If you are thinking about opening a business in Georgia, you have quite a few business structures you can choose from, with taxation as low as 0% in some cases.

This article summarizes the main options, including the two most common: LLC (limited liability company) and Individual Entrepreneur (sole proprietor). 

Based on your business activities and your goals you can assess the options and decide exactly which is the most favorable in your case. Your business structure affects how/what taxes are paid, how liabilities are determined, what kind of tax declarations you file.

Summary Of Business Structures

In this table you can read about each of the main types of business you can open in Georgia. For more details on each, please read the additional information in the article below.

Individual Entrepreneur (IE)

BEST FOR: Businesses with a single director and very low liability concerns. Freelancers.

This is a business run by one individual for their own benefit. An individual entrepreneur is a natural person, not a legal entity, who is liable to creditors personally and whose assets are not separated from the business.

As an IE (Individual Entrepreneur) your basic tax obligations are:

  • 20% Income tax on net income
  • 2%+2% pension contribution if you are a Georgian resident/citizen

An individual entrepreneur can operate under the name of its owner or under a chosen name. In any case, the business is not legally a different entity from the individual. That creates risks because personal assets might be used to pay your business liabilities, however, the advantages of individual entrepreneurship are its simplicity, ease of setup, and nominal costs.

For most IEs the other most attractive advantage is the incredibly low taxation that you may be able to qualify for.

If you are working as a freelancer, for example, being an individual entrepreneur in Georgia might be the most beneficial option since you would also have a possibility to get Small Business Status which means you pay 1% tax on your gross turnover. So long as your gross annual turnover is between 30,000 GEL and 500,000 GEL you might qualify. Higher turnover will not qualify; turnover below 30,000 GEL might instead qualify for Micro Business status (0% Tax).

Some Key Considerations With Small Business Status:

  • Business turnover of less than 500,000 GEL (approx $165,000 USD) annually
  • 1% to 3% tax on gross turnover, depending on total turnover. (For Georgian residents, you can pay  a voluntary contribution of 2%+2% towards pensions)
  • VAT of 18% if your VAT taxable turnover exceeds 100, 000 GEL in any 12 month period. Read More About VAT.
  • Be physically present in the Republic of Georgia at least 183 days per tax year and hence be a legal tax resident of Georgia.
  • You are the sole director (individual) of the business. Though you can have employees.
  • Your business activity must not be on the list of prohibited business activities
  • You do NOT need to be a permanent resident or citizen of Georgia.

Read our full guide for individual entrepreneurs and small/micro business status and learn how to register as an IE with small business status.

Limited Liability Company (LLC)

BEST FOR: Businesses with potential liabilities and 1 or more directors.

A Limited Liability Company is the most popular business form in Georgia. 

Different from individual entrepreneurs, the liability of an LLC is limited to its own assets. The company may be established by one person or by several partners, who might invest capital or start a company with zero capital. There are no minimum capital requirements in Georgia. The capital of an LLC is divided into shares. Unless otherwise noted in the charter, shares are freely transferable assets. 

Key Benefits of an LLC:

  • Legal Entity
  • Limited Liability means you will not be personally liable for debts if the company goes bankrupt or is sued
  • Zero capital investment required to open an LLC
  • One or more directors can own an LLC
  • Directors do not have to be Georgian residents or even visit Georgia to open an LLC
  • Employees can be from Georgia or elsewhere
  • Company profits are not taxed until they are distributed to individuals (and not taxed at all if distributed to another company)

Read our comprehensive guide to LLCs and find out how to register your LLC in Georgia

Taxes paid by LLCs and other Georgian legal entities

Typical taxes that apply to most legal entities in Georgia.

Key Tax Information:

  • 15% Corporate tax – at time of distribution 
  • 5% Personal dividend tax – at time of distribution
  • 0% Dividend tax when distributed to other legal entities in Georgia
  • 20% tax on employee salaries (If employees are Georgian residents, additional 2%+2% for pensions)
  • VAT of 18% if gross VAT Taxable turnover exceeds 100,000 GEL in any 12 month period. Read More About VAT.

Joint Stock Company (JSC)

BEST FOR: Large corporations with multiple shareholders

A Joint Stock Company is a legal entity whose liability to creditors is limited to its own assets and whose capital is divided into shares, classes and quantity, which are set by the company charter. 

