Disclaimer: Please note that this article contains general legal information and doesn’t contain legal or tax advice, and isn’t intended to constitute legal or tax advice.
The Republic of Georgia probably isn’t the first place on your mind when you think about relocating as a freelancer. However, if you’re looking for low taxes, minimal bureaucracy, a free, market-oriented economic policy, low costs of living, and a liberal visa policy – it might be the place for you!
Where is Georgia (Country) Located?
Georgia (known locally as Sakartvelo) is a country located between Asia and Europe in the southern Caucasus. It neighbors Turkey to the southwest, Azerbaijan to the east, Russia to the north, and Armenia to the south. The Black Sea opens up in the west with the Great Caucasus Mountains in the north and the Lesser Caucasus Mountains in the south. As a result, Georgia is largely mountainous with diverse natural conditions and with its local climate being of a transitional character from Asian to European. It’s a land with a unique history and unparalleled natural beauty that’s quickly accessible even from the capital city Tbilisi.
Perhaps more importantly for you as a freelancer, Georgia was ranked 7th in the “Ease of Doing Business” and 2nd in the “Starting a Business” categories among the 190 countries of the world, in the World Bank Group’s annual report Doing Business 2020.
Quick Overview: Essential Info on Georgia (Country)
|Region||Europe & Central Asia|
|Population||3.7 million (2021)|
Christians (84%), Muslims (9.9%), Armenian Apostolic (3.9%) and Catholics (0.8%)
|Capital||Tbilisi (Population: 1 million)|
|Other cities||Kutaisi, Batumi, Sokhumi, Zugdidi, Rustavi, Telavi|
• The Georgian language is distinct, completely unrelated to Indo-European, Semitic, or Turkic languages, being one of only 14 existing alphabets in the world
• The average exchange rate at the time of writing is: €1 = 3.5 GEL, $1 = 3.1 GEL
|Legal system||Civil law|
|Ethnic groups||Georgian – 86%, Azerbaijani – 6.5%, Armenian – 4.5%, Russian – 4.5%|
|Time||UCT+4, no DST|
|High-speed internet access and 4G mobile Internet||High-speed internet available in all major cities, with good mobile data coverage available almost everywhere|
|Power supply||220V AC with standard European plugs and sockets|
|Membership of international organisations||World Trade Organization, UN, The Organization for Security and Co-operation in Europe (OSCE). International Monetary Fund (IMF)|
• NOT a member of, in particular: EU, NATO, Schengen Area.
|Emergency service number||112 (includes ambulance, police, and fire service)|
Working Remotely From Georgia (Country) – Advantages For Freelancers
Working remotely from Georgia will be especially attractive to you if you prefer avoiding hassle when it comes to registering and conducting your freelance business. Georgia is known for its simple procedures, low registration costs, modern banking system, low tax rates, double taxation treaties, along with extremely affordable living costs. If you are a citizen of one of the specified 98 countries, including but not limited to the EU, UK, and USA, you can conduct your freelance business as a sole proprietor in Georgia without a visa or residence permit for 1 full year (so-called visa-free regime). Citizens of different countries may also be eligible under alternate rules.
Pursuant to Georgian law, operating as a sole proprietorship implies that business activities are carried out by a natural person who is personally responsible (with their personal assets) to creditors and other third parties. However, if you want to enjoy personal liability protection for your freelance business, you might consider forming an LLC under Georgian law. In fact, the majority of companies in Georgia are established as LLCs. Please note that to form an LLC you don’t need to be a resident of Georgia.
It’s important to underline that Georgia concluded 56 double taxation treaties with most European and many non-European states, which provide additional protection for taxpayers from double taxation risks.
Forming an LLC in Georgia (Country)
Limited liability companies (LLCs) are the most common form of business entity in Georgia. They offer a less complicated organizational and management structure than other incorporated business forms, as well as simplified and cheaper forming procedures, and limited liability exposure. Read our comprehensive summary of LLC vs freelance and find out more about which business structure is best for you.
The most attractive characteristics of an LLC formed in Georgia are, in particular:
- It can be established by a single founder.
- A founder can be a natural person or a legal entity.
- There are no restrictions regarding the number of directors, an LLC can be managed by a single director or jointly by several directors.
- Directors do not have to be Georgian residents or even visit Georgia to open an LLC.
- There are no requirements regarding authorized and paid-up capital (Georgian law doesn’t provide either minimum nor maximum share capital).
- Employees can be from Georgia or elsewhere.
The main disadvantages of forming an LLC in Georgia are, in particular:
- An LLC won’t qualify for a special tax status like the Small Business Status, i.e. won’t qualify for 1% tax on gross turnover.
- Accounting requirements are more complicated than for a sole proprietorship with 1% tax on gross turnover for Small Business Status.
