Georgia’s Tax Heaven: How the Caucasus Country Became a Global Magnet for Entrepreneurs, Tech Startups, and Crypto Traders

By TaxAdvisory.ge, April 19, 2025

 

In a world where tax efficiency often determines the success or failure of a business, the small but strategic nation of Georgia (the country) is making waves. Located at the crossroads of Europe and Asia, Georgia has quietly built one of the most attractive, accessible, and business-friendly tax systems on the planet.

From freelancers to full-scale IT companies, from crypto investors to global traders, Georgia offers a range of legal tax exemptions and special statuses that make it a haven for digital-age entrepreneurship. Here’s an in-depth look at how Georgia welcomes you with low or even zero taxes, depending on how you do business.

 

1. Small Business Status (SBS): The Freelancer’s Favorite – Just 1% Income Tax

One of the most celebrated tax regimes in Georgia is the Small Business Status (SBS), available to individual entrepreneurs earning up to 500,000 GEL (approx. $170,000 USD annually).

Under this scheme, individuals pay a flat 1% tax on gross income—with no VAT, no corporate income tax, and minimal paperwork. This makes it perfect for:

• Freelancers (e.g., programmers, copywriters, designers)
• Online consultants or coaches
• Solo IT contractors and remote workers
• Small service businesses

Example: An IT consultant earning $100,000 per year pays only $1,000 in taxes. In contrast, the same individual in Western Europe might pay $25,000 to $40,000 in income and self-employment taxes.

How to apply: You must register as an Individual Entrepreneur and apply for SBS with the Revenue Service. No Georgian citizenship is required—residency or long-stay presence is enough.

 

2. Virtual Zone Person (VZP): 0% Corporate Tax for IT Exporters

If you run a company in Georgia that provides IT services to clients outside Georgia, you may be eligible for Virtual Zone Person (VZP) status. This is a special regime designed to support the export of Georgian tech talent.

To qualify, your company must:

• Be registered in Georgia as a legal entity (LLC is common)
• Engage in approved IT activities (e.g., software development, SaaS, digital platforms)
• Have clients abroad (outside of Georgia)

Once granted, you enjoy 0% corporate income tax on revenues generated from non-Georgian clients.

Important: Dividend payouts are taxed at just 5%, making it an efficient solution for founder-owned tech startups.

 

3. International Company Status (IC): 5% Income Tax for Proven IT & Maritime Experts

For more experienced and internationally-oriented enterprises, Georgia introduced the International Company (IC) status, tailored for companies with a track record of at least two years in IT or maritime services.

To qualify:

• Conduct only permitted activities (e.g., software development, cloud services)
• Serve clients abroad
• Be either a Georgian company or a foreign branch in Georgia

Tax Benefits:

• 5% Corporate Income Tax
• 0% Property Tax
• 0% Import VAT
• 5% Dividend Tax

Example: A European IT outsourcing firm opens a Georgian branch, hires 10 developers locally, and pays just 5% on global income—saving tens of thousands annually.

 

4. Free Industrial Zone Enterprise (FIZ): Absolute Tax Freedom

Georgia’s Free Industrial Zones (FIZs)—such as those in Poti, Kutaisi, and Tbilisi—are ideal for manufacturers, logistics providers, and trade processors. Companies operating in these zones benefit from full tax exemptions:

• 0% Corporate Income Tax
• 0% VAT
• 0% Property Tax
• 0% Import/Export Tax
• 0% Dividend Tax

The main condition is that FIZ-registered businesses do not sell goods directly on the Georgian market but rather engage in processing, recycling, manufacturing, or export.

Example: A company imports electronic components, assembles them in Kutaisi FIZ, and exports them to the EU—paying no tax throughout the process.

 

5. Crypto Taxation in Georgia: 0% Income Tax for Individuals

Georgia is one of the most crypto-friendly countries in the world. According to official policy:

• Individual crypto investors pay 0% capital gains tax
• No VAT applies to crypto transactions
• Crypto mining and blockchain development by individuals are also untaxed

Corporate taxation: Companies may be taxed if engaged in mining or brokerage activities commercially, but the treatment depends on the model and licensing.

Legal certainty: Georgia's tax office has issued public clarifications that crypto is not considered taxable income for private investors or holders.

 

6. LLC & Reinvestment: No Tax Until Profits Are Distributed (Estonian Model)

Georgia uses an Estonian-style Corporate Income Tax (CIT) model, meaning that companies only pay tax when profits are distributed to shareholders. Until that moment, no corporate tax applies.

How it works:

• 0% CIT on retained earnings
• 15% CIT when distributing profits
• 5% Dividend Tax on shareholder income

Example: A Georgian LLC makes $100,000 profit but reinvests it into marketing, software, and hiring. Result? $0 tax until dividends are paid.

 

The Verdict: Why Entrepreneurs Are Moving to Georgia

Georgia offers a rare combination of:

• Low taxes and high legal transparency
• Straightforward business registration
• Modern e-governance and digital signatures
• No capital controls or currency restrictions
• Fast bank account openings (with remote options)

“Georgia is not a tax loophole—it’s a tax launchpad.”

 

Want to Register a Company or Claim a Tax Status in Georgia?

We help freelancers, IT companies, crypto entrepreneurs, and international traders to register, optimize taxes, and stay compliant in Georgia.

• Virtual Zone Person?
• Small Business Status?
• FIZ enterprise or IC status?

Contact us for a free consultation. Let’s legally reduce your taxes and grow your business with Georgia as your operational base.