Web3 and DAO Payouts in Georgia: How It Works
- Tinatin Tolordava
- 10 hours ago
- 4 min read
Table of contents:
Why Web3 and DAOs Need a Legal Base
Web3 companies and DAOs are rewriting how teams work. Instead of traditional offices, they have global contributors. Instead of fiat-only, they pay in Bitcoin, Ethereum, or stablecoins. It’s fast, borderless, and native to the crypto economy.
But there’s a catch: most countries don’t know what to do with DAO payouts. Sending crypto directly to a wallet often isn’t recognized as legal income. Contributors end up with no proof of salary, and DAOs risk compliance issues.
That’s why more Web3 projects are using Georgia as their operational base. The country offers clear tax rules, low rates, and simple structures for paying global teams in crypto — without the headaches.
Are DAO and Web3 Payouts Legal in Georgia?
Yes, as long as they’re structured correctly. Georgia recognizes crypto as legal property, but not legal tender. Salaries and payouts must ultimately be settled in GEL (Georgian Lari) or another fiat currency to count as official income.
This means DAOs and Web3 startups can’t simply send 0.05 ETH to a contributor’s wallet and call it payroll. Instead, the compliant process looks like this:
DAO or startup sends crypto to Gegidze.
Gegidze converts it into fiat at 1.2–1.5% rates.
Contributors receive payouts in GEL, USD, or EUR directly into their bank accounts.
Taxes are filed automatically with the Georgian Revenue Service.
The result: legal, tax-compliant crypto payouts that still keep Web3’s speed and flexibility.
Tax Options for DAO Contributors in Georgia
1. Employees (EOR Model)
Through Gegidze’s Employer of Record (EOR) services, DAO members or startup employees can be officially hired under Georgian law.
Employees pay only 5% income tax.
Contracts are fully compliant with labor law.
Contributors get official employment records, which help with visas, mortgages, and credit applications.
2. Contractors (Individual Entrepreneurs)
Freelancers and part-time contributors can register as Individual Entrepreneurs (IEs). With Small Business Status, the tax rate is just 1% of turnover up to GEL 500,000 per year.
Perfect for DAO developers, community managers, or designers.
Simple monthly filing done online.
Keeps more income in contributors’ pockets.
This dual structure makes Georgia one of the best places to run global payroll for crypto-native teams.
Why Georgia Is Ideal for Web3 Payroll
Let’s compare:
US/EU: DAOs struggle to classify workers legally. Payroll taxes range from 20–40%. AML/KYC checks make crypto payments slow and expensive.
Georgia: Employees at 5%, contractors at 1%. No VAT on crypto conversions. Fast bank account setup in 3–5 days.
On top of that, Georgia offers special statuses for crypto businesses:
Virtual Zone: 0% corporate tax on foreign-sourced IT and blockchain revenue.
International Company: 5% corporate tax, 0% dividend tax, 5% payroll tax.
Free Industrial Zones (FIZs): 0% corporate tax, 0% VAT, no import duties for mining hardware.
For Web3 companies serving international clients, these regimes make Georgia far more attractive than Europe or the US.
How a DAO Can Pay Contributors Through Georgia
Here’s a practical example:
A DAO has 30 contributors worldwide — developers, community leads, and marketing staff. Without a structure, the DAO just sends USDT or ETH to wallets. The problems: no contracts, no proof of income, no tax compliance.
By using Georgia:
DAO sets up a Georgian entity or partners with Gegidze.
Contributors are classified as employees or IEs.
Payroll is processed legally, with taxes applied at 5% or 1%.
Contributors get compliant bank transfers and proof of income.
The DAO remains legally sound and attractive to investors.
This structure turns a loose, experimental DAO into a compliant global employer — without losing its decentralized nature.
AML/KYC and Compliance in Georgia
Compliance is a major pain point for Web3 projects. Georgia makes it manageable. VASP registration is only required for businesses that provide custodial wallets, run exchanges, or manage client assets. Most DAOs and Web3 startups don’t need this.
Still, AML and KYC checks apply when converting crypto to fiat. Gegidze handles:
Preparing contracts and invoices.
Documenting payment purposes.
Filing reports with the Revenue Service.
This ensures crypto payouts aren’t flagged by banks, and contributors get their funds without delays.
Common Mistakes DAOs Make (and How to Avoid Them)
Even in Georgia, founders sometimes get tripped up:
Paying contributors directly in crypto. Not recognized as salary, and no taxes filed.
Assuming LLC registration alone is enough. You need to apply for Virtual Zone or International Company status separately.
Misclassifying workers. Calling full-time employees “contractors” to save money can backfire.
Skipping compliance paperwork. Missing AML/KYC documentation leads to frozen transfers.
Why Founders Trust Georgia for Web3 Payroll
Low taxes: 1% or 5% compared to 20–40% elsewhere.
Clarity: Crypto rules are defined and stable.
Speed: Companies registered in 1–2 days, bank accounts opened in 3–5 days.
Remote setup: Everything done online, no need to travel.
Crypto focus: Tax regimes tailored to IT, Web3, and mining.
It’s not just about saving money. It’s about operating in a jurisdiction that understands crypto and offers predictable rules.
How Gegidze Makes It Simple
Web3 teams and DAOs don’t want to get buried in tax codes. They want payouts to “just work.” Gegidze takes care of the details:
Remote company registration.
Employee and contractor onboarding.
Crypto-to-fiat conversion at low rates.
Payroll reporting to Georgian authorities.
Applications for Virtual Zone or International Company status.
From contributor payouts to corporate compliance, everything runs smoothly under one roof.
Conclusion: DAOs and Web3 Teams Finally Have a Home
For years, DAOs and Web3 projects have faced the same problem: how to pay contributors legally in crypto. Georgia solves that. With clear payroll taxes (5% for employees, 1% for contractors), no VAT on conversions, and business-friendly regimes, it’s one of the best countries to anchor a decentralized organization.
With Gegidze, DAOs and Web3 founders can pay contributors worldwide quickly, legally, and without losing crypto-native flexibility.
Ready to turn your DAO payouts into compliant, low-tax salaries?
Book your free consultation with Gegidze today and start paying your Web3 team the smart way.
