Company Formation in Georgia (the Country)

Company formation in Georgia, the country in the Caucasus (not the US state), usually means registering an LLC in a day with no minimum capital. Profits are taxed at 15% only when distributed, and IT exporters can apply for Virtual Zone or International Company status. It suits businesses that reinvest and have real people in Tbilisi or Batumi.

Key points

• Georgia taxes company profit at 15% only when it is distributed (or treated as distributed); retained and reinvested profit is not taxed.

• Virtual Zone Persons pay no profit tax on distributed profit from IT services supplied outside Georgia; International Companies pay 5% on distributions with no dividend withholding, but need two years' track record and local staff.

• The 1% small business regime is for individual entrepreneurs, not companies, and excludes consulting of any kind.

• Since 1 March 2026, foreigners who work or run a business in Georgia need a work permit as well as the right visa or residence permit.

• The India–Georgia DTAA, signed in 2011, caps dividend, interest, royalty and technical fee withholding at 10%, and the MLI principal purpose test now applies.

Why do founders set up a company in Georgia?

Founders choose Georgia for speed and low costs first, and for a tax system that leaves reinvested profit untouched second. A company can be registered in a day, and running a team in Tbilisi costs well below Western Europe.

Who it suits, in our experience:

• IT services and software firms that will employ developers in Georgia and sell to clients abroad.

• Founders who are genuinely relocating and want a low-cost base with simple administration.

• Growing businesses that reinvest profits for several years before paying dividends.

Who it does not suit: founders who stay in India or the UK and run the company remotely, groups that need an EU passport for their entity, and holding structures that rely on a long list of 0% treaty rates without real activity. For a wider comparison, see our guide to 24 jurisdictions, Go Global with Greenwolf.

Which entity should you register in Georgia?

Most foreign founders register a limited liability company (LLC). Individual entrepreneur (IE) status is a personal registration rather than a company, and foreign groups that only need a presence can register a branch.

An LLC can be 100% foreign owned, with a single shareholder and a foreign director. There is no requirement for a local director or a Georgian partner.

How is a Georgian company taxed in 2026?

A Georgian company pays 15% corporate income tax only when profit leaves the company, as dividends or as payments treated as distributions. Georgia has used this Estonian-style model since 1 January 2017, and PwC's Georgia corporate tax summary, last reviewed in September 2026, confirms that retained profit is not taxed until distributed. Banks, credit unions and lenders pay 20%.

The 15% is applied to the gross-up of the amount paid out. A net dividend of GEL 85,000 triggers GEL 15,000 of tax, so the effective rate on the cash paid is about 17.65%. Expenses unrelated to the business, free supplies and certain representation costs are also taxed as deemed distributions.

Dividends paid between Georgian companies, and dividends a Georgian company receives from abroad (other than from preferential-tax jurisdictions), are exempt.

Other taxes to plan for:

• Withholding tax: 5% on dividends, interest and royalties paid to non-residents, 10% on most other Georgian-source payments such as services, and 15% to blacklisted jurisdictions, per PwC's withholding tax summary.

• Dividends to individuals: 5% withholding at source, on top of the company-level 15%.

• VAT: 18%, with registration once taxable turnover exceeds GEL 100,000 in any 12 months.

• Payroll: salaries are taxed at a flat 20%, plus 2% employer and 2% employee pension contributions.

What is Virtual Zone status in Georgia?

Virtual Zone Person (VZP) status is a certificate from the Ministry of Finance for Georgian companies carrying out IT activities. Profit from supplying information technology created by the Virtual Zone Person to clients outside Georgia is exempt from profit tax when distributed, as PwC's Georgia incentives summary sets out. Dividends to individual or non-resident shareholders still carry 5% withholding.

The exemption is narrower than its marketing: sales to Georgian clients, consulting and resale of third-party software are taxed normally. The certificate is typically issued within a couple of weeks.

What is International Company status?

International Company (IC) status is a Revenue Service regime for Georgian companies that provide certain services abroad, mainly software development, IT services, web hosting and some maritime services. An IC pays 5% profit tax on distributions, pays no withholding tax on dividends, withholds only 5% on employee salaries, and is exempt from property tax other than on land.

