Moving to Georgia Checklist: 1% Tax Regime and Legal Steps

This moving to Georgia checklist covers the tax and legal steps for the 1% tax regime in the order they happen. The 1% rate applies only if your activity qualifies, your income is Georgian-source and Small Business Status is granted before you invoice, and your home country can keep taxing you after you leave. Each step below states what it requires and which mistakes cost money.

Moving to Georgia Checklist: Steps, Timing and Requirements

Step	When	What you need
Check home country tax rules	Before you leave	Deregistration, exit tax, extended tax liability, treaty status
Check that your activity qualifies	Before registering	Contracts and invoices checked against Resolution No. 415
Confirm your right to stay	Before travelling	Your nationality’s visa-free allowance
Register as an individual entrepreneur	On arrival	Passport, Georgian legal address, activity code
Apply for Small Business Status	Same day, before any invoice	Identification number from registration
Open a business bank account	After registration	Passport, registration certificate, proof of address, tax identification number
Do the client work in Georgia	From the first invoice	Lease, utility bills, travel records
File the declaration and reverse VAT	By the 15th of every month	rs.ge login, payment log, Georgian bank account
Apply for a tax residency certificate	After 183 days, once the tax year ends	Passport stamps, rs.ge account
Check the turnover thresholds	Every month, and continuously near ₾100,000	Running totals against ₾100,000 and ₾500,000
Keep records	At least three years	Invoices in two copies, payment log, proof of presence

Home Country Tax Rules to Check Before You Leave

Most countries tax their residents on worldwide income, and registering a business in Georgia does not change your tax residency there.

Ending Tax Residency in Your Home Country

Most countries require you to file a deregistration when you leave. Germany requires an Abmeldung, Italy requires registration with AIRE, Spain has Modelo 030 and the United Kingdom has form P85. Without the filing you can stay tax resident on paper after you have left.

Exit Tax and Extended Tax Liability After Departure

Some countries deem shares, funds or other qualifying assets sold at market value on the day residency ends. France, the Netherlands, Norway, Canada, Australia and Germany each have a version, usually above an ownership or value threshold.

Some countries also keep taxing a person who leaves for a low-tax country. Germany’s extended limited tax liability can apply to certain German-source income for up to ten years after departure. Spain can keep nationals taxable for the departure year and four more years, and Sweden and Norway presume continued residence for several years.

Tax Treaties and Social Security

Georgia has double taxation treaties in force with 58 countries, including the whole European Union and the United Kingdom. A treaty decides which country counts as your residence when both treat you as a resident, in a fixed order: permanent home, centre of vital interests, habitual abode, then nationality.

There is no treaty in force with the United States, Canada, Australia or Brazil, and the treaty signed with Russia in 1999 never entered into force. Without a treaty, both countries can treat you as their tax resident.

Social security is separate from income tax, and a tax treaty does not cover it. The United States taxes its citizens on worldwide income wherever they live and has no totalisation agreement with Georgia, so a US citizen pays the Georgian 1% and US self-employment tax, currently 15.3%.

Small Business Status Requirements and Prohibited Activities

The 1% rate comes from Small Business Status, which has no citizenship, residency or minimum-stay requirement. It requires annual turnover under ₾500,000, an activity that is not prohibited and Georgian-source income, and the 1% regime charges the tax on turnover with no expense deductions.

The prohibited list is set by Government Resolution No. 415 of 29 December 2010. It excludes:

• medical, architectural, legal and notarial services
• auditing
• consulting of any kind, including tax consulting
• currency exchange, banking, insurance and financial intermediation
• gambling
• production of excisable goods
• activities that require a licence or permit, or significant investment

The Revenue Service reads your registered activity code and the wording of your contracts and invoices. A developer who bills for software development qualifies, and the same work billed as technical consulting services falls into an excluded category. Several prohibited activities depend on wording in this way, so check your contracts before you register.

Income from employment is taxed at 20% whatever your status, and a contract with one client who sets your hours and manages you can be treated as employment.

