Company Formation & Tax in Georgia
One of the most founder-friendly tax systems in the region — profits taxed only when distributed, plus standout regimes for IT and small business.
Georgia has built one of the simplest and most reinvestment-friendly tax systems in the region. The headline feature is its Estonian-model corporate tax: profits are not taxed while they stay in the company — tax only falls due when profit is distributed. Add fast, remote-friendly registration and several targeted incentive regimes, and Georgia has become a popular base for IT and export businesses.
The Estonian model
Under the standard regime, corporate income tax of 15% applies only to distributed profits — retained and reinvested earnings are effectively taxed at 0% until distribution. This is the system's defining advantage: a growing company can compound its profits without an annual corporate-tax drag. The tax is administered by the Revenue Service of Georgia under the Ministry of Finance, through monthly reporting tied to distribution events rather than a single annual profit calculation.
The headline numbers
| Tax | Rate |
|---|---|
| Corporate income tax (on distributed profit) | 15% |
| Dividend tax (to individuals) | 5% |
| VAT (standard) | 18% |
| Personal income tax (flat) | 20% |
VAT registration becomes mandatory once turnover exceeds GEL 100,000 in any 12-month period; services supplied to clients abroad are generally treated as outside the scope of Georgian VAT (effectively zero-rated), which suits export-oriented businesses.
Special regimes worth knowing
- Virtual Zone — qualifying IT companies pay 0% corporate income tax on profits from IT services and software supplied to clients abroad, and 0% VAT on those exported services (the 5% dividend tax still applies on distribution).
- International Company status — reduced corporate tax (around 5%) and other reliefs for qualifying IT and maritime businesses meeting substance conditions.
- Free Industrial Zones (such as Kutaisi, Tbilisi and Poti) — exemptions from corporate tax, VAT and customs on qualifying international-trade activity.
- Small Business status — eligible sole proprietors pay just 1% of turnover (up to a threshold), a simplified nationwide regime.
Forming the company
The most common vehicle is the LLC; Georgia permits 100% foreign ownership with no requirement for a local director or shareholder, and the whole process can be completed remotely by power of attorney. Registration at the Public Registry is fast — typically around one business day, with full setup including tax registration usually within a week. Employers must enrol in the mandatory pension scheme (2% employer + 2% employee).
Frequently asked questions
Does Georgia tax company profits?
Only when distributed. The standard 15% corporate income tax applies to distributed profit; retained, reinvested earnings are effectively untaxed until distribution.
What is the Virtual Zone?
A status for IT companies giving 0% corporate income tax on profits from software and IT services supplied abroad, and 0% VAT on those exports (dividend tax of 5% still applies).
What is the VAT rate in Georgia?
The standard VAT rate is 18%; mandatory registration applies above GEL 100,000 of turnover, and exported services are generally zero-rated.
Can a foreigner own a Georgian company fully?
Yes — 100% foreign ownership is allowed, with no local director requirement, and setup can be done remotely.
Official sources
- Revenue Service of Georgia — tax law and registration
- National Agency of Public Registry — company registration
- Enterprise Georgia / Invest in Georgia
This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal or tax advice; regime eligibility carries conditions and rules change. Confirm against the Revenue Service of Georgia, or with an advisor, before acting.
Structure a Georgian company the right way.
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