Open a Company in Country Georgia: LLC vs IE vs ICS Full Comparison
- 2 hours ago
- 11 min read
Table of contents
Open a Company in Country Georgia: LLC vs IE vs ICS Full Comparison
Deciding to open a company in Georgia is straightforward compared to most European or North American jurisdictions. The registration process is fast, the tax system is territorial, and the costs are low. The harder question is which legal structure fits your situation, because the wrong choice costs you money every year.
Georgia offers three main structures for foreign founders: the Limited Liability Company (LLC), the Individual Entrepreneur (IE), and the International Company Status (ICS). Each one carries a different tax profile, liability exposure, and compliance load. Your revenue model and client base determine which one wins.
This guide compares all three across the dimensions that matter most: tax rates, liability, banking, setup speed, and eligibility. Use it as a working reference, not background reading.
What Structure Options Actually Exist in Georgia
Georgia's business registration framework is simpler than most founders expect. The National Agency of Public Registry, operating through the House of Justice, handles company registration in Georgia for all entity types.
The Three Main Paths
LLC (Shpk in Georgian) is the standard corporate vehicle. It is a separate legal entity, meaning the company owns its assets and bears its liabilities. Shareholders are protected up to their capital contribution.
Suitable for: product companies, agencies, holding structures, and anyone raising investment
Minimum shareholders: one person, local or foreign
Directorship: no Georgian residency requirement for directors
Individual Entrepreneur (IE) is a sole-trader registration, not a separate legal entity. You and your business are the same legal person. The upside is a dramatically simpler tax regime: IEs with Small Business Status pay a 1% turnover tax on revenue below the annual threshold set by Georgian tax law.
Suitable for: freelancers, consultants, solo remote workers, and digital nomads
Liability: unlimited personal liability
Payroll: you cannot employ staff under an IE registration alone
International Company Status (ICS) sits at the top of the range. It is a special overlay applied to an existing LLC. It targets technology and knowledge-economy companies with genuine cross-border operations. ICS carries significant tax incentives on salary and profit, but it comes with strict eligibility conditions.
Who Registers Each Type
Most digital nomads and solo freelancers begin with an IE. Tech founders planning to hire, invoice corporate clients, or scale to investment rounds almost always register an LLC first, then evaluate whether Virtual Zone or ICS applies. The ICS route is typically chosen by established IT firms relocating operations, not first-time registrants.
Where Registration Happens
All three registrations run through the House of Justice. LLC and IE registrations are possible in one business day at a physical branch. Company registration in Georgia can also be completed remotely via a notarised power of attorney, which is the standard route for founders who have not yet arrived in Tbilisi.
How Georgia's Tax System Works Before You Choose a Structure
Structure choice is inseparable from tax outcome. Georgia runs a territorial tax system, which means income earned outside Georgia is generally not taxed in Georgia. That one fact shapes every comparison below.
The Corporate Tax Mechanic
Georgia uses an Estonian-model corporate income tax. An LLC pays 0% on profits it retains inside the business. The 15% corporate tax is triggered only when profit is distributed, typically as a dividend. A 5% withholding tax then applies on top, bringing the combined rate on distributed profit to roughly 20% in most scenarios.
You can read a full breakdown of how this works in practice in Georgia's business tax system explained.
Retained profit: 0% tax while it stays in the company
Distributed profit: 15% corporate income tax at the point of distribution
Dividend to individual: 5% withholding tax on the dividend amount
IE Tax: Simpler but Capped
An IE under Small Business Status pays 1% of gross turnover, not profit. There is no deduction of expenses before calculating the tax. That is extremely efficient for a high-margin service business, such as a freelance developer billing foreign clients, but less attractive for a business with significant costs.
The turnover threshold for Small Business Status is set by Georgian tax law and revised periodically. Confirm the current ceiling on rs.ge before relying on it for planning. Exceeding the threshold triggers a reclassification and a higher tax rate.
Virtual Zone: The IT-Specific Layer
An LLC that qualifies as a Virtual Zone IT company pays 0% corporate tax on income from IT services delivered to foreign clients. This is not a reduced rate. It is a full exemption on qualifying foreign-source income. Georgian-source income is taxed normally.
Virtual Zone status is applied to an LLC, not to an IE. It is the dominant structure for IT founders billing international clients from Georgia.
LLC vs IE vs ICS: Side-by-Side Comparison
The table below covers the structural facts that stay stable across years. Fees and thresholds are excluded because they are revised by Georgian authorities, consult rs.ge or the Revenue Service for current figures.
Dimension | LLC | IE (Small Business) | ICS |
Legal entity | Separate entity | Not separate (personal) | Overlay on existing LLC |
Liability | Limited to contribution | Unlimited personal | Limited (inherits LLC structure) |
Standard profit tax | 0% retained / 15% on distribution | N/A | Reduced rate on qualifying profit |
Turnover tax option | No | 1% (below threshold) | No |
Dividend tax | 5% withholding | N/A | Reduced or exempt (qualifying) |
Salary tax for employees | Standard scale | Cannot employ | Reduced flat rate for qualifying staff |
Virtual Zone eligible | Yes | No | No (separate regime) |
Foreign ownership | 100% allowed | 100% allowed | 100% allowed |
Registration speed | 1 business day | 1 business day | Requires prior LLC + application |
What the Table Does Not Show
Two dimensions do not compress cleanly into rows: banking access and investor perception.
