Georgia's tax benefits

Georgia taxes local income at a flat 20%, but foreign-sourced income is exempt under its territorial system. The headline number most nomads have heard, 1%, applies to Individual Entrepreneurs under Small Business Status, on turnover up to GEL 500,000 (roughly $185,000) a year. That's different from an LLC, which pays 15% corporate tax, only on profits it actually distributes.

The baseline: 20% flat tax, but only on Georgian income

Georgia taxes residents at a flat 20% on income sourced inside the country. The part that surprises most newcomers: income earned from foreign clients or a foreign employer is generally exempt. If your income comes from outside Georgia, which describes most remote workers and online business owners, this is the first reason the system works in your favour.

The 1% regime: Individual Entrepreneur with Small Business Status

This is the number everyone's heard about, and it's real, but it's specific:

• Applies to Individual Entrepreneurs (a personal business registration, not a company)
• Once you have Small Business Status, qualifying turnover is taxed at 1%, not profit, turnover
• Covers up to GEL 500,000 (about $185,000) per year; income above that threshold is taxed differently
• No separate corporate, dividend, or social-security layer stacked on top
• Registration is typically a same-day process at the Public Service Hall

This is why Georgia shows up on almost every list of best countries for freelancers, consultants, developers, and other one-person service businesses.

The other option: forming an LLC

If you're building something bigger than a solo practice (hiring, raising, or planning to scale), an LLC is the more natural structure, but it plays by different rules:

• Standard corporate tax rate is 15%
• Under Georgia's "Estonian model," that 15% applies when profits are distributed, not while they sit retained in the business
• This rewards reinvestment: money you plough back into the company isn't taxed until you take it out
• Export-oriented businesses may also qualify for Free Industrial Zone status, with further exemptions

Which one is right for you?

• Solo freelancer, consultant, or remote employee running your own invoicing: Individual Entrepreneur with Small Business Status. Simpler, faster, and the 1% rate is hard to beat.
• Founder building a team, raising capital, or planning to scale past the SBS turnover cap: LLC. More overhead, but built for growth and reinvestment.

The fine print worth knowing before you register

• Small Business Status doesn't automatically exempt you from VAT, that's assessed separately once you cross the relevant threshold
• Becoming a Georgian tax resident (183+ days in a calendar year, or qualifying under the high-net-worth route) is a separate question from where your business is registered, worth getting right if you still have tax obligations elsewhere
• Not every activity qualifies for Small Business Status, it's worth checking your specific line of work before you assume the 1% rate applies

We handle IE and LLC registration as part of onboarding, and we'll flag early on which structure actually fits what you're building, not just which one sounds best on paper.