Free Zones and Taxation in Georgia

Taxation regime in georgian free zones and incorporation process

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Georgian Free Zones

There are four free zones in Georgia, all established by Georgian law in free industrial zones. There are some headline advantages shared by all of the free zones along with some unique terms and services.

Advantages shared by all four include:

  • 0% Corporate Tax Rates
  • Virtual Office Services
  • No minimum capital/investment requirement
  • 100 % foreign ownership allowance
  • 100% profit repatriation
  • Remote registration services
  • Low Cost Electricity

Taxation In Free Zones​

All corporate taxes payable by the company amount to 0% in free zones, which means that the profit you earn remains untouched, and you can easily transfer it from your corporate bank account to your personal account.

This chart provides a basic comparison:

Taxes in Georgia For a Mainland Company For a Free Zone Company
VAT 18% 0%
Corporate Profit Tax 15% 0%
Tax on Dividend Withdrawal 5% 0%
Property Up to 1% 0%
Import 12% / 5% / 0% 0%
Export 0% 0%
Personal Income Tax20%20%

Important Notes

In spite of the tax advantages, it is important to have a full understanding of your options before deciding how to establish your company’s presence in Georgia or a Georgian Free Zone.

4 % tax with Georgia mainland

Georgian free zones are designed to attract export-oriented industries. To support this, the law sets an additional obstacle to selling products that are manufactured in free zones to Georgia. There is a 4% fee on any sales to Georgia from the free zone. Moreover, the import from Georgia to the free zone is also taxed similarly. There are exceptions for some import and some export. Detailed information can be found in the Law of Georgia on Free Industrial Zones.

Banking in Georgia – Mission Impossible

If you are considering having a company with a virtual office in the free zone, don’t look for banking services in a Georgian bank. Georgian banks haven’t been working with Free zone companies for more than a year now. Fortunately, we are able to offer different jurisdictions able to take the place of Georgian banks.

Be careful – Some activities are not exempt from taxes even in free zones

There are a number of activities and industries for which tax exemptions do not apply. These are primarily businesses connected to selling services instead of actual goods. Contact us for a free initial consultation to get a better picture of the whole free zone company incorporation process.

What Is Included In Free Zone Client Licenses?

  • International Trading
  • Industrial
  • Service
  • E-commerce
  • Consulting
  • Financial Services

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Free Zone Incorporation Process

The process of incorporation differs slightly from that required for setting up a mainland company. LLC is the most common form of ownership in Georgian free zones. Setting up an LLC in any of the free zones in Georgia requires 4 simple steps and two working days for registration. The procedures are as follows:

Application Form

We start by filling out a simple application form that contains basic information about your future company and your needs.

Company Registration

Once we have an application, we apply for company registration. This takes a maximum of one working day.

Bank Account

The next day, once the company has been registered, we assist you in opening a bank account in multiple banks, in multiple jurisdictions, and in multiple currencies.

Company Is Ready

The same day, after opening a bank account, we issue an invoice, and you pay for our service. At the same time, the free zone issues you an operating license.

FAQ – Frequently Asked Questions

What Kinds Of Activity Are Forbidden In Free Zones?

According to the law on free industrial zones the following activities shall be prohibited within a free industrial zone: a) manufacturing arms and ammunition, trading in arms and ammunition; b) manufacturing nuclear and radioactive substances, trading in nuclear and radioactive substances; c) bringing in, storing, manufacturing and/or selling narcotic and psychotropic substances; d) bringing in, storing, manufacturing and/or selling tobacco products and/or tobacco raw materials, except as provided for in the second paragraph of this article.

Do I Need To Renew My Free Zone License?

Yes, it is obligatory for Free Zone companies to renew licenses annually

How Can I Register A Company In A Free Zone Remotely?

You can send us a POA (Power of Attorney), and we will represent you in all required state institutions.

Are There Any Additional Fees For Having A Company In A Free Zone?

Depending on your needs, Free Zone administration can charge different rates for services. We can help select the best option to avoid paying more than is necessary.

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