How does Tax Residency in Georgia work?
Georgia has attractive tax rates for foreigners and also, a territorial tax system, where the government does not tax you in your foreign sourced income.
Georgia has two kind of residency: Legal and Tax residency. In order to receive above-mentioned benefits, you must be a Georgian tax resident. You can be a legal resident without being a tax resident or the other way round, or both simultaneously.
As a tax resident of Georgia, you pay tax in that country. In addition, Georgia has around 58 Double Taxation Avoidance Treaty. That gives Georgian tax residents potential benefits for their incomes received from countries, which are member of this treaty.
For example, if you have tax residency in Georgia and receive income from any member country of Double Taxation Avoidance Treaty, the local tax authorities will not tax you abroad on your rental income, dividends, capital gains, or any business that you possess abroad.
highlights
Criteria to obtain tax residency in Georgia
Spend at least 183 days in Georgia
You must spend 183 total days physically present in Georgia in any 12 month period. After that you are automatically a tax resident of Georgia for the whole year.
It does not need any application process or visit in any governmental institutions, it happens automatically. This rule applies to any person within the borders of Georgia.
OR
Be a High Net Worth individual
If you do not want to spend 183 days in Georgia, there is another way to obtain tax residency through the High Net Worth Individual (HNWI) program. To qualify for Georgian tax residency under the HNWI program, you need to meet three criteria:
- Total Wealth:
- Possess a total wealth of at least GEL 3,000,000 (approximately 1.15 million USD) anywhere in the world. This can include cash, real estate, stocks, bonds, cryptocurrency, or other assets. Alternatively, you can qualify by having an annual income of more than GEL 200,000 (approximately 75,000 USD) for each of the last three consecutive years.
- Assets in Georgia:
- Own assets in Georgia worth at least 500,000 USD. This can simply be cash in a Georgian bank account.
- Connection with Georgia:
- Have a Georgian residence permit or demonstrate an income of at least GEL 25,000 (approximately 7,500 USD) from Georgian business activities in the previous year.
Benefits
Benefits of Georgian Residency
Exemption for foreign sourced incomes
Please note, the tax code of Georgia defines which income is foreign sourced and hence tax free. Not all the income that is generated outside of the territory of Georgia is foreign sourced.
Double taxation avoidance treaty
Avoidance of a CRS reporting
Or will be shared only with Georgia, in case you have a bank account in some other country. Remember, Georgia does not tax foreign source income.
Low Tax Rates
Even if you have a local source income it can be taxed with 1% in case you register as an IE. Or if without any exemption, tax will neve exceed flat 20%.
Easy access to Georgian bank system
Becoming Georgian tax resident solves the problem. Once you are a tax resident in Georgia, banks treat you as a local, avoiding heavy compliance and procedures.
Get in touch
Step by step
Georgian tax residency as High Net Worth individual
Getting legal residency in Georgia
If you can not declare above mentioned income from Georgian source, than you must apply personally for legal residency in Public Service Hall in Tbilisi.
Obtaining tax residency certificate
Keeping residency status
Support
Here’s how we help you
Consultation before you start application
It might be a good idea to get a local company or sole entrepreneur status (almost tax free)
Assistance in collecting documents
Personal assistance during application process
Monitoring and renewing your residency status
If you don’t wish to manage all the paperwork process every month, we can take care of your monthly obligations.
Managing your tax liabilities
If you don’t wish to manage all the paperwork process every month, we can take care of your monthly obligations.