)



Personal Income Tax in Georgia


What Are the Income Tax Rates in the Country of Georgia?


Georgia's income tax system aims for a balance of fairness and growth. Individuals face a flat 20% rate, while businesses benefit from special breaks designed to help them flourish.  Small and micro businesses could see income tax rates as low as 1% or 3%.


  • Rental Income: If you earn money renting out residential property in Georgia, you'll face a simple 5% tax rate.

  • Property and Vehicle Sales: Selling a house, apartment, or vehicle in Georgia? The proceeds are generally taxed at a 5% rate, but specific exemptions might apply.

  • Capital Gains (Foreign Investments): Selling stocks, bonds, or other non-Georgian securities usually results in a 0% tax on your gains. (Always consult a tax professional for complex situations.)

  • Cryptocurrency Gains: Currently, cryptocurrency gains in Georgia are taxed at 0%. This reflects the evolving legal status of crypto in the country.

  • Foreign Dividends: If you're a passive shareholder receiving dividends from foreign companies, you typically won't pay any Georgian tax on them (0%). However, managing a foreign company from Georgia can complicate the situation.


Category

Tax Rate

Standard PIT

20%

Small Business (Turnover up to 500,000 GEL)

1%

Small Business (Turnover above 500,000 GEL)

3%

Micro Business

0%

Rental Income

5%

Sale of Property/Vehicles

5%

Capital Gains on Foreign Investments

0%*

Cryptocurrency Gains

0%

Foreign Dividends

0%**


Lowest Taxes for Local and International Startups & Small Businesses in Georgia


Georgia understands the crucial role small and medium-sized enterprises (SMEs) play in driving economic growth and creating employment opportunities. To support these engines of innovation, Georgia has designed a tax system that actively encourages entrepreneurship. This approach benefits both local startups and international businesses looking to establish a presence in the country.


In Georgia, taxes are structured to facilitate, not hinder, your growth. The focus is on competitive rates and smart incentives, including special tax breaks specifically tailored for small and medium-sized businesses.


Payroll management is also streamlined in Georgia. The system is designed for simplicity, featuring straightforward income tax withholding and reasonable pension contribution requirements.



Filing your Georgian tax return



Filling your Georgia tax return


  • Step 1: Determine Your Filing Status

    • Are you a resident, non-resident, or do you have specific income categories that necessitate reporting? Understanding your filing status is crucial for accurate tax reporting.

  • Step 2: Be Aware of Deadlines

    • Check the Georgian tax authorities' website for the most up-to-date information on annual and capital gains filing deadlines to ensure timely submissions.

  • Step 3: Organize Your Records

    • Gather all necessary documentation for income, deductions, and any relevant transactions. Proper organization will streamline the filing process.

  • Step 4: Prepare & Submit Your Return

    • Use the official forms and follow the instructions provided by the Georgian tax authorities. Accurate completion and submission of these forms are vital for compliance.

  • Step 5: Make Payments

    • Pay any estimated amounts (if applicable) and the final tax due by the stipulated deadlines to avoid penalties and interest.



Value-Added Tax (VAT) in Georgia



Value-Added Tax (VAT) in Georgia


Value-Added Tax (VAT) is a consumption tax levied at each stage of the supply chain for most goods and services sold within Georgia. Understanding VAT is crucial for businesses operating in or with Georgia, as it can significantly impact your financial operations and compliance.


Key Points About VAT in Georgia


  • Standard Rate: Georgia's VAT rate is currently 18%.

  • What's Taxed: VAT generally applies to anything sold in Georgia as part of a business activity. However, there are specific exemptions.

  • Location Matters: Where goods are located, and where a service is provided or received, are crucial factors for determining what's taxed. There are special rules for businesses operating across borders.

  • Registration: If your business's turnover (sales) exceeds 100,000 Georgian lari in 12 months, you're generally required to register as a VAT payer. However, you can apply for a VAT payer registration right after starting the business operations.

