Individual Entrepreneur in Georgia Country 2026: Registration, 1% Tax & Small Business Status
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Individual Entrepreneur in Georgia Country 2026: Registration, 1% Tax & Small Business Status
An individual entrepreneur in Georgia Country is a person registered to trade in their own name in Georgia (the country), the republic in the Caucasus. With small business status, the individual entrepreneur pays 1% tax on turnover up to an annual cap, historically 500,000 GEL (about 170,000 EUR). Registration usually takes one business day.
This setup is the default choice for foreign freelancers, consultants outside the excluded professions, and remote contractors who invoice clients abroad. A German copywriter billing 4,000 EUR a month keeps 3,960 EUR after the 1% tax. Local social contributions and personal spending are separate questions.
The model works best when you trade alone and your clients accept invoices from a person rather than a company. It suits people with modest overheads, because the tax applies to gross turnover. Expenses do not reduce it. As of 2026, the core structure has stayed stable for years. Confirm the current threshold on rs.ge before you plan around it.
What an Individual Entrepreneur in Georgia Actually Is
A Georgian IE is a natural person entered in the national Registry of Entrepreneurs, kept by the National Agency of Public Registry (NAPR) under the House of Justice. It is not a separate legal entity. You and the business are the same person in law.
The legal status
Registration gives you a business identity without creating a company. The practical effects follow from that:
Identity: your personal ID number becomes your tax ID with the Revenue Service.
Liability: you answer for business debts with all your personal assets.
Capital: no minimum capital applies, so you can start with 0 GEL in the account.
Name: you trade under your own name, not a registered brand.
A Ukrainian developer who registers on a Monday can usually issue her first invoice on Tuesday. The House of Justice processes most standard IE filings within one business day.
What small business status adds
Registration alone puts you on the general tax regime. That means 20% personal income tax on profit. The 1% rate only applies after you apply separately for small business status through your rs.ge account.
The status changes three things:
Rate: 1% on gross turnover from qualifying activity.
Filing: a monthly declaration due by the 15th of the following month.
Bookkeeping: a simplified income record instead of full accounts.
The two steps are distinct, and many first-time founders miss the second one. If you skip it, you file under the general regime and pay 20% on profit. Our team handles both stages through IE registration and small business status support.
Who Qualifies for Small Business Status in Georgia
Most small business status applications are approved within a few business days. That speed depends on your activity being eligible. Eligibility turns on what you do and how much you earn, not on your citizenship.
Profiles that typically qualify
The status was designed for independent traders and service providers. Common approved profiles include:
Software developers contracting with foreign clients.
Designers in UX, graphic and product work.
Copywriters and translators selling services online.
Online sellers trading goods in their own name.
Marketers running campaigns for overseas brands.
A Polish UX designer billing a Berlin agency 60,000 EUR a year fits this pattern. Her annual tax under the status is 600 EUR.
Activities excluded from the status
Georgian rules exclude certain professions. Historically, the excluded list has covered consulting services, notary work, audit and accounting, and activities that require specific licences or permits.
Consulting causes the most rejections. If your invoices say "consulting" or "advisory", the Revenue Service may refuse the status or challenge it later.
Salary income also stays outside the regime. If you hold a Georgian employment contract alongside your IE, that salary is taxed under the normal personal income tax rules.
Residency is not a precondition
You do not need Georgian tax residency or a residence permit to hold the status. A nonresident can register remotely through a power of attorney. Tax residency, based on the 183 days rule, affects how your home country treats your income. It is a separate decision.
Individual Entrepreneur vs LLC in Georgia
Factor | Individual Entrepreneur (SBS) | LLC |
Legal personality | None, you are the business | Separate legal entity |
Personal liability | Unlimited, all personal assets | Limited to the company's assets |
Main tax | 1% on gross turnover | 15% corporate tax on distributed profit, 0% if retained |
Taking money out | No extra tax on withdrawals | 5% dividend tax on distributions |
Turnover ceiling | Annual cap, historically 500,000 GEL | No cap |
Co-owners | Not possible | Multiple partners allowed |
Bookkeeping | Simplified income record | Full accounting and financial reports |
When the LLC is the better choice
The IE is the wrong structure in several common situations. Two Dutch founders building a SaaS product together cannot share one IE. They need an LLC with a shareholding split from day one.