The conditions are tighter than for a Virtual Zone Person. The company (or its majority shareholders, or a non-resident it represents) needs at least two years' experience in the permitted activity, real local staff and premises in Georgia, and income almost entirely from the permitted activity, with ancillary income under 2%. Granting VZP status cancels IC status, so the two cannot be stacked.

What is the 1% tax in Georgia, and can foreigners use it?

The 1% regime is small business status for individual entrepreneurs: tax at 1% of turnover up to GEL 500,000 a year and 3% above that, according to PwC's Georgia individual tax summary. It is not available to LLCs.

Foreigners can register as individual entrepreneurs, but the regime has real limits. Activities requiring a licence, consulting of any kind (including IT, management and financial consulting), legal, audit, medical, architectural and staffing services are excluded. Since 1 March 2026 a foreign IE also needs a work permit to operate.

And the 1% only matters if you are actually tax resident in Georgia; if you remain resident in India or the UK, home-country tax applies in full.

Does Georgia have tax treaties with India and the UK?

Yes. The India–Georgia DTAA was signed on 24 August 2011, and caps withholding at 10% on dividends, interest, royalties and fees for technical services. Because Georgia's domestic rate on dividends, interest and royalties is already 5%, the treaty mainly helps with services fees, capital gains and residence questions.

Both countries applied the MLI to the treaty, with India's provisions effective from 1 April 2020 and Georgia's from 1 January 2020 for withholding and 2021 for other taxes. Its principal purpose test can deny benefits where obtaining them was one of the principal purposes of an arrangement, as our page on the principal purpose test explains.

The UK–Georgia treaty (2004, amended in 2010) reduces withholding further, to 0% in many cases. There is no treaty between Georgia and Montenegro.

Groups with revenue of €750 million or more should note that Georgia has not introduced a domestic top-up tax, so low-taxed Georgian profit can be topped up to 15% elsewhere under GloBE and the 15% minimum tax.

How do you register a company in Georgia step by step?

You register an LLC with the National Agency of Public Registry (NAPR), in person at a Public Service Hall or through a representative with a power of attorney. Registration itself usually takes one business day; allow two to six weeks for a bank account, tax registrations and any special status.

1. Choose the name, activity and a Georgian legal address (a real office matters for International Company status).

2. Prepare documents. The charter, passports, and for a corporate shareholder an apostilled registry extract and resolution, with notarised Georgian translations.

3. Register at the National Agency of Public Registry. The company receives its identification number, which is also its tax number. Standard registration is GEL 100 for next-day service and GEL 200 for same-day.

4. Open a bank account (see below).

5. Register with the Revenue Service for online filing, VAT if relevant, and apply for International Company status there. Virtual Zone status is a separate application to the Ministry of Finance.

6. Obtain work permits and residence for any foreign directors or staff who will work in Georgia.

How much does it cost to set up and run a Georgian company?

Georgia is cheap to run properly, but cheap registration is not a cheap structure. These are indicative market ranges, not quotes.

Budget roughly USD 2,500 to USD 7,000 a year for a small, active LLC, before salaries and rent.

Can a non-resident open a bank account for a Georgian company?

Yes, though in-person attendance is common and approval is not guaranteed. Large banks such as Bank of Georgia and TBC onboard foreign-owned companies but scrutinise those with no visible Georgian activity.

Banks usually ask for the charter, beneficial ownership details, passports, a business description with expected counterparties, and source-of-funds evidence. Real client contracts and a local office help most.

The commonest pain point for Indian and UK owners is an unexplained ownership chain or revenue from countries unrelated to the business. Our article on why banks challenge group structures before tax authorities do covers how to prepare.

What substance does a Georgian company need?

Enough to show that the profit belongs in Georgia. For International Company status, substance is written into the law: local staff and a real office. For Virtual Zone and standard companies, the test comes from your home country and your bank.

The decisive risk for Indian founders is the place of effective management. A Georgian LLC whose key decisions are taken in Bengaluru can be Indian resident and taxed at Indian rates on worldwide profit, with the Georgian distribution model offering no protection. Our page on place of effective management (POEM) explains how this is assessed.