  • When VAT Applies: Typically, VAT becomes due when you supply goods or services. It also applies to advance payments you receive.


Exemptions and Special Cases


  • Exempt Supplies: Certain goods and services, such as specific financial or medical products, might be exempt from VAT.

  • Reverse-Charge VAT: If you are a Georgian VAT payer procuring services from a non-resident entity, you may be responsible for paying the VAT.

  • Digital Services: Businesses based outside Georgia, but providing digital services to Georgian consumers, are likely required to register and adhere to Georgian VAT regulations.


VAT Implications for Digital Businesses


If you offer digital services to Georgian consumers without a physical establishment in Georgia, you could face VAT obligations. These regulations are relatively recent, so staying informed is paramount.


Here's What Triggers VAT:


  • Payments for your services are processed through a Georgian financial institution.

  • The consumer is located in Georgia.

  • The purchase is made using a device with a Georgian IP address.

  • The purchase involves a phone number with a Georgian country code.an country code.


Important Deadlines to Remember


  • Reporting: Quarterly VAT reports are typically due by the 20th of the month following the reporting period.

  • Payment: VAT payments are generally due by the end of the month following the reporting period.


Aspect

Details

Standard Rate

18%

Taxable Transactions

Most goods and services sold within Georgia

Registration Threshold

Turnover exceeding 100,000 GEL (12-month period)

When VAT is Due

Upon supplying goods/services, also on advance payments

Exemptions

This may apply to specific financial, medical, or other items

Reverse-Charge

This may apply to services received from non-residents

Digital Services

Non-Georgian providers may have VAT obligations

Reporting & Payment

Quarterly reports, payments due monthly



Property Tax Rates and Rental Income in Georgia


Property tax rates and rental Income in Georgia


Georgia presents a surprisingly cost-effective and straightforward landscape for foreign real estate investors, with minimal property tax rates and other fees, making it an attractive destination to grow your investment portfolio. Let's delve into the financial aspects:


  • Acquisition Costs:

    • Stamp Duty/Purchase Taxes: Nonexistent.

    • Other Costs: Minimal. Property registration typically costs a mere 50-200 GEL ($20-80 USD).

  • Annual Property Tax:

    • Variability: Rates differ across municipalities, with a maximum cap of 1% of the property's assessed value.

    • Income-Based Exemptions: Households earning below GEL 40,000 are exempt. For incomes ranging from GEL 40,000 to GEL 100,000, rates vary between 0.05% and 0.2%. Above GEL 100,000, rates fall within the 0.8% to 1% range.

  • Capital Gains Tax (CGT):

    • Short-Term Holding: A 5% tax on profits applies if the property is sold within two years of acquisition.

    • Long-Term Holding: No tax liability if held beyond two years. For off-plan properties, official ownership commences upon registration.

  • Rental Income Tax:

    • Standard vs. Reduced Rate: The standard rate is 20%. However, registered landlords enjoy a significantly reduced rate of 5% on residential rentals.

    • Unregistered Landlords: While still subject to the 20% rate, they can deduct expenses.

    • No Property Limit: The reduced tax rate applies regardless of the number of properties owned.


Cost Type

Details

Stamp Duty

None

Registration Fees

₾50-200 GEL ($20-80 USD)

Annual Property Tax

0.05% to 1% of appraised value, with exemptions

Capital Gains Tax (CGT)

5% if sold within 2 years, none after 2 years

Rental Income Tax

5% for registered landlords, 20% for unregistered (deductible expenses)


Import Taxes in Georgia


Georgia's import taxes generally fall into three tiers: 0%, 5%, or 12%. The precise rate depends on the specific goods imported. You can determine the correct rate by using the product's classification code or by searching for its Georgian name on relevant customs resources.


Certain products may necessitate additional permits for importation. These permits typically cost 30 GEL to obtain. Import taxes are usually due within five days of your goods arriving at customs, although a different timeframe may be provided at the time of importation.