Visa, Residence Permit and Labour Permit Rules for Entrepreneurs

Immigration status and tax status are decided by different agencies. The Revenue Service decides tax residency, and the Public Service Development Agency decides residence permits. Confirm the current rules for your nationality before you travel.

Visa-Free Stay in Georgia

Citizens of roughly 98 countries, including the EU, the United Kingdom, the United States, Canada and Australia, can stay up to 365 days per entry without a visa or permit, under the government’s list of visa-exempt countries. Neither individual entrepreneur registration nor Small Business Status requires a residence permit. If your nationality has a shorter allowance, plan the stay around it, because 183 days in Georgia changes your tax status only and gives no right to remain.

Residence Permit Requirements

Registering a business does not grant a residence permit, and a permit does not make you a tax resident. A permit is a separate application to the Agency, checked against real income or turnover.

Permit	Who it covers	Main requirements
Work residence permit	Entrepreneurs, founders, directors and employees	Monthly income of generally at least five times the minimum subsistence level. An employer also needs annual turnover of at least ₾50,000 per worker and VAT registration or equivalent proof of trading
IT-sector residence permit	IT employees and small-business entrepreneurs in IT	Two or more years of professional experience in the field. Pay of USD 25,000 a year or more, shown on two occasions that are 30 or more days apart

A new business with no trading history is an obstacle to the application, so for most first-time applicants the permit follows months after registration.

Special Labour Permit Rules From 1 March 2026

Amendments to the Law on Labour Migration introduced a work-authorisation system, with the main provisions in force from 1 March 2026. A Special Labour Permit is required in three cases:

• you employ non-Georgian nationals in Georgia
• you are an individual entrepreneur working with Georgian clients
• you are applying for a work or IT residence permit, where the labour permit is now a prerequisite

If you work for clients outside Georgia and do not want a residence permit, you need no labour permit, because the requirement depends on where the clients are. This boundary has not been tested in practice, so get advice on any client relationship that could count as Georgian.

The fine for employing a foreign national without a permit is ₾2,000 for the employer and ₾2,000 for the worker. If you already employ foreign staff, the deadline to get their permits in order is 1 January 2027.

How to Register as an Individual Entrepreneur and Get Small Business Status

Registration and the tax status are two applications. The Public Service Hall registers the individual entrepreneur, the Revenue Service grants Small Business Status, and with the registration alone you pay the standard 20%.

1. Prepare your passport, proof of a Georgian legal address (a lease or the property owner’s written consent) and your activity code.
2. Register at a Public Service Hall. Standard registration takes one business day and the expedited service is same-day. The Public Service Hall issues your registration certificate together with your identification number.
3. Apply to the Revenue Service for Small Business Status the same day, through a representative or your rs.ge account.
4. Wait for the status to be confirmed before you issue an invoice.

Confirm first that your landlord will sign the address consent, because a refusal stalls the registration. Both steps can also be done under a power of attorney notarised and apostilled in your country.

Opening a Business Bank Account in Georgia

Georgian banks open business accounts for non-residents with no citizenship, residence permit or minimum-stay requirement. The account can be opened only after the registration certificate is issued.

As an individual entrepreneur, you need these documents to open the account:

• a passport with at least six months of validity remaining
• the registration certificate
• proof of the registered address
• the tax identification number

The signatory generally has to attend the branch in person. The appointment takes one to two hours and approval typically comes the same day. The bank asks what the business does, who pays you and how much will pass through the account each month, and answers that do not match your registered activity are a common cause of refusal. You need the account from the first month, because the tax is paid from a Georgian bank account.

Georgian-Source Income Rules and Working From Abroad

The 1% applies only to Georgian-source income, which Article 104 of the Tax Code defines. Two of its tests matter for services.

Test	Who can rely on it	Evidence
The services are performed in Georgia	Anyone, including a non-resident	Travel records, a lease or utility bills
The provider is a Georgian tax resident and the client is abroad	Tax residents only, unless the work goes through a permanent establishment abroad	Your day count and a tax residency certificate

The client’s country and the currency of the payment do not affect the source. In your first months you are not yet a tax resident, so only the first test is available and the work has to be done in Georgia.