Where a UK company owns the LLC, the UK controlled foreign company rules can attribute profit generated by UK people, and a Virtual Zone exemption is exactly the kind of low tax those rules look for. Read our guide to CFC rules and how offshore income is re-attributed.

IT businesses should also decide where the code and IP really sit. A Virtual Zone company that only resells software developed in India is unlikely to justify the profit; see our analysis of IP placement, DEMPE and the limits of tax-driven structuring.

Can you get residence in Georgia through a company?

Yes, but the rules changed in 2026. Georgia offers temporary residence for work, entrepreneurial activity and investment, and since 1 March 2026 anyone working or running a business there also needs a work permit alongside the matching visa or residence permit.

The main options:

• Work residence permit: for directors and employees of a Georgian company, now tied to a work permit.

• Entrepreneurial (business) residence permit: for owners of a Georgian business that meets a minimum annual turnover.

• Investment residence permit: for investment of at least USD 300,000 in Georgia, granted for up to five years, which can lead to permanent residence.

UK visitors can stay up to a year visa-free, without the right to work. Indian nationals generally need a visa or e-visa to enter, unless they hold certain valid visas or residence permits of the US, UK, EU or Schengen states.

Tax residence is separate: Georgia treats individuals as resident after 183 days in any 12-month period and taxes residents only on Georgian-source income. That helps only if you have really left India or the UK; our piece on how founder behaviour quietly shifts tax residency explains why.

How can an Indian resident set up a company in Georgia?

An Indian company invests under the overseas direct investment (ODI) rules, and a resident individual invests under the Liberalised Remittance Scheme within USD 250,000 per financial year, in a business that is genuinely operating. Our guide on how an Indian founder can fund an overseas company through ODI or LRS compares the two routes, including reporting through the authorised dealer bank.

On the way back, the Georgian LLC pays 15% (or the Virtual Zone or International Company rate) when it distributes, and withholds 5% on the dividend. In India, the dividend is taxed at the company's rate for an Indian parent, or at slab rates for an individual, with foreign tax credit for the 5% withholding. Credit for the Georgian company-level tax is generally not available.

So the Estonian model helps most while profits stay in Georgia to fund growth.

For UK owners, a UK parent's dividends are usually exempt, UK individuals pay dividend tax with credit for treaty-rate withholding, and UK CFC rules apply where a UK company controls the Georgian company.

What are the ongoing compliance requirements in Georgia?

A Georgian company files monthly, not annually, for profit tax: a declaration by the 15th of each month covering distributions in the previous month. Payroll withholding and pension contributions are also monthly, and VAT returns are monthly once registered.

The rest of the list:

• Bookkeeping under Georgian accounting standards, with annual financial statements filed with the Service for Accounting, Reporting and Auditing Supervision, by size category.

• A statutory audit for larger companies and public interest entities.

• Transfer pricing documentation where there are material transactions with related parties abroad.

Georgia vs Montenegro vs the UAE: which is better?

Georgia competes with Montenegro for relocating founders, and with the UAE for IT and services businesses.

Montenegro taxes profit as it is earned but at low rates and in euros, with an EU accession path; read our guide to company formation in Montenegro. The UAE costs more but carries more weight with clients and banks in the Gulf.

The Greenwolf view

Georgia rewards businesses that build something there. An Indian or European IT firm that hires twenty developers in Tbilisi, serves foreign clients and reinvests its profits gets a genuinely efficient structure, and International Company status rewards exactly that substance.

It punishes the opposite. A Virtual Zone company with no staff, invoicing for work done in India, is unlikely to survive POEM, transfer pricing or bank review. The 1% regime is a personal tool for residents, not a corporate strategy.

So we ask the stage questions first. Who will do the work in Georgia, and who will decide? Will profits stay to fund growth, or flow straight back home? Could the team qualify for International Company status in two years? Without clear answers, Georgia is a cheap registration with expensive consequences.

Setting up in Georgia with Greenwolf

If you are weighing a Georgian IT hub, an International Company application or a founder relocation, Greenwolf Advisors can test the commercial case, model tax in Georgia and at home, and then register, bank and run the company. Speak with a Greenwolf strategist before you choose a regime.

This article is general information, not advice for a specific case.