0% Or 1% Tax for Freelancers in Georgia
If you decide to register your freelance business there, Georgia offers special, very attractive tax regimes for freelancers (individuals who qualify for Micro Business or Small Business Status).
Micro Business Status
The benefit of obtaining the Micro Business Status is a complete exemption from personal income tax.
Nevertheless, as a Micro Business, you still have to maintain all primary tax documentation.
To obtain the Micro Business Status you have to:
- Receive annual gross income below 30,000 GEL (approx. 9,700 USD).
- Conduct economic activities independently without hiring any employees.
- Carry out activities that Micro Businesses are permitted to conduct*.
- Maintain an inventory balance up to 45,000 GEL (approx. 14,500 USD).
Small Business Status
The benefits of obtaining the Small Business Status are:
- Personal income tax at a rate of 1% of total gross income.
- However, personal income tax rate amounts to 3% in case the gross income from your economic activity exceeds 500,000 GEL (approx. 160,000 USD).
- Salaries paid to your employees in the amount up to 6,000 GEL annually (approx. 1,900 USD) aren’t taxed at the source if the Small Business Status was received in the same calendar year or income received in the previous calendar year doesn’t exceed 50,000 GEL (approx. 16,000 USD).
To obtain the Small Business Status you have to:
- Receive annual gross income from economic activities of no more than 500,000 GEL (approx. 160,000 USD) in each calendar year during two consecutive calendar years.
- Undertake activities that are not prohibited for Small Businesses*.
- Have not been penalized more than 3 times during a calendar year for incorrect use of a cash register.
*The prohibited activities include, in particular, activities that require specific licensing or permission, currency exchange operations, staffing, gambling business, medical, architectural, legal, auditing, and consulting activities of any kind.
0% Tax for Virtual Zone Persons
Georgia also offers 0% corporate income tax for IT companies providing IT services (i.e. software creation, web development, application building) holding a certificate of “Virtual Zone Person” (VZP). According to Georgian tax law, a Virtual Zone Person is a legal entity operating in the IT sector, having obtained a certificate that proves this status.
An IT company with VZP status doesn’t pay corporate income tax in Georgia on the revenue derived from providing IT services – specifically software creation – to non-residents (entities located outside Georgia). Once VZP status has been obtained, the company enjoys these tax benefits for as long as it continues to offer foreign IT services.
FAQ – Georgia (Country) For Freelancers
Georgia is open to foreign investment and offers very beneficial tax regimes, minimum bureaucracy, and accessible banking. Georgia is also very attractive due to its geographic location and business environment. In 2014, Georgia concluded an association agreement with the EU on free trade and visa-free travel. Additionally, in 2017, Georgia signed the Free Trade Agreement (FTA) with China to diversify its economic ties.
Doing Business 2020, which is a World Bank Group annual report, ranked Georgia 7th in the “Ease of Doing Business” and 2nd in the “Starting a Business” categories among the 190 countries of the world. Furthermore, Georgia is seen as one of the safest countries with the lowest crime rate and incidence of corruption in the region.
Generally, the process of registering a business in Georgia is quick and streamlined and takes only 1 day to complete (the standard procedure takes about 24 to 36 hours). It also offers very favorable taxes to freelancers, including only 1% personal income tax for small businesses (0% is possible in certain circumstances). At the same time, Georgia offers a very low cost of living which can be especially beneficial while setting up and operating your freelance business.
If you are a citizen of one of the specified 98 countries, including but not limited to the EU, UK, and USA, as a rule, you can enter Georgia and work remotely without a visa or residence permit for a full year. You can even leave and re-enter the country to extend this for another year.
As a rule, if you are a citizen of one of the specified 98 countries, including but not limited to the EU, UK, and USA, you can enter, reside, as well as work (and study) in Georgia without a visa or residence permit for 1 full year (so-called visa-free regime).
Currently, as a rule, EU citizens, as well as UK and US citizens (among citizens of 90 other listed countries) can stay in Georgia without a visa for 1 full year.
Yes. Pursuant to Georgian law, foreign citizens can register as sole traders and initiate
business activities in the country of Georgia.
Georgian. The majority of people also speak Russian, while younger generations also speak English.
Georgia offers very low living costs. Generally, it’s estimated you can get by on roughly $500 per month, while with $1,000+ you’ll be able to enjoy a good standard of living even in the capital city – Tbilisi – which is the most expensive place in Georgia.
The biggest city in Georgia is the capital city – Tbilisi. The next largest cities in Georgia are Kutaisi, Batumi, and Sokhumi.
We like Lokal, Impact Hub, and Collective – you can check out our full analysis in our the best coworking spaces in Tbilisi article.