An additional 18% VAT may apply to imported goods. This is payable at the time of importation, regardless of whether the recipient is a VAT-registered business.


However, exemptions exist:


  • Imports from select countries, including those within the EU, may be exempt from import tax, though VAT might still apply.

  • Small shipments valued under 300 GEL are fully exempt from both import tax and VAT.



Crypto TAX in Georgia


Georgia's crypto-friendly tax system makes it an attractive jurisdiction for cryptocurrency holders. Individual tax residents generally enjoy a 0% tax rate on crypto trading profits, thanks to Georgia's territorial taxation and the classification of crypto as non-Georgian sourced income. The country also offers convenient liquidation of Bitcoin and other cryptocurrencies into fiat currency, with some providers even facilitating direct exchange with commercial banks.


Important Notes


  • Ownership and Trading: Holding and trading crypto is legal in Georgia. Currently, individual traders generally face a 0% tax rate on gains.

  • Crypto Mining Hub: Georgia's affordable hydroelectric power and minimal regulation have made it a sought-after location for crypto mining operations.

  • Legal Tender Status: While the Georgian Lari (GEL) is the sole official currency, USD, GBP, and EUR accounts are readily accessible at local banks. You can even withdraw USD from ATMs.

  • Barter Potential: Although not legal tender, the current lack of stringent regulation allows crypto to be used in barter-like exchanges (e.g., purchasing property). However, new regulations could emerge in the future.


Important Considerations:


  • Businesses: Crypto profits generated within a Georgian-registered business entity may be subject to corporate income tax and dividend tax upon distribution.

  • Small Business Status (SBS): Trading crypto while holding SBS can be complex. While generally taxed at 0%, future regulations could alter this scenario.

  • Tax Residency: To benefit from these tax advantages, you typically need Georgian tax residency, achievable by either residing in Georgia for 183+ days per year or through the High Net Worth Individual program.

  • Exiting Previous Tax Systems: Becoming a Georgian tax resident might not immediately absolve you of tax obligations to your previous country. Formal processes, and in some cases like the USA, citizenship renunciation, may be required.


Crypto Regulations in the Country of Georgia


Georgia, previously known for its minimal cryptocurrency regulation, has recently implemented new rules to bolster security and compliance.


Key Changes:


  • Definition and Licensing: The law now defines "virtual assets" (encompassing cryptocurrencies) and mandates that Virtual Asset Service Providers (VASPs) register with Georgia's National Bank.

  • Accountability: VASPs must implement measures to identify customers, monitor transactions, and prevent illicit activities.

  • Traceability: VASPs are obligated to share specific information when transferring crypto, enhancing the ability to track suspicious transactions.

Who is Affected?

  • Cryptocurrency exchanges (crypto-to-crypto, crypto-to-fiat, crypto-to-financial instruments)

  • Crypto asset transfer, storage, or custodial services

  • Cryptocurrency portfolio management services

  • Cryptocurrency trading platform operation

  • Cryptocurrency lending platforms

  • Initial Coin Offering (ICO) facilitation

Who is Not Affected?

  • Individual Users: For now, individual miners and casual traders remain largely unaffected.



How to open an LLC in country Georgia?


Georgia's impressive 7th-place ranking in the World Bank's ease of doing business index makes it an attractive hub for entrepreneurs. Its business-friendly approach and favorable tax structure further enhance its appeal. Establishing a Limited Liability Company (LLC) in Georgia offers distinct advantages, including safeguarding personal assets and flexible profit distribution. Let's navigate the process, tax implications, and key considerations for foreigners venturing into the Georgian market with an LLC. Learn how to how to register company in Georgia.


Understanding Georgian LLCs: Your Business, Your Shield


  • Liability Protection for Owners: Unlike sole proprietorships, an LLC creates a legal separation between your business debts and your personal assets, minimizing your financial risk if the company encounters challenges.

