Small Business Status in Georgia
Small business
Taxes & Pros
In Georgia, freelancers and small businesses can benefit from a 1% income tax rate by registering as an Individual Entrepreneur (IE) and obtaining sbamm business status with the Revenue Service (RS). This special tax rate is available to businesses that meet certain criteria and can provide significant savings for business owners.
The 1% income tax rate is significantly lower than the standard income tax rate of 20%, which can have a huge impact on the profitability of small businesses. This can enable business owners to retain more of their income and invest it back into their business to support growth and development.
It’s worth noting that this special tax rate is an ongoing initiative by the government of Georgia to support the development of small and micro-businesses. This will help them grow and thrive by retaining more of their income and not being burdened with high taxes
Income Tax 1%
no VAT, if you are providing service outside Georgia
You are the only director of your business
Your yearly business turnover is less than 162 000 dollars (500 000 Gel);
if you exceed USD 165,000, you will pay only 3% income tax.
Small Business Taxes in Georgia
List Of Prohibited Activites
Activities that require licensing or permission.
Activities, the implementation of which requires significant investment (production of excise goods).
foreign exchange operations
Medical, architectural, legal or notarial, auditing, consulting (including tax consultants) activities.
Gaming business.
Staff provisioning
Production of excise goods.
exceeding USD 165,000 for 2 consecutive years
Mistakes
Mistakes To Avoid
It is important to correctly determine your status, are you a freelancer or an employee? Being an employee means that you are working for someone else and receiving a salary or wages for your work. As an employee, you are not responsible for paying self-employment taxes, and your employer is responsible for withholding taxes from your paycheck and remitting them to the government.
On the other hand, freelancers are self-employed individuals who are responsible for their own taxes. They are not entitled to the same benefits as employees and are not protected by labor laws.
It’s important to note that, if you are an employee and register as a freelancer, you cannot use the above-mentioned tax benefit.
To avoid these mistakes, it’s essential to correctly determine your status as a freelancer or an employee.
If you’re unsure about your status, we recommended to contact us, we will review your main activity, and will inform you if you can use the 1% tax benefit as a Freelancer.
Visit Georgia?
Should I visit Georgia?
It is important to note that, while there is no requirement that you must be a resident of Georgia or live in Georgia for 183 days to qualify for the IE status, it can be beneficial for your business to have a presence in the country.
- If you plan to travel to Georgia from time to time, it can prove that you are an expat freelancer and can help you to qualify for the IE status.
- If you plan to spend more than 183 days in Georgia, it can be the best choice as it will demonstrate a clear presence in the country.
- If you plan to get a residency permit in Georgia, it can be an excellent choice as it will further demonstrate your presence in the country.
if you will not travel to Georgia at all, it may be suspicious, that you are using only our legislation for the purpose to avoid taxes in your country (in perspective of the international tax system and also in the Georgian Tax system).
Pricing
CONSULTATION
- General tax planning
- Advice on legal matters
- Advice on tax matters
- Advice on accounting matters
REMOTELY REGISTRATION
- Provide a draft Power of Attorney
- Assistance in issuing an official Power of Attorney with a notary public
- Consultation and collection of all documents
- Registration as an Individual Entrepreneur (IE).
- Obtaining a small business status.
- Opening the company account on the official web portal of the Revenue Service
- State fees for registration
- English extract from the registry
- Annual Virtual office
IN PERSON REGISTRATION
- All services are included in the “Remotely”
Whether you opt for remote or in-person registration, our fees encompass the annual virtual office fee. In compliance with Georgian regulations, every legal entity must possess a virtual office. Our standard pricing stands at 10 Euros per month (120 Euros annually). however, if you already possess a physical address in Georgia suitable for your legal entity registration, our service fee will be reduced by 120 Euros.
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