Banks in Georgia treat LLCs and IEs differently. Corporate multi-currency accounts are easier to open under an LLC, and international payment platforms generally accept LLCs more readily than IEs. For a freelancer receiving payments from a single foreign client, this difference is minor. For a SaaS company handling multiple currencies and enterprise contracts, it is significant. See the bank account setup guide for what each structure requires.
ICS Eligibility: The Conditions Most Articles Skip
ICS is not available on demand. The eligibility conditions are substantive.
The company must have at least two years of operating history in a qualifying sector
It must employ a minimum number of local Georgian staff, meeting thresholds set by the relevant authority
Permitted activities are restricted to specific knowledge-economy and IT categories
The full requirements are detailed in the International Company Status guide. A company that does not meet the two-year history rule cannot apply regardless of its revenue or headcount.
For a structured view of how LLC and IE differ across liability, tax, and compliance, the Georgia LLC vs Individual Entrepreneur comparison table covers the key dimensions in one place.
Choosing the Right Structure for Your Situation
Not every founder needs the most sophisticated structure available. The right choice depends on three things: who your clients are, where your revenue comes from, and how fast you expect to grow.
When an LLC is the Obvious Choice
An LLC makes sense whenever personal liability matters, or when you expect to bring in partners or investors at any point.
Investor-ready structure: an LLC can issue shares and accept equity investment; an IE cannot
Client credibility: many B2B contracts, especially with EU or US counterparties, require a corporate entity
Hiring: an LLC is the cleaner vehicle for payroll, social contributions, and formal employment contracts
Multiple owners: an LLC can have two or more founders from day one
A software agency with three co-founders from Germany, for example, would register an LLC immediately. The LLC opening process requires no minimum capital and can be completed in a few business days at a House of Justice branch.
When an IE Works Better
An IE suits a solo operator whose revenue stays within the small-business status threshold and whose clients do not require a corporate counterparty.
Consultants and freelancers billing international clients under service agreements
Remote workers receiving a single-source income from one foreign employer or platform
Short-term testers who want to try the Georgian market before committing to a full company structure
The IE small-business status keeps the effective tax rate at 1% on turnover. That is a compelling number for a freelancer grossing under the annual threshold. Confirm the current threshold on rs.ge, because it has been adjusted in the past.
When to Combine Both or Layer a Special Status
Some founders register an IE immediately for personal consulting income, then add an LLC once they land their first team hire or larger contract. The two entities can run in parallel.
Virtual Zone LLC: suited to IT product and service exports; profits from qualifying activities carry a 0% corporate income tax rate
ICS: best for established tech businesses with a two-year track record and local staff
iGaming-specific: if you operate online gambling or sports betting, Georgia has a dedicated licensing and tax framework, covered in detail on the iGaming tax benefits page
Each special status has its own eligibility gate. Pairing the wrong status with the wrong entity type wastes compliance time and registration fees.
How to Open a Company in Georgia, Step by Step
Most founders underestimate how fast registration actually moves. A straightforward LLC can be live in two to five business days. The process has a clear sequence, and knowing it prevents avoidable delays.
Step 1: Prepare Your Documents
You need a small set of documents before visiting a House of Justice branch or working with a local representative.
Passport copies for all founders and directors, notarised or apostilled where required
Company name confirmed as available, checked via the National Agency of Public Registry
Legal address in Georgia, which can be a physical office or a registered address service
Charter (Articles of Association) drafted in Georgian, covering share structure and director authority
If your documents are foreign-language, the apostille and notary legalization process covers exactly what is needed and which steps apply to which nationalities. For a physical address, an address leasing service is a common solution for founders who work remotely and do not need office space.
Step 2: Register and Get Your Identification Number
Registration happens at a House of Justice branch. An agent can represent you with a notarised power of attorney, so you do not have to be present in Tbilisi.
The output is an Identification Number (ID) for the entity and an entry in the Georgian Business Registry. At this stage, the company is legally formed but not yet tax-registered or bank-enabled. Registration fees are set by the state; confirm the current amount at the House of Justice or on rs.ge, as they have changed periodically.
Step 3: Open a Business Bank Account
Georgian banks require the company to be registered before they will open a corporate account. The timeline varies by bank and by the founder's nationality.
Some founders encounter delays if they arrive without a Georgian tax registration or a local contact. The bank account setup guide walks through which banks are most accessible to non-residents and what documentation they typically request. TBC Bank and Bank of Georgia are the two largest and most widely used by foreign founders.
Step 4: Apply for Tax Registration and Special Statuses
Tax registration with the Revenue Service (rs.ge) happens after incorporation. If you want Virtual Zone status, apply before the company invoices any clients, since status is granted prospectively.