  • Minimal Upfront Costs: Georgia does not impose a minimum capital investment requirement for starting an LLC, easing the initial financial burden.

  • Flexible Ownership: LLCs can be owned by one or more individuals or entities, with no residency requirement for directors, offering flexibility for international entrepreneurs.

  • Global Workforce: Build your team with talent from within Georgia or across the globe, leveraging the best skills for your business.

  • Tax Advantages: Profits retained within the company are not subject to immediate corporate income tax. Distributions are taxed at a later stage, often at a competitive rate.

  • Caveat: LLCs generally do not qualify for the simplified "Small Business Status" tax regime, which offers a reduced tax rate of 1% on turnover.



Banking in Country Georgia: A Guide for Expatriates & Locals


Georgia caters to the needs of modern businesses by offering convenient banking solutions. In many cases, you can open a business bank account online online without the need to be physically present in the country. Learn how to open bank account in Georgia remotely.


Top Georgian Banks


The Bank of Georgia and TBC, the leading banks in Georgia, provide a comprehensive suite of banking services, with minimal differentiation in terms of products, customer service, and nationwide reach. Both institutions offer a user-friendly account opening process accessible to local and international clients alike. Learn more about Georgian banks.


Bank of Georgia & Solo


The Bank of Georgia enjoys a widespread presence, offering a multitude of banking products, including diverse card services under the Mastercard, Visa, and American Express brands. Their "Solo" premium service caters to high-net-worth individuals, providing enhanced banking features, personalized attention, and access to luxury benefits like VIP lounge access at airports worldwide.


TBC & TBC Concept


TBC mirrors the Bank of Georgia in its comprehensive service portfolio, including the innovative "TBC Subscription" card program and the "TBC Concept" for premium customers, offering tailored banking solutions and luxury perks akin to those provided by the Bank of Georgia's Solo service.


Alternative Banking Options in Georgia


Beyond the two giants, Georgia's banking sector features several institutions catering to specific needs:


  • Liberty Bank: The third-largest bank, recognized for its extensive branch network and government payroll services.

  • ProCredit Bank: Specializes in serving small and medium-sized enterprises (SMEs) with a range of business account options.

  • Basis Bank: Appeals to those with connections to China, offering Visa, Mastercard, and UnionPay card options.

  • Cartu Bank: Founded by Georgian billionaire Bidzina Ivanishvili, Cartu Bank targets the elite with high-end financial services and exclusive card offerings.

  • Ziraat Bank Georgia: Facilitates transactions with Turkey, offering accounts in Turkish Lira and a user-friendly internet banking platform.

  • Tera Bank: Partially owned by The Dhabi Group, with a focus on retail banking and a variety of card options.


Key TAX Facts


Tax Category

Rate

Details

Retained Profits

0%

Corporate Income Tax: Earnings kept within the company or reinvested are not taxed.

Profit Distribution

15%

Corporate Income Tax: Taxed at the time profits are distributed to shareholders.

Dividend Tax

5%

Personal Dividend Tax: This applies to individuals receiving distributions. Exemptions may apply for distributions to Georgian companies.

Employee Salaries

20%

Income Tax: Withheld by the LLC from employee paychecks.

Employee Pension Contributions

2% + 2%

Additional contribution (on salary fund and gross salary, respectively) for Georgian residents or citizens.

VAT

18%

Applies to businesses with taxable turnover exceeding 100,000 GEL in 12 months.


The Registration Process


Georgia's high ranking as the 7th easiest country to do business in, according to the World Bank, underscores its streamlined processes. Setting up your LLC can be accomplished either in person at a Georgian Justice Hall or remotely through a Power of Attorney (POA).


Essentials for LLC Formation


  • Business Activity: Clearly define your company's primary activities.

