The High Net Worth Georgian Tax Residency program is a unique opportunity for those with an income over 200,000 GEL (~$65,000 USD) or personal assets in excess of 3 Million GEL (~$1M 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 LLC taxes of 15% corporate income tax, 5% dividends tax and no taxation on profits until the moment of distribution) moving your business and your personal tax residency to Georgia could see 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 who arrived to 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 tax residency for that year to avoid taxation elsewhere.
- Any other purpose where you need to be a tax resident somewhere other than where you typically reside.
It should be noted that getting Georgian Tax residency does not mean you can then live in any other county you wish and just not pay tax there. The decision on where else, other than Georgia, 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 management on a business 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 and what sort of remote or local work could 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 exceeds 3 million GEL
- OR their annual income for the last 3 years exceeds 200,000 GEL.
In addition to meeting the significant property requirements, they must either:
- Have a legal residence permit OR Georgian resident ID card.
- Certifies that he/she receives income of GEL 25,000 or more during the tax year from a source in Georgia.
Tax residency via high net worth must be applied for every year and current documents must be re-submitted for each application.
Applications 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 income proof method, you would show evidence of annual income for 2018, 2019 & 2020, exceeding 200k GEL per year. If showing evidence of Georgian sourced income exceeding 25k GEL, you would show that income having been generated during 2021 only.
Documents Required To Apply
If you have Georgian legal residency or a Georgian citizenship, you must submit:
- Application form
- Georgian ID card
- Document proving personal assets (significant property) valued in total in excess of 3M GEL (Document must be a valuation by an expert)
- OR documents proving 200,000 GEL annual income for the past 3 years. (Foreign bank statements will be accepted – 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 (Document must be a valuation by an expert, translated to Georgian)
- OR documents proving 200,000 GEL annual income for past 3 years. (Foreign bank statements will be accepted – translated into Georgian)
- Document “ცნობა შემოსავლების შესახებ” from the Georgian Revenue Service showing greater the 25,000 GEL in income from a Georgian source during the year you are applying to be tax resident (ie. if applying in March 2021, you must already have generated that Georgia income in Jan/Feb 2021)
The application form can be filled and submitted from inside your Revenue Service account and the documents submitted digitally. The original documents will then be requested to be submitted to the Revenue Service.
OR you can apply directly at the Revenue Service with all the 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 problems, you should be granted your tax residency within 7 working days. Otherwise, you will be notified of additional requirements and must provide additional information as requested within 30 days in order to complete the application.
The High Net Worth tax residency must be re-applied, as above, 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, book a free consultation with us and we can help you complete the application.
Is This Program Going To Significantly Reduce Your Tax Liabilities?
It can depend on your exact business situation, how you earn income and in which countries you will be physically present each year. For a personalised assessment, with no obligation, Get a free consultation with one of our expert tax advisers.