Crypto Tax Rules in Georgia: What Founders Must Know
- Tinatin Tolordava
- Oct 3
- 4 min read
Table of contents:
Georgia’s Rise as a Crypto Hub
For crypto founders, tax and compliance can make or break expansion plans. Many countries treat crypto businesses with suspicion, creating high tax burdens or complex licensing. Georgia stands out as an exception.
In recent years, it has quietly built a reputation as one of the most crypto-friendly countries in Europe, with tax policies that favor both individuals and businesses. Fast company setup, no capital gains on crypto trading, and some of the lowest effective corporate tax rates in the world are just a few reasons why Web3 startups, DAOs, and mining operations are setting up shop in Tbilisi, Kutaisi, and beyond.
But favorable rules don’t mean you can skip compliance. Founders need to know what is taxed, what isn’t, and which structures give the biggest advantages.
How Georgia Taxes Individuals in Crypto
For individuals, Georgia takes a straightforward approach that is rare in the crypto world.
Crypto trading: If you are trading on foreign exchanges like Binance or Coinbase, your gains are generally tax-free in Georgia. Unlike in the US or EU, there’s no capital gains tax on these transactions.
Crypto-to-fiat conversions: Converting Bitcoin or Ethereum into GEL, USD, or EUR is VAT-exempt. This prevents the hidden cost many other countries impose on cashing out.
Freelance and contractor income: If you’re earning crypto for providing services, you must register as an Individual Entrepreneur (IE). With Small Business Status, your tax drops to 1% of turnover up to GEL 500,000 (about $185,000).
This system means digital nomads, developers, and freelancers can live in Georgia and keep most of what they earn, legally and transparently.
Corporate Tax Rules for Crypto Companies
For founders running structured businesses, Georgia’s corporate tax regime is even more interesting.
Georgia follows a model often called the Estonian tax system. Instead of taxing profits annually, corporate tax only applies when profits are distributed to shareholders.
That means:
If you reinvest your earnings: for example, into hiring new developers, buying mining hardware, or expanding infrastructure: no corporate tax applies.
The standard corporate tax is 15%, but only when profits are distributed as dividends.
This deferred tax system allows businesses to scale faster, with more capital kept inside the company. It’s a massive advantage compared to traditional tax systems where profits are taxed regardless of reinvestment.
Special Tax Regimes Every Founder Should Know
1. Virtual Zone Status
If your company provides IT or blockchain services to foreign clients, you can apply for Virtual Zone Status. This brings:
0% corporate tax on foreign-sourced income.
No VAT on exported services.
Perfect for Web3 startups, blockchain developers, and crypto SaaS companies.
2. International Company Status
Introduced to attract larger tech and finance firms, International Company Status offers:
5% corporate tax on profits.
0% dividend tax.
5% payroll tax for employees.
Ideal for crypto exchanges, wallet providers, or payment platforms needing a Georgian base.
3. Free Industrial Zones (FIZs)
For crypto miners and hardware-intensive businesses, FIZs are unbeatable:
0% corporate tax.
0% VAT.
No import duties on mining rigs and equipment.
Electricity access at competitive rates.
Choosing the right structure is critical. Founders often assume registering an LLC automatically unlocks these benefits, but in reality, you need to apply for these regimes separately.
Payroll Tax Rules: Paying Teams in Crypto
One of the biggest draws for crypto founders is payroll.
Employees: Hired under Employer of Record (EOR) arrangements, employees pay only 5% income tax. Salaries are reported officially, which helps with residency, mortgages, or visas.
Contractors: Registered as IEs with Small Business Status, contractors pay just 1% turnover tax. This is especially popular for DAOs or global teams paying contributors.
Important: Salaries must always be settled in GEL to count as legal income. Direct crypto payments to wallets do not qualify as compliant payroll. Through Gegidze, companies send crypto, it’s converted to fiat at 1.2–1.5% rates, and then distributed as salaries in GEL or foreign currencies.
Common Mistakes Founders Make
Georgia makes crypto business simple, but even here, mistakes cost money.
Paying directly in Bitcoin or Ethereum: Not recognized as salary, leading to compliance issues.
Skipping tax applications: Registering a company does not automatically grant Virtual Zone or International Company perks. These must be applied for.
Neglecting AML/KYC: Banks can block crypto-to-fiat conversions without clear documentation.
Worker misclassification: Calling employees “contractors” to save on taxes can result in backdated liabilities and penalties.
These pitfalls are common among foreign founders who rush in without local guidance.
How Gegidze Optimizes Crypto Tax in Georgia
This is where Gegidze comes in. Instead of juggling accountants, banks, and lawyers, founders get one provider that handles it all.
Company registration: LLC or International Company set up remotely in 1–2 days.
Tax regime applications: Secure Virtual Zone, International Company, or FIZ status.
Payroll setup: Employees taxed at 5%, contractors at 1%.
Crypto-to-fiat conversion: Done at transparent 1.2–1.5% rates.
Compliance handled: AML, KYC, and tax filings with the Revenue Service.
For founders, this means clarity and confidence. No second-guessing whether payments or profits are compliant.
Why Georgia Beats Other Jurisdictions
Compared to the EU or US, Georgia is remarkably lean:
EU: VAT on crypto services, high payroll taxes, slow licensing.
US: Federal + state taxes, strict reporting, and crypto payroll uncertainty.
Georgia: Clear rules, low taxes, and fast registration, no wasted months, no double taxation.
This combination makes Georgia not just crypto-friendly, but crypto-practical.
Conclusion: Tax Rules That Help You Grow
For founders, Georgia offers something rare in the crypto world: clarity. You know when you are taxed, how much, and under what structure. With 0–5% corporate tax, 1% contractor tax, and no VAT on conversions, you keep more money in your business and reduce compliance risk.
But the real advantage is pairing those tax benefits with the right partner. With Gegidze, founders get a compliant setup, streamlined payroll, and ongoing tax optimization.
Want to build your crypto business in Georgia the smart way?
Book a consultation with Gegidze today and let us turn Georgia’s crypto tax rules into your competitive edge.
