Individual Entrepreneur in Georgia
PAY ONLY 1% TAX ON INCOME UP TO EUR 125 000
- FOR FREELANCERS
- STARTUPS
- SMALL BUSINESS OWNERS
- DIGITAL NOMADS
- EXPATS
- DIGITAL MARKETERS
- CRYPTO ENTHUSIASTS
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Individual Entrepreneurship (Sole Partnership)
Individual Entrepreneurship is the best business structure for freelancers, digital nomads, expats, and sole entrepreneurs from all over the globe. A Private Entrepreneur is a person, not a legal entity, who operates his/her own business and is the company’s sole proprietor. There is no limit to the number of activities that may be carried out by an Individual Entrepreneur. An Individual Entrepreneur’s assets are not separated from his/her business.
There are many reasons for wanting to do business in Georgia, and being an Individual Entrepreneur offers additional advantages, such as the 1% tax on an income falling between GEL 30,000 and GEL 500,000 (approximately EUR 125,000). The 1% tax rate is not, however, granted automatically. The Entrepreneur must apply for SMALL BUSINESS STATUS to receive the benefit. If your turnover is less than GEL 30,000 (approximately EUR 7500), then you qualify for Micro Business Status and your tax rate is 0%.
Key Benefits for Individual Entrepreneurs in Georgia
0% to 1% Income tax instead of 20%
If your annual turnover does not exceed GEL 500,000, you pay 0% or 1% instead of the usual 20%. More specifically, if your business turnover is not more than GEL 30 000 per annum, you qualify for Micro Business Status and your income tax rate is 0%. If your turnover is from GEL 30,000 to GEL 500,000, you qualify for Small Business Status and your tax rate is 1%.
No Citizenship Limitation
An Individual Entrepreneur can come from anywhere. Georgian Citizenship or Permanent Residency are not required.
No Limitation on the Number of Activities
An Individual Entrepreneur can be active in multiple fields. There is no limitation on the number of activities your business is involved in.
Key Criteria for an Individual Entrepreneur in Georgia
You must be the sole owner of a business in Georgia or another country
Your company’s annual turnover must not exceed GEL 500,000
Your business activity must not fall within the list of prohibited activities for Individual Entrepreneurs
You must submit monthly declarations to the Revenue Services of Georgia and pay 1% tax on a monthly basis
Steps For Attaining Small Business Status
Step
Registration as an Individual Entrepreneur
You must register as an Individual Entrepreneur at the Public Service Hall in Tbilisi, Georgia.
Step
Opening A Personal Bank Account In Tbilisi Georgia
The individual with Private Entrepreneur status running the company in Georgia must have a personal bank account.
Step
Getting Status
After registering as an Individual Entrepreneur, you must apply with the Revenue Service in Tbilisi for the status of Small Business Owner.
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*Schedule a first 30-minutes free online consultation
Here’s How We Help You
Assistance in the Registration Process
We help you register as an Individual Entrepreneur in the Public Service Hall and acquire Business Status from the Revenue Service in Tbilisi.
Personal Assistance with Georgian Governmental Authorities
Our personal consultant helps you register with the authorities. We help you with the application forms and guide you during the process in order to simplify it.
Assistance Gathering Documentation
With the help of our experienced team, we collect all the necessary documentation quickly.
FAQ – Frequently Asked Questions
Who Can Receive SMALL BUSINESS Status In Georgia?
– Resident of any country who decides to register as an individual entrepreneur in Georgia
– Individuals whose annual turnover does not exceed GEL 500,000 in two consecutive years
What If My Annual Turnover Exceeds GEL 500,000?
If your annual turnover exceeds this amount, your tax rate rises to 3% from the month you get more than GEL 500,000 turnover and continues until the end of the year.
For example: Your turnover exceeded GEL 500,000 in September 2021. Your tax rate becomes 3% from September till December 2021. Beginning in January 2022 you return to a 1% rate until turnover exceeds the limit again.
What Kind Of Business Activities Are Allowed For SMALL BUSINESS Status Owners?
– Marketing services
– Cryptocurrency trading
– Online trading
– Intermediary services
– Any other services that are not specified in prohibited activities
What Kind Of Business Activities Are NOT Allowed For SMALL BUSINESS Status Owners?
– Activities requiring special licensing
– Production of excise goods
– Gambling
– Financial services and operations
– Advocatory services, Law firm
– Tax and legal consulting
– Foreign exchange transactions
– Medical services
– Architectural services
– Auditory and notary services
– Beauty centers
– Car repair services
What Is The Time Frame For BUSINESS Status Registration?
An individual entrepreneur can be registered and receive status in a day. Small business status and the 1% tax rate, however, are only valid from the first day of the next month.
What Kind Of Incomes Are Covered By The 1% And 3% Tax Rates?
All incomes that are received from selling a service or product.
What Kind Of Incomes Are Not Covered By The 1% And 3% Tax Rates?
– Incomes in the form of a salary
– Incomes from property leasing
– Incomes from loans
– Profit from gambling
– Incomes from gifts
– Profits from selling property, vehicles, securities
– Incomes from inherited property
– Incomes in the form of dividends
– Incomes from interest rates
– Incomes in the form of royalties
– Incomes from debt forgiveness
– Incomes received from the sales of partner shares
How Often Do I Pay 1% Tax, And How Do I Report It?
The 1% tax rate is payable every month (no later than the 15th day of the next month). Simple tax declarations must also be sent no later than 15th of each month. Apart from that you should keep a special journal proving all of your expenses. Our accountant can handle all the paperwork if you don’t want to do it yourself
How Many Days Should I Plan To Be In Georgia? Can I Receive IE Status Remotely?
You need to plan to be here for a minimum of 3, an average of 4, and a maximum of 5 days.
But a visit is not required. We can open both a company and a bank account within a week with just a Power of Attorney.
How About Banking For IE?
A bank account for an Individual Entrepreneur can be opened both in Georgia and in Digital Banks
When Is My SMALL BUSINESS Status Cancelled?
– When you contact the Revenue Services office to cancel it
– If your annual income exceeds GEL 500,000 per year in two consecutive years under active SMALL BUSINESS status
