Georgia is no longer just a travel gem for digital nomads. It’s a full-blown tax strategy, especially for tech founders. One of the reasons? The Georgia virtual zone status.

This status is not just some obscure tax code detail. It’s a government-approved path to legally operate a tech company, invoice global clients, and pay 0% corporate tax on foreign income. No tricks. No shell companies. No Panama-style schemes. Just clear legal benefits if you know how to apply and stay compliant.

Thousands of companies have quietly taken advantage of this. Software startups. Solopreneur developers. Remote IT consultants. And for good reason. The combination of low-cost registration, legal tax exemptions, and full ownership rights for foreigners makes Georgia one of the most practical bases for international business.

But many founders still don’t understand what the virtual zone really is. Others confuse it with Georgia’s International Company status, which has entirely different rules. And a surprising number apply incorrectly and get rejected.

This guide is here to make sure that doesn’t happen to you.

What Is Georgia Virtual Zone Status?

Georgia’s virtual zone status is a special legal designation for local LLCs that operate in the tech or IT sector and export their services. The status is awarded by Georgia’s Ministry of Finance and allows approved companies to receive income from outside Georgia while paying 0% corporate profit tax on that income.

Let’s be clear: this is not a residency program. You don’t get a visa. You don’t need to live in Georgia. This is about your company’s legal tax status, not your personal one.

If you are interested in obtaining Georgian residency, you will find detailed information in our guide.

Once you’re granted virtual zone status, your company becomes a “Virtual Zone Person.” This means:

You can invoice clients in the US, EU, UK, or anywhere outside Georgia
You don’t pay corporate profit tax on that foreign-sourced income
You still need to register your business, keep proper records, and file monthly returns

It’s a straightforward incentive that’s part of Georgia’s national strategy to attract tech-driven economic growth.

Who Is It For?

The Georgia virtual zone status is ideal for:

Software engineers working with foreign clients
Dev shops building mobile apps or SaaS products
Agencies selling IT consulting or development services
Early-stage startups before hiring or scaling
Remote-first teams with a small footprint

Unlike the International Company status, you don’t need to hire full-time employees.

You don’t need to lease office space. You don’t need a tax consultant on retainer just to stay compliant. That’s why it’s a favorite of bootstrapped founders and international freelancers.

Flowchart with "Who Can Apply" in blue: solo dev with EU clients, small SaaS team in Tbilisi, remote IT agency. Icons illustrate each type.

Key Virtual Zone Benefits in Georgia

If you qualify, the financial upside is huge. Here’s what you get:

1. 0% Corporate Profit Tax on Exported ServicesIf you’re earning income from clients outside Georgia, that profit is exempt from the standard 15% corporate tax. You must still file monthly and annual declarations, but you don’t owe corporate tax unless you earn revenue inside Georgia.

2. 0% VAT on Foreign-Sourced RevenueYour services are treated as exports, meaning you don’t charge VAT to international clients. This simplifies accounting and keeps your invoices clean.

3. No Employee or Office RequirementsUnlike International Company status, there’s no minimum staff requirement. You can run your business solo or with contractors. And you don’t need to lease a physical office, which lowers your operating costs.

4. Free and Simple Application ProcessThe application doesn’t cost anything. It’s submitted online and typically processed in 10 business days if all documents are in order.

5. Legal Structure That Supports ScaleA Georgian LLC is a serious business structure. You can open bank accounts, receive investments, and sell your company later if needed. This is not a temporary workaround, it’s a legitimate business base.

Find out more about registering LLC in Georgia.

6. Full Ownership for ForeignersYou can own 100% of your company as a foreigner. No nominee, no silent partner, no restrictions.

Tax benefits table compares Corporate Tax, VAT, and Dividend Tax rates for Regular LLC and Virtual Zone. Background is light.

Who Qualifies for Georgia Virtual Zone Status?

This is where the Revenue Service has tightened the rules in recent years. While the bar is still low compared to other countries, not every LLC gets approved.