  • Company Charter/Founders Agreement: A bilingual document (Georgian and a language understood by the directors) outlining the company's structure, management bodies, their responsibilities, and other crucial details regarding company management.

  • Owners' Passports: Identification for all directors is mandatory.

  • Georgian Address: An owned (not rented) property address is required for registration purposes. The property owner must be present or represented via POA.

  • Georgian Phone Number and Email: Essential for contact and official communication.


Important Note: Opening a Georgian bank account for your LLC while abroad can be challenging due to increasing bank caution. If you don't require a Georgian bank account, services like Wise.com offer viable alternatives.



Timeframe & Fees


  • Expedited Registration: Achievable in under 6 hours with express service (additional fee applies).

  • Standard Registration: Typically takes 24-36 hours.

  • Tax Registration: Must be completed separately after LLC registration.

  • Ongoing Costs: No annual fees, but monthly accounting is mandatory, even in the absence of business activity.



Is Georgia An Easy Country to Migrate To?


Yes! Georgia welcomes foreigners with streamlined residency procedures, making it an attractive destination for individuals and businesses alike.


  • Visa-Free Travel (for Many): 

    • Citizens of 95 countries can enjoy Georgia's rich culture and business opportunities for up to a year without a special visa. This is ideal for digital nomads or those exploring a longer-term relocation.

  • Investment Residency: Flexibility for Growth

    • Direct Real Estate Investment: Invest a minimum of USD 300,000 in Georgian real estate. This path is perfect if you're interested in the Georgian property market.

    • Investment through a Georgian Company: Invest a minimum of USD 300,000 through a Georgian company, subject to specific annual turnover requirements. This option offers greater business flexibility.

  • Work Residence Permit: Build Your Career in Georgia

    • Employment Contract: Secure a minimum 6-month employment contract within Georgia (for LLCs or Individual Entrepreneur positions).

    • Financial Self-Sufficiency: Demonstrate the ability to support yourself financially during your stay.

    • Permit Duration: Initial permits are valid for 6-12 months, with potential extensions up to 11 years, making this an excellent choice for those committed to long-term establishment in Georgia.



High Net Worth Individual (HNWI) Residency


  • There are two primary pathways to qualify as an HNWI:

    • Asset-Based: Prove ownership of assets exceeding three million Georgian Lari (approximately $1,075,000). Various asset types are accepted (real estate, stocks, etc.). Valuation reports might be required.

    • Income-Based: Demonstrate income exceeding 200,000 GEL (approximately $71,500) in each of the last three years. The income source can be global.


  • Important Note: HNWI status alone doesn't confer tax residency; fulfilling the additional requirement is crucial. Meeting one of the four combinations (asset+permit, asset+income, etc.) is sufficient.



Procedures for Relocating to Georgia



Procedures for relocating to Georgia


Georgia Tax Residency and Residency Requirements for Tax Purposes


Georgia's tax system offers enticing benefits for foreigners, including a territorial approach where income earned outside of Georgia is generally not taxed. However, understanding the nuances of "foreign-sourced" income is crucial.


It's important to distinguish between two types of residency in Georgia:


  • Legal Residency: Grants the right to live and work in Georgia.

  • Tax Residency: Determines your tax liability.


You can have one without the other or both. To leverage the tax advantages Georgia offers, you typically need to be a Georgian tax resident.



How to Get Tax Residency in Georgia?



How to get tax residency in Georgia


The 183-Day Rule


If you physically spend at least 183 days (approximately half the year) within Georgia during any consecutive 12-month period, you automatically qualify as a tax resident. There's no complex application process or excessive paperwork. Once you meet the time requirement, you'll enjoy the tax benefits for that entire year.


Note: You don't need to stay for the entire 183 days consecutively. You can spread your time across multiple visits throughout the year.



High Net Worth Individual (HNWI) Program


To qualify for the HNWI program, you must meet the wealth threshold:


  • Asset-Based: Own assets exceeding 3,000,000 Georgian Lari (approximately $1,300,000).

