Compare seven routes against the business you will actually operate
Founders, independent professionals and international groups comparing realistic Georgian structures rather than selecting a headline tax rate.
- legal form and actual activity
- history, funding or R&D entry test
- profit, dividend, salary and VAT treatment
- foreign-owner and employee work/residence position
- annual evidence and status-retention burden
What the company or status is designed to do
Georgia offers several very different structures for an IT business: an IE with Small Business Status, an ordinary LLC, International Company Status, Virtual Zone Person status and the three