To qualify, your business must:

Be legally registered in Georgia as an LLC
Conduct software development or other IT activities
Sell services to clients located outside Georgia
Provide evidence of operations (a website, business portfolio, LinkedIn page, etc.)
Avoid blacklisted activities like gambling, online marketing, crypto trading, or non-IT services

It’s important that your activity is clearly within the tech sector. You don’t have to show code or product demos, but your documentation must make it obvious you’re in the IT field.

Also: don’t apply too early. If you just opened your company and have no materials to show for it, your application might get delayed or rejected. Gegidze always recommends waiting at least 5–7 business days after registration, so your company is active in the system and your documents are prepped properly.

The Common Mistakes People Make

Even though the application process seems simple, founders make predictable mistakes that cost them time and money.

1. Applying Before Setting Up Proper Documents

The Ministry of Finance needs a clear description of your activity in Georgian, along with a functioning website or business profile. If you submit vague or incomplete information, you’ll get a rejection or request for more details.

2. Registering the Wrong Business Type

Only Georgian LLCs can apply. If you register as an Individual Entrepreneur or operate through a foreign company, you’re not eligible. This is why proper legal setup matters from day one.

3. Assuming You’re Done After Approval

Many people think that once they get the virtual zone certificate, they’re free from obligations. That’s false. You must still file tax declarations every month, even if they are zero, and stay on top of your compliance.

4. Mixing Local and Foreign Income

Only foreign income qualifies for the 0% rate. If you start doing business inside Georgia, you’ll need to separate that income and pay corporate tax on it. It’s better to create a separate legal entity for local activity.

5. Not Hiring a Local Accountant

Even if your tax rate is 0%, you must file reports through RS.ge, Georgia’s official tax portal. This platform is only in Georgian and requires monthly filings. Failing to do this correctly can get your company fined or flagged.

Gegidze handles this for most of our clients. Founders stay focused on their product while our team keeps the declarations clean and timely.

Virtual Zone vs International Company: Know the Difference

This is where most of the confusion happens. Many founders hear about Georgia’s IT tax benefits and assume virtual zone and international company status are the same. They’re not.

Here’s a clear breakdown:

Feature	Virtual Zone Status	International Company Status
Corporate Tax on Foreign Income	0%	5%
Dividend Tax	5%	5%
VAT	Not applied on foreign services	0% on exported services
Physical Office Required	No	Yes
Employees Required	No	Yes (minimum 2 employees or contractors)
Application Fee	Free	Free
Approval Time	5–10 business days	10–30 business days
Audit Likelihood	Low	High (if turnover or employees exceed limits)

The virtual zone is perfect for lean operations, small teams, or freelancers who want to scale gradually. International Company status is better suited for fast-growing tech companies with employees, local operations, or VC-backed ambitions.

Still not sure which is better for you? Gegidze helps clients decide based on current activity, growth plans, and long-term tax efficiency.

How to Apply for Georgia Virtual Zone Status: Step-by-Step

You’ve registered your LLC. You’re offering legit tech services to foreign clients. You’re ready to go. Here’s exactly how to get Georgia virtual zone status without mistakes.

Step 1: Register a Georgian LLC

Only LLCs qualify for Georgia virtual zone status. If you’ve set up an Individual Entrepreneur (I.E.), you’ll need to convert or start over. Make sure the company is active, your address is registered, and your director is listed correctly.

Step 2: Prepare Your Documents

The application must include:

A short company description (in Georgian)
Website or online portfolio proving your IT services
Georgian company registration details
Contact info for your director or representative

Gegidze handles all this in-house. We translate, review, and upload everything on your behalf to reduce rejection risks.

Step 3: Submit to the Ministry of Finance

Applications are submitted through the RS.ge portal or directly via email. There's no fee, but accuracy is key. If your description doesn’t clearly explain how your company fits under IT services, you won’t get approved.

Step 4: Wait 5–10 Business Days

If everything is in order, approval is fast. You’ll receive a PDF certificate verifying your status as a “Virtual Zone Person.” Save this in your records. You’ll need it for tax filings and audits.