  • Income-Based: Have an annual income surpassing 200,000 GEL (approximately $77,000) for each of the past three years.


Additionally, you must fulfill one of the following:


  • Legal Residency or Citizenship: Hold Georgian legal residency or citizenship.

  • Georgian Source Income: Demonstrate an annual income of at least 25,000 GEL (approximately $7,500) from a Georgian source.


Benefits of Georgian Tax Residency


  • Competitive Tax Rates: Georgia boasts some of the lowest personal and business tax rates globally.

  • Double Taxation Agreements: Georgia has agreements with over 55 countries, potentially shielding you from double taxation on the same income.

  • Foreign Income Advantage: The territorial system often exempts foreign-sourced income from taxation, but it's vital to understand the specific rules.

  • Banking Access: Tax residency can simplify the process of opening and managing Georgian bank accounts.


Why Choose Georgia for Your Tax Residency?


  • Strategic Location: Situated at the crossroads of Europe and Asia, Georgia offers strategic advantages for business operations and travel.

  • Business-Friendly Environment: Georgia consistently ranks high in ease of doing business indices, reflecting its streamlined regulations and supportive policies for entrepreneurs and investors.

  • Quality of Life: With its rich culture, beautiful landscapes, and affordable living costs, Georgia provides an attractive environment for both personal and professional growth.



Discovering Georgia: Location, Residency, and Lifestyle


Georgia occupies a unique position at the crossroads of Eastern Europe and Western Asia. Bordered by the Black Sea, Azerbaijan, Armenia, and Turkey, its strategic location has shaped its history and made it a hub for trade and cultural exchange. Georgia's diverse terrain, from the Caucasus Mountains to its coastline, offers a wide array of experiences for residents and visitors.


Why Georgia Beckons:


  • Hospitality: Georgians are renowned for their warm hospitality. You'll likely find yourself invited to feasts, immersed in traditions, and embraced by the community.

  • Affordability: Daily life in Georgia is remarkably affordable compared to many European countries.

  • Culinary Delights: Explore fresh flavors, unique spices, and, of course, Georgia's celebrated wines.

  • Natural Beauty: From pristine beaches to majestic mountains, Georgia offers endless opportunities for outdoor adventures.

  • Rich History: Ancient monasteries, imposing fortresses, and vibrant cities showcase Georgia's captivating past.


Georgia: A land of opportunities


Georgia consistently ranks high in ease of doing business indices. Government initiatives aim to reduce bureaucracy, provide financial incentives, and facilitate market access. This makes Georgia an ideal destination for startups, tech companies, and international businesses seeking a fertile ground for growth.


Residency Options:


  • 183-Day Rule: Spending at least half the year in Georgia automatically confers tax residency.

  • High Net Worth Individual (HNWI) Program: An expedited option for those with substantial assets or income.

  • Other Pathways: Explore options for investors, entrepreneurs, and individuals seeking long-term relocation.



get in touch for transform your business in country Georgia


Guide to Taxes in Georgia: FAQs


What are the main taxes I should be aware of in Georgia?

Georgia has a simplified tax system with competitive rates. The main taxes for businesses include:


  • Corporate Income Tax (CIT): 15% for most businesses, 20% for financial institutions.

  • Value Added Tax (VAT): 18% standard rate.

  • Personal Income Tax (PIT): 20% for individuals.

  • Property Tax: 0.05% to 1% of property value.

  • Rental Income Tax: 5% for registered landlords, 20% for unregistered.

  • Import Taxes: 0%, 5%, or 12%

When does a Georgian company have to pay CIT?

Are there any special tax benefits for businesses in Georgia?

What about personal income tax in Georgia?

What is VAT, and do I need to register for it?

What are the deadlines for filing and paying taxes in Georgia?

I'm a foreign investor. What taxes should I know about in Georgia?

Why should I choose Georgia for my business?






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