If you are not a tax resident and work the whole year from another country, you meet neither test. That income is very likely not Georgian-source, and the country where the work is done usually has the stronger claim to tax it.

Once you are a tax resident, income from foreign clients generally remains Georgian-source when you do the work on a business trip abroad. Resident individuals are also exempt from Georgian tax on income without a Georgian source.

Monthly Declarations and Reverse VAT From the First Month

The filing obligation starts as soon as you are registered, whether or not you have invoiced anything. Each month’s declaration has to reach the Revenue Service by the 15th of the following month. It is filed on rs.ge, where the taxpayer cabinet and the forms are in Georgian.

• A month with no income still needs a declaration, and a missed one accrues penalties like any late filing.
• Foreign currency is converted to lari at the National Bank of Georgia’s official rate on the date each payment is received.
• Filing the declaration and paying the tax are separate steps, and the tax is paid from a Georgian bank account by the same deadline.

Reverse VAT applies from the first month. For a service bought from a supplier outside Georgia, the VAT is your responsibility as the buyer and not the supplier’s. You have to declare 18% of the value of the service and pay it, on purchases like hosting, software subscriptions and work by contractors abroad, and this applies even if you are not VAT registered. A foreign software subscription of ₾300 a month adds ₾54 of reverse VAT to that month’s bill.

We file the monthly declaration and the reverse VAT for individual entrepreneurs on our Lite package, from ₾180 a month plus VAT.

Tax Residency in Georgia: 183-Day Rule and Residency Certificate

A business registration, a residence permit or property ownership does not make you a Georgian tax resident. The standard test is a day count: you are a tax resident once you have been physically in Georgia on at least 183 days of any unbroken 12 months that end in the tax year. The period is rolling, the days do not have to be consecutive, and the count starts again each tax period. The Revenue Service checks border-crossing records, so count your days from your passport stamps.

The tax residency certificate is the Revenue Service’s written confirmation of the status for one tax year. Foreign banks and tax authorities ask for it, and it is the evidence for a treaty tie-breaker claim.

You apply through your rs.ge personal account and there is no government fee. The Revenue Service has up to 30 calendar days to decide on a complete application, under Minister of Finance Order No. 633. The application covers a tax year that has fully or substantially ended, because the certificate confirms days already counted.

VAT Registration Threshold and ₾500,000 Turnover Limit

Track two running totals: taxable turnover over the last 12 months and turnover for the calendar year. Check the calendar-year total every month. When the 12-month total is close to ₾100,000, keep it up to date continuously, because the VAT application is due within 2 working days of crossing and a monthly check can miss that deadline.

Threshold	Measured over	What happens
₾100,000 of taxable turnover	Any continuous 12 months	VAT registration is mandatory, and the application is due within 2 working days
₾500,000 of turnover	One calendar year	The rate rises to 3% for the rest of that year and returns to 1% on 1 January
₾500,000 in two consecutive years	Two calendar years	The status is revoked from 1 January of the third year

Georgian VAT usually does not apply to services for a client outside Georgia. That is a large part of the reason most entrepreneurs who work only for foreign clients do not end up with a VAT registration unless they choose one.

The ₾500,000 limit is measured on gross turnover, so money passed on to subcontractors counts towards it. Published sources give two readings of the 3% rate. One charges it on the full year’s turnover, and the other charges it only on turnover above the ₾500,000 ceiling. On ₾550,000 the two readings give ₾16,500 and ₾6,500, and we plan clients around the higher figure.

Records an Individual Entrepreneur Has to Keep

With Small Business Status you do not have to keep formal income and expense books. The Tax Code requires a source document, in practice an invoice or a receipt, behind every transaction. Under Article 72, each source document identifies both parties, carries a date, describes what was supplied, states its value and exists in at least two identical copies.

The retention period is at least three years, counted from the end of the calendar year of the transaction, so an invoice issued in March 2026 is kept until at least the end of 2029. Also keep a payment log with the date and currency of each receipt, and the travel records, lease or utility bills that show the work was done in Georgia.

Once a VAT obligation arises, proper accounts of income and expenses are required in addition to the source documents.