VAT registration: mandatory once turnover crosses the threshold (confirm the current figure on rs.ge); voluntary registration is possible before that point
Virtual Zone application: submitted to the Ministry of Finance; review typically takes a few weeks
ICS application: requires the two-year history, local staff, and qualifying activity, as detailed in the ICS requirements guide
For ongoing tax compliance after registration, tax accounting and bookkeeping services can handle monthly filings, VAT returns, and annual declarations.
Step 5: Set Up Operations
Once the bank account is active and tax statuses confirmed, you can invoice clients, sign contracts, and hire staff.
If you plan to employ people, payroll in Georgia involves income tax withholding and pension contributions. The payroll management service covers the mechanics. Founders who want to hire quickly without setting up a full HR function sometimes use an Employer of Record for the first hires.
Annual Compliance and Ongoing Costs
Registration is a one-time event. Compliance is ongoing, and the cost structure differs significantly between an IE and an LLC.
What LLC Compliance Looks Like
An LLC has the heavier compliance load of the two standard structures.
Obligation | Frequency | Notes |
Corporate income tax declaration | Annual | Only on distributed profits under the Estonian model |
VAT return | Monthly | Required once registered for VAT |
Payroll tax filing | Monthly | Per employee, withholding at source |
Financial statements | Annual | Submitted to the Revenue Service |
Director salary declaration | Monthly | If director takes a salary |
Profit retained inside the company is not taxed until distributed. This is the core mechanic of Georgia's Estonian-model corporate income tax, explained fully in the corporate income tax guide.
What IE Compliance Looks Like
An IE under small-business status has a lighter filing load.
Monthly turnover declaration: filed on rs.ge; the 1% rate applies to gross revenue
No corporate financial statements: IE does not produce statutory accounts
Income tax at source: if the IE pays salaries, it withholds as an employer
Pension contributions: applicable from a certain age threshold; confirm current rules on rs.ge
The tradeoff is that an IE cannot retain earnings inside a separate legal entity. All income flows directly to the individual, which may increase personal tax exposure depending on the founder's residency status.
Estimating Your First-Year Cost
Exact fees change, so treat these as directional ranges based on widely observed patterns.
Registration fees: a small, state-set amount paid at House of Justice; currently modest for both LLC and IE
Legal address: if using an address leasing service, budget for a monthly or annual fee
Accounting: monthly bookkeeping for a small LLC starts at a few hundred GEL per month at local firms; confirm with providers
Special status applications: Virtual Zone and ICS involve professional preparation costs on top of any state fees
For founders who want to map out their full tax position before committing to a structure, a tax optimisation review can model different scenarios based on actual projected revenue.
Frequently Asked Questions
Can a non-resident foreigner open an LLC in Georgia without visiting in person?
Yes. Georgian law permits registration by proxy. You grant a notarised power of attorney to a local representative, who attends the House of Justice on your behalf. The POA must be notarised in your country of residence and, depending on that country, may need an apostille before it is valid in Georgia. Some founders complete the entire process remotely within one to two weeks.
What happens if my IE revenue exceeds the small-business status threshold mid-year?
You lose small-business status for that tax year and become liable for income tax at the standard personal rate on the portion above the threshold. You must notify the Revenue Service and recalculate your liability. This is one of the most common and costly surprises for freelancers who have a single large contract land unexpectedly. Monitor your cumulative turnover monthly, not annually.
Can I convert my IE to an LLC later without closing it?
Georgia does not have a direct legal conversion mechanism from IE to LLC. In practice, you register a new LLC, migrate your contracts and clients to the new entity, and deregister the IE separately. The deregistration requires you to settle all outstanding tax liabilities first. Build a transition buffer of at least four to six weeks if you have active contracts.
Does opening a company in Georgia automatically make me a Georgian tax resident?
No. Company registration and personal tax residency are separate. You become a Georgian tax resident if you spend 183 or more days in Georgia in a calendar year, or if you qualify under the High-Net-Worth Individual regime. Registering a company does not trigger residency. The Georgian tax residency guide covers both routes and their implications in full.
Are dividends paid from a Georgian LLC taxed when sent abroad?
Georgia applies a 5% withholding tax on dividends at the point of distribution. This is the same rate whether the recipient is a Georgian resident or a foreign shareholder. If a tax treaty exists between Georgia and the shareholder's country of residence, the treaty rate may apply instead, potentially reducing the rate. Check the current treaty network on rs.ge and verify with your home-country tax advisor whether a credit is available.
Can a Virtual Zone LLC also hire local Georgian employees?
Yes, and many do. Having Georgian employees does not disqualify the company from Virtual Zone status. The restriction is on revenue source, not headcount. If any of those employees perform work billed to Georgian clients or produce income from Georgian-source activities, that revenue falls outside the 0% exemption. Separate invoicing for Georgian-source and foreign-source work is essential from the start.
What is the fastest way to get a Georgian bank account as a newly registered LLC?
The fastest route is typically TBC Bank or Bank of Georgia, both of which have dedicated business account teams for new companies. Bring your registration certificate, ID, director's passport, and a brief description of the business activity. Some banks require a local phone number and a Georgian address. Founders who use an address leasing service and have a Georgian SIM can often open an account within three to five business days of registration. If the company's activity or the director's nationality triggers additional due diligence, plan for two to three extra weeks.
