Georgia is a very attractive country for non-resident freelancers, especially those working in the IT sector. Individual entrepreneurs from different countries opt for Georgia to benefit from the ease of regulation, low tax rates, and the loyal attitude of regulatory authorities. If you register as an independent entrepreneur (also referred to as an individual entrepreneur or sole proprietor), you have an opportunity to considerably save on taxes payable. Persons with the status of a small business have to pay only 1% of gross income on an annual basis, and no other obligatory requirements are set. Registration will take three days at the most, and it can be done remotely. We recommend opening a business account with a payment system to take advantage of seamless payments from across the world.
If you need more details, we will be happy to see you on our portal where you will be able to read a more detailed article on sole proprietorship registration and payment system account in Georgia for entrepreneurs. Feel free to explore different sections devoted to international business, banking, investment, asset protection, tax optimization, citizenship by investment, and so on. If you need professional advice, do not hesitate to book a free online meeting with our consultant to talk about your needs and preferences and select the best solution. We will help you set up a company and open a corporate account in almost any country without much hassle!
Business in Georgia: Main Advantages
Here are the main reasons why IT businesses and freelancers should pay special attention to Georgia as a beneficial jurisdiction for development:
- The locals are very friendly to foreigners
- You will not encounter any difficulties registering or starting your business
- You can register sole proprietorship online on a turnkey basis
- The contacts with tax/regulatory authorities are reduced to a minimum
- There is no corruption, and taxation is absolutely transparent
- There are no requirements for individual entrepreneurs
- The taxation system is really beneficial
- A really advantageous geographical location
- There is no automatic exchange of financial information
Looks like an ideal country to set up a business, doesn’t it?
Corporate Legislation in Georgia
There are two laws that regulate doing business in the country and registration as an individual entrepreneur:
- Law of Georgia on Entrepreneurs
- Tax Code
It may be useful to read them for your information or get advice from our experts on the main aspects.
Being an Individual Entrepreneur in Georgia
The concept is absolutely identical to most countries: an individual entrepreneur is a person who officially conducts business activities on his/her behalf and is liable for his/her debts with all personal property. A relevant entry in the Public Register of Entrepreneurs and Non-Entrepreneurial (Non-Commercial) Legal Entities marks the moment of acquiring the individual entrepreneur’s status.
Mandatory Payments
- VAT (18%) is payable if your annual turnover exceeds USD 30,000.
- The standard tax rate for sole proprietors in Georgia is 20%.
- As for contributions to the pension fund (2% payable by the employee and 2% payable by the employer), they are only mandatory for residents.
Small Business Status
Under the local laws, non-residents have the right to register as independent entrepreneurs and obtain the status of a small business in Georgia. As a result, foreigners can reduce the tax burden to 1% on the condition that the annual turnover of their business does not exceed 150,000 US dollars (if it does, 3% is payable, which is still low). And if your turnover turns out to be higher than the limit set two periods in succession, the status of a small business will be canceled.
Restrictions on Small Businesses
If you have the status of a small business, you will not be allowed to engage in the activities below:
- Those that require considerable investments
- Any licensed activities
- Currency and foreign exchange
- Architecture
- Medical activities and services
- Scientific work and research
- Agriculture and forestry
- Gambling
- Production of excise goods
- Staffing
- Lawyer, audit, notary, and consulting activities (including tax consultancy)
A Bank Account for an Individual Entrepreneur
Opening a corporate account with a regular bank in Georgia has become a hard task to accomplish in recent years if you are a non-resident. And though this is a certain obstacle for your business, it is not that difficult to overcome it.
Under Georgian laws, a foreign individual entrepreneur is allowed to have accounts in banks or payment systems based abroad. It helps non-resident IT specialists/freelancers to easily become a sole proprietor in Georgia and receive periodic payments. You will independently specify the information about business turnover in the payment system and accounts abroad in the declarations you submit and independently pay taxes.
Please get in touch with our specialist to find out how to open a corporate account with a Georgian payment system.
How to Become an Individual Entrepreneur in Georgia
No matter what country you come from (you can even be a stateless person!) – you can become an individual entrepreneur in Georgia. All you need to do is contact the House of Justice and submit a passport (in person) or appoint a trusted representative to complete the procedure remotely for you. If you choose the second option, you will save the time and money spent on flying to Georgia.
Main difficulties you may face:
- You don’t know Georgian. All the documents required for individual entrepreneur registration are completed in Georgian.
- Legal address. You will need to confirm that you have a legal address in Georgia (a sale/rental agreement or a notarized consent of the property owner).
- Travel expenses. Even though you will easily cross the Georgian border as it is open to foreign entrepreneurs, you will still need to pay for the plane ticket and accommodation. All this can be avoided if you opt for a trusted representative.
Sounds difficult? Simply get in touch with us using the above link, and we will easily solve all these problems and make you an official independent entrepreneur in Georgia in a matter of three business days.
