*ATTENTION: As of April 15th, 2023, new requirements for gaining HNWI status have gone into effect. A brief explanation of the changes is provided below.
The High Net Worth Georgian Tax Residency program is a unique opportunity for those with an income over 200,000 GEL (approx. 80,000 USD) or personal assets in excess of 3 Million GEL (approx. 1,200,000 USD) to claim tax residency in Georgia without even having to step foot in the country.
Bypass the 183 day physical presence requirement for tax residency and start benefiting from Georgia’s favorable tax regimes (such as the the 20% flat rate personal income tax, the 1% small business status tax scheme, and no taxation on most types passive income earned outside of Georgia). Moving your business and your personal tax residency to Georgia could help you significantly reduce your current tax liability.
The High Net Worth program is perfect for:
- Digital nomads who will not be in any country long enough to trigger tax residency, but want to avoid paying taxes in their country of domicile / citizenship.
- People not having tax residency anywhere who arrived in Georgia too late in the tax year to qualify for tax residency in that year (via the standard 183 day tax residency test), but need to gain tax residency in Georgia for that year to avoid taxation elsewhere.
It should be noted that getting Georgian Tax residency does not mean that you can then live in any other country you wish and avoid paying tax there. The decision on where else you may owe tax will come down to the local laws of the other countries you visit. Tax liabilities can arise for many reasons, not just based on physical presence in a country but also based on things like performing active work or business management while in a country.
You should consult with a local tax adviser in those countries to confirm how much time you can spend there without becoming liable for local taxes, as well as what sort of remote or local work can be performed without becoming liable for taxes.
If you move your personal tax residency to Georgia without also registering a company, you will be liable for the 20% flat tax rate on all personal income.
Who Is Eligible For Georgian Tax Residency Via The High Net Worth Program?
The following rules set the conditions for granting Georgian tax residency to a natural person with significant property (property is defined as “all items and intangible property goods, which can be purchased, owned, disposed of, and used by individuals without restriction”).
The program is available to individuals only (natural persons):
- Natural persons: Citizens of Georgia, foreign citizens, and stateless persons;
And those natural persons must meet the significant property requirement:
- A natural person whose proven property value exceeds 3 million GEL
- OR, their annual income for the last 3 years (whole calendar years, directly preceding the year you will want to obtain tax residency) exceeds 200,000 GEL.
Based on the Order of the Ministry of Finance published in March 2023, the Government of Georgia has altered the process of acquiring the High Net Worth Individual (HNWI) tax resident status. In addition to the above-mentioned Proof of Wealth requirements, the applicant shall now also be required to present proof of owning assets in Georgia valued at 500,000 USD or more. The Order went into force on April 15th.
In addition to meeting the significant property requirements, they must either:
- Have a legal residence permit OR Georgian resident ID card.
- Certify that he/she received income of 25,000 GEL or more in the tax year prior to the year of application, from a source in Georgia.
Tax residency via high net worth must be applied for every year and all relevant documents must be re-submitted for each annual application.
The application must be made during the year for which you are seeking tax residency.
So, to get tax residency for 2021, you must apply during the calendar year of 2021. Because of the time taken to apply, you should apply no later than mid-November to ensure completion of the application before the end of the calendar year.
If applying using the proof-of-income method, you would need to show evidence of your annual income exceeding 200k GEL per year for 2018, 2019, & 2020. Additionally, you would also need to show evidence that you have Georgian assets exceeding 500,000 GEL or equivalent in value. For showing evidence of Georgian-sourced income exceeding 25k GEL, you would only need to show evidence of income generated during 2020.
Documents Required To Apply
If you have Georgian legal residency or Georgian citizenship, you must submit:
- Application form;
- Georgian ID card;
- Document proving personal assets (significant property) valued in total in excess of 3M GEL including 500,000 GEL in Georgian assets (the document must be a valuation by an expert);
- OR documents proving 200,000 GEL annual income for the past 3 whole calendar years and documents that prove you have 500,000 GEL in Georgian assets (foreign bank statements will be accepted, but must be translated into Georgian).
If you do not have Georgian legal residency or citizenship, you must submit:
- Application form;
- Foreign Passport – translated to Georgian and notarized;
- Document proving personal assets (significant property) valued in total in excess of 3M GEL including 500,000 GEL in Georgian assets (the document must be a valuation by an expert, translated into Georgian);
- OR documents proving 200,000 GEL annual income for past 3 years and documents that prove you have 500,000 GEL in Georgian assets (foreign bank statements will be accepted, but must be translated into Georgian).
- Document “ცნობა შემოსავლების შესახებ” from the Georgian Revenue Service showing an income greater than 25,000 GEL from a Georgian source for the tax year prior to the year of application (i.e., if applying in 2021, you must already have generated that amount of income in Georgia during 2020).
The application form can be filled and submitted from inside your Revenue Service account, and the documents can be submitted digitally. However, after the online application is submitted, the original documents must also be submitted at the Revenue Service.
OR you can apply directly at the Revenue Service in person with all the required documents.
If you do not already have an RS Georgian tax number and online account, we can set this up for you using a Power Of Attorney and a notarized copy of your passport. Or you can visit the RS in person to do this.
If the application is accepted without any problems, you should be granted your tax residency within 30 working days (the exact wait time is not strictly adhered to by the RS). Otherwise, you will be notified of the additional requirements and must provide additional information as requested within 30 days in order to complete the application.
For this reason, we suggest starting your HNWI application at least 90 days before the end of the Georgian tax year (Dec 31st).
As stated above, for the High Net Worth program you must re-apply every single tax year if you wish to continue with Georgian tax residency.
If you need help with this application process, especially if you need a power of attorney to get you registered, please book a free consultation with us and we can help you complete the application.
Is This Program Going To Significantly Reduce Your Tax Liabilities?
The answer will depend on your exact business situation, how you earn income, and in which countries you will be physically present each year. For a personalized assessment, with no obligation, schedule a free consultation with one of our expert tax advisers.