Choose an LLC instead if any of these apply:
Investors: you plan to raise capital or issue equity.
Contract risk: your contracts carry penalties or damages claims you would not want to cover personally.
High margins near the cap: your turnover will pass the threshold within one or two years.
Enterprise clients: your buyer's procurement team only contracts with companies.
The LLC opening service covers remote setup through power of attorney. The full sequence for each structure is in How to Register a Company in Georgia Country 2026.
When the gap in tax is smaller than it looks
The 1% rate applies to every lari you invoice. Expenses do not reduce it. An LLC can reinvest profit and pay 0% until it distributes. For a business with heavy costs, such as an agency paying subcontractors 70% of revenue, the effective burden can come out close.
Run your own numbers. Imagine 300,000 GEL turnover with 210,000 GEL in subcontractor costs. The IE pays 3,000 GEL in tax. An LLC distributing the remaining 90,000 GEL profit would pay more in combined corporate and dividend tax. The IE still wins in that case, but the margin is narrower than the headline rates suggest. Our corporate income tax guide explains the distribution trigger in detail.
Staying Compliant After You Get Small Business Status
Your main obligation under small business status is one monthly declaration. You file it on the rs.ge portal by the 15th of the following month, and you pay the 1% by the same date. Most solo IEs spend less than 15 minutes on it once the routine is set.
The Monthly Declaration Rhythm
Take a Ukrainian UX designer living in Batumi with three clients in the EU. In March she receives 9,000 GEL (about 3,000 EUR as of 2026). She declares that turnover by April 15 and pays 90 GEL.
Each declaration covers three things:
Turnover received during the month, in GEL
Tax due at 1% of that turnover
Payment to the Revenue Service account by the deadline
Foreign currency counts too. Turnover received in EUR or USD is converted to GEL at the National Bank of Georgia official rate for the date you receive it. Your bank's conversion rate is irrelevant for tax purposes. Our guide to monthly and annual tax deadlines in Georgia maps the full filing calendar.
Two Thresholds You Track Separately
Small business status has an annual turnover cap. It has historically been 500,000 GEL (about 165,000 EUR) per calendar year, so confirm the current figure on rs.ge before you plan around it. Turnover above the cap has historically been taxed at 3% instead of 1%, and the status can be cancelled.
VAT runs on a different clock. The VAT registration threshold applies to taxable turnover over any rolling 12-month period, not the calendar year. Small business status does not exempt you from VAT. An IE selling taxable services inside Georgia can cross the VAT line well before reaching the status cap.
What Costs You the Status
Status loss usually comes from a change in your work, not from a filing error. Watch for these triggers:
New activity that falls on the excluded list, such as consulting work added to a design business
Turnover above the annual cap
Repeated violations of filing or payment rules flagged by the Revenue Service
Keep your records clean from day one. That means issued invoices, client contracts and bank statements. If the Revenue Service questions your activity type, contracts that describe the actual work are your best evidence.
How to Register as an Individual Entrepreneur in Georgia, Step by Step
Registration itself takes one business day at a Public Service Hall. The full path, from passport in hand to a working bank account, usually runs 5-10 business days. Most of that time goes to the status application and the bank.
Before You File
You need very little paperwork as a foreign individual:
Passport, valid and original
Legal address in Georgia, backed by a lease or the owner's written consent
Activity description that matches what you actually do
Contact details, including a Georgian phone number for portal access
The legal address matters more than people expect. Official notices from the Revenue Service go there. If you rent short-term, check that your landlord will sign a consent form before you book the Public Service Hall slot.
Registration at the House of Justice
You register with NAPR through the House of Justice. Staff enter your details, and you receive a registration extract. The standard fee has historically been about 50 GEL (about 16 EUR) for next-business-day service, with a higher fee for faster processing. Confirm it on the House of Justice price list.
Foreign IEs receive an identification number that works as the tax ID on rs.ge. Georgian citizens use their personal number instead. You then activate your rs.ge portal account, which is where every declaration and status request happens.
