Georgia is becoming an increasingly attractive country for freelancers due to its simple tax system and favorable conditions for entrepreneurs. In this article, we will explore why opening an individual entrepreneur (IE) in Georgia is a profitable move for freelancers working with foreign clients and how to handle all the paperwork remotely.
Why is an IE in Georgia beneficial for freelancers?
1. Minimal tax – only 1%
Georgia offers a special tax regime for small businesses: if your annual income does not exceed 500,000 GEL (approximately $170,000), you pay only 1% tax on your income. This is one of the lowest tax burdens in the world for entrepreneurs.
2. Ease of registration
Opening an IE in Georgia remotely is possible without personally visiting the country. The process takes just a few days and requires minimal documentation.
3. Simple banking system
You can open a bank account in Georgia remotely, which significantly simplifies doing business. Georgian banks offer convenient tools for international payments, including multi-currency accounts and support for SWIFT/SEPA transfers.
4. Temporary Residence permit (TRP)
You can obtain a temporary residence permit in Georgia based on your IE if your turnover exceeds 50,000 GEL. This allows you to stay in the country freely and take advantage of its benefits.
5. Best tax system for tax residents
Georgia uses a territorial tax system, meaning foreign passive income (dividends, interest, rental income from abroad) is not taxed. If you become a tax resident of Georgia, you pay only 1% tax in Georgia when working with foreign clients and with proper tax planning.
How to open an IE in Georgia remotely?
1. Document preparation
- To open an IE in Georgia, you must visit the registry in person, but you will need a company that provides a legal address and helps set up the tax cabinet and obtain the preferential tax regime.
- Alternatively, you can handle everything remotely, using a power of attorney, without the need to personally visit the country.
2. IE registration
The process includes:
- Submitting documents to the Justice House (in person or through a trusted representative).
- Receiving the IE registration certificate (1-2 business days).
- Registering with the tax service and obtaining small business status (1% tax rate).
How to open an account in Georgia remotely?
After registering your IE, you will need a bank account. The process can be done online with some Georgian banks or through a trusted representative.
Steps for opening an account:
- Choose a bank (Bank of Georgia, TBC Bank, etc.).
- Submit an online application (in some cases, this step can be avoided with certain banks).
- After approval (if needed) – open the account and order a card.
- Receive account details for accepting payments.
Georgian banks offer convenient online banking, support for Visa/Mastercard cards, and easy access to international payments.
Temporary Residence Permit (TRP) in Georgia based on IE
Freelancers running businesses in Georgia can obtain a temporary residence permit (TRP). The main conditions are:
- IE registration and active business operations (turnover exceeding 50,000 GEL).
- Financial reports confirming stable income.
- Regular tax payments.
With an RP, you can legally reside in Georgia and enjoy the benefits of the local economy.
How to become a tax resident of Georgia?
To obtain tax residency in Georgia, you must:
- Live in the country for 183 days in a year or
- Under the HNWI scheme, if your assets exceed 3 million GEL or your income is more than 200,000 GEL per year.
The tax resident status allows you to avoid taxation on foreign passive income and pay only 1% tax on freelance activities.
Conclusion
Opening an IE in Georgia is a simple and profitable way for freelancers to optimize their taxes. The ability to open an IE remotely, pay only 1% taxes, easily open a bank account in Georgia remotely, and obtain Georgian TRP makes the country an ideal place for international business.
Thanks to Georgia’s tax residency and its territorial tax system, your foreign passive income will not be taxed, and your business will operate in a comfortable environment. If you want to reduce your tax burden and conduct business in a dynamic, growing country, Georgia offers some of the best opportunities in the world.