Unless otherwise noted in the charter, the corporation can issue ordinary and preferred shares. Shareholders are not liable for JSC’s obligations. Usually, JSC is incorporated by large companies operating in Georgia;

What documentation do you need for registration? 

  • Name of the enterprise;
  • Legal form and address of the enterprise;
  • Name and surname of the enterprise partner (partners), address of residence and personal number, and where the partner is a legal entity its firm name, legal form, legal address, date of registration, identification number and details of their representatives;
  • Name and surname, address of residence and personal number of the person(s) entitled to manage and represent the enterprise;
  • Name and surname, address of residence and personal number of a person holding the General Trade Proxy – Procurist (if any);
  • Where the enterprise shall be represented by several authorized persons – they shall represent the enterprise jointly or severally;

Solidary Responsibility Company (SRC)

BEST FOR: This business structure is very rarely used, but for some very specific requirements it may be necessary.

A solidary responsibility company is a legal entity where several persons (partners) jointly, under one firm name, are occupied with the business operations. 

The partners of the SRC are liable before the creditors of the company directly and immediately with the whole property.

Different from an LLC, the firm name of an SRC shall contain at least a name of one partner. In a case where the SRC is owned solely by other legal entities then the name of the SRC will contain the name of at least one of those other legal entities.

Documents you need for registration of an SRC : 

  • Name of the enterprise;
  • Legal form and legal address of the enterprise;
  • Name and surname of the enterprise partner (partners), address of residence and personal number, and where the partner is a legal entity its firm name, legal form, legal address, date of registration, identification number and details of their representatives;
  • Governing body of the enterprise, decision-making procedure;
  • Names and surnames, addresses of residence and personal numbers of the persons entitled to manage and represent the enterprise;
  • Name and surname, address of residence and personal number of a person holding the General Trade Proxy – Procurist (if any);
  • Where the enterprise shall be represented by several authorized persons – they shall represent the enterprise jointly or severally

Limited Partnership (LP)

BEST FOR: Companies who want to raise capital for business from a small group of investors, especially family, friends or people in the community.

In Limited Partnership there are 2 kinds of partners, limited partners and general partners. Limited partners invest a certain amount of money and they are liable for that amount, while general partners’ liability is personal and not separated. You need at least one general and one limited partner to start a limited partnership.

Documents you need for registration:

  • Name of the enterprise;
  • Legal form and address of the enterprise;
  • Name and surname of the enterprise partner (partners), address of residence and personal number, and where the partner is a legal entity its firm name, legal form, legal address, date of registration, identification number and details of their representatives;
  • Details of limited partners equity shares;
  • Which partner is a limited partner (Commandit) and which – full (Complementary);
  • Covenants relating to limitation of the property right in equity shares of the LP limited partners;
  • Name and surname, address of residence and personal number of the person(s) entitled to manage and represent the enterprise;
  • Name and surname, address of residence and personal number of a person holding the General Trade Proxy – Procurist (if any);
  • Where the enterprise shall be represented by several authorized persons – they shall represent the enterprise jointly or severally;

Opening A Business In Georgia: Cooperative 

BEST FOR: Georgian citizens working in agriculture.

A Georgian cooperative is a legal entity whose partners’ liability shall be limited in proportion to the contribution made in the company capital.

Usually in Georgia, you will find agricultural cooperatives.

Only Georgian citizens can establish and become members of a cooperative. For this reason Expat Hub does not assist in matters relating to cooperatives.

Virtual Zone Status

BEST FOR: Certain types of IT companies

This is not a business structure or legal entity but is a special status that can be gained if your business works in certain sectors of the IT industry. If you qualify, you could benefit from 0% corporate tax and 0% VAT. You can read more about the Virtual Zone Status in our guide here.

Choose Your Business Structure

Because each business form comes with different tax consequences, you will want to make your selection wisely and choose the structure that most closely matches your business’s needs.

General information might be enough to get started thinking about your business setup, but individual nuances and requirements within each business type mean it’s worth discussing your exact situation with a tax adviser prior to deciding how to proceed. Mistakes in the initial setup phase can lead to unexpected tax implications later on. 

We can help you identify future problems and avoid them. Book a free tax consultation


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Janar K
Janar K

Managing Partner at ExpatHub.GE. With more than 15 years experience in planning business tax structures in countries around the world, Janar is our top expert on watertight structures with the minimum tax leakage.