Consider a Polish backend developer staying in Tbilisi. He registers on Monday and collects the extract on Tuesday. He applies for small business status on Wednesday and opens his bank account the following week. He sends his first invoice within 10 business days of arriving.
Small Business Status and the Bank Account
Small business status is not automatic. You apply separately through the rs.ge portal after registration, and the Revenue Service reviews the request. Approval typically arrives within a few business days.
The bank account comes last. Bank of Georgia and TBC Bank are the usual choices, and both ask about your clients and source of funds. Our guide to opening a bank account in Georgia online covers what banks request from non-residents.
What an Individual Entrepreneur in Georgia Costs to Run in 2026
Cost item | When you pay | Amount as of 2026 | Where to confirm |
IE registration, standard | Once | Historically about 50 GEL (about 16 EUR) | House of Justice price list |
Same-day registration | Once, optional | Higher than standard fee | House of Justice price list |
Small business status application | Once | No state fee on the portal | rs.ge |
Turnover tax | Monthly | 1% of turnover | rs.ge |
Legal address | Ongoing | Free with owner consent, paid if leased | Landlord or address provider |
Bank account maintenance | Monthly | Bank tariff, varies by package | Bank tariff sheet |
Document translation | Once, if needed | Per page, varies by translator | Notary or bureau quote |
Accountant | Monthly | Varies by invoice volume | Provider quote |
Costs People Underestimate
The state fees are small. The real costs sit elsewhere:
Currency conversion spreads when your bank changes EUR or USD into GEL
Accountant time if you receive dozens of small foreign payments each month
Translation and notary fees if you register through a representative
Home-country tax advice if you are leaving a high-tax jurisdiction mid-year
A content agency owner receiving 40 Stripe payouts a month generates far more reconciliation work than a developer with one monthly retainer. Price your bookkeeping on transaction count, not turnover.
When an IE Is the Wrong Choice
An IE in Georgia does not move your tax home. Picture a German freelancer who lives in Berlin for 10 months a year and registers an IE in Tbilisi. Germany still taxes his worldwide income, and the 1% Georgian tax barely offsets anything.
Skip the IE in these cases:
You stay tax resident in your home country and spend under 183 days in Georgia
You plan to raise investment, since investors buy shares and an IE has none
You share ownership with a co-founder, which an IE cannot hold
Our guide to Georgian tax residency requirements explains how the 183-day test interacts with your home country.
Frequently Asked Questions
Can I register an individual entrepreneur in Georgia without visiting?
Yes, through a representative holding your power of attorney. The power of attorney must be notarized in your home country, apostilled, and translated into Georgian. Allow 1-3 weeks for notary work and courier time. Our apostille and notary legalization guide covers the document chain.
How do I prove Georgian tax residency to my home country?
You request a tax residency certificate through the rs.ge portal once you have spent 183 days in Georgia within a 12-month period. Your home tax authority and foreign banks use this certificate to apply a double tax treaty. IE registration alone does not qualify you for one.
Can an IE with small business status hire employees?
Yes. You withhold 20% personal income tax from each salary and handle pension contributions, which are 2% from the employee and 2% from you as employer. These payroll figures go into a monthly declaration, due on the same 15th-of-the-month cycle as your turnover tax.
What happens if I miss a monthly declaration?
The Revenue Service charges a penalty for late filing and adds interest on unpaid tax for every day of delay. Check the current amounts on rs.ge. File the late declaration as soon as you notice the gap, because a pattern of violations puts your small business status at risk.
Can I convert my IE into an LLC later?
There is no direct conversion. You register a new LLC, move client contracts and invoicing details to it, and open a new bank account. Most founders run both for a month of overlap, then close the IE after the last client payment clears.
Is there extra tax when I withdraw money from my IE account?
No. Money left after the 1% turnover tax is already your personal income. An LLC owner pays dividend tax on distributions, but an IE has no dividend step. Keep business and personal spending traceable anyway, since bank compliance teams still review account activity.
Do I need to register for VAT if all my clients are abroad?
Often not. Services supplied to foreign business clients usually have their place of supply outside Georgia, so they generally do not count toward the VAT threshold. Selling to Georgian clients or to foreign consumers can change that. Have an accountant check your client mix before you rely on the exemption.