Step 5: Start Invoicing with Confidence

Once approved, you can begin issuing invoices under your Georgian LLC, stating 0% VAT and claiming 0% corporate profit tax on exported services. Don’t skip the next part, though: compliance matters just as much as registration.

Monthly Accounting After Getting Virtual Zone Status

This is where many founders mess up. Georgia’s tax rates are friendly, but tax compliance is mandatory. Every LLC, even with Georgia virtual zone status, must:

File monthly declarations via RS.ge
Keep electronic accounting records in GEL
Submit annual profit and dividend reports
Monitor foreign vs local income
Maintain copies of all invoices

Miss one month, and the Revenue Service can fine your company. Submit incorrect VAT declarations, and you may lose virtual zone status altogether.

We wrote a full guide: After Registration: Monthly Tax Accounting and Bookkeeping for Georgian Companies

What Income Qualifies for 0% Corporate Tax?

This is the most important question. Not all revenue qualifies for tax exemption under Georgia virtual zone status.

Text lists activities qualifying as 0% tax income: "Web dev," "SaaS," "IT consulting" (green), and non-qualifying ones: "E-commerce," "Marketing," "Local business" (red).

Here’s what does:

Web development, SaaS, software licensing
Remote IT consulting for foreign clients
Mobile app design and backend development
Maintenance of foreign-hosted cloud platforms
Platform integration or API development for overseas firms

What doesn’t count:

Marketing, design, or business consulting
Dropshipping, e-commerce, or product reselling
Local Georgian business activity (physical shops, clients in Tbilisi, etc.)

If you mix income types, you must separate your records. Local income is taxed at 15%. Foreign income that meets the virtual zone criteria remains at 0%.

When Should You Upgrade to International Company Status?

Text on left lists: "Hired 2+ staff, Need office, Scaling fast, Raising funds." Blue building facade with windows on the right.

Georgia virtual zone status is perfect until you start scaling. Once you hire people, open a local office, or receive serious investment, it may be time to apply for International Company status.

It offers:

5% corporate tax (still very low)
0% VAT on eligible exported services
Legal recognition for higher-volume operations
Clarity when operating with employees in Georgia

But it comes with higher compliance burdens, payroll filing, and likely audits. Gegidze helps companies transition smoothly.

Compare here: Virtual Zone vs International Company Status: Impact on Accounting & Taxation

How Gegidze Helps You Get It Right from Day One

Georgia’s virtual zone status is a legal tax advantage, not a loophole. But you only benefit if you set things up properly.

At Gegidze, we:

Register your LLC remotely with power of attorney
Translate and prepare your documents for application
Handle virtual zone submission and approval follow-up
Help you separate local vs foreign income
Give you clarity on when and how to scale legally

We’ve helped hundreds of tech founders use Georgia virtual zone status to build real, growing businesses with compliant structures.

If you want to operate legally, save on taxes, and avoid nasty surprises later, book a free call with us.

Frequently asked questions (FAQ)

What is Georgia virtual zone status and who qualifies?

Georgia virtual zone status is a tax designation for LLCs in the IT sector exporting services. To qualify, your company must be registered in Georgia, offer software-related services, and invoice foreign clients.

What taxes do I pay if I have Georgia virtual zone status?

You pay 0% corporate profit tax on foreign income and 0% VAT on exports. If you pay yourself dividends, you’ll pay 5% dividend tax. Local income is still taxed at 15%.

Can freelancers and solo developers apply?

Yes. Georgia virtual zone status has no minimum employee requirement. Solo founders, freelancers, and remote tech consultants can all apply and benefit from the 0% tax regime.

How long does the application process take?

Once your LLC is registered, the virtual zone application usually takes 5–10 business days. You’ll receive an official certificate from the Ministry of Finance.

Is virtual zone the same as International Company status in Georgia?

No. Georgia virtual zone status is lighter and designed for lean tech exporters. International Company status is stricter, requires employees and office presence, and taxes foreign income at 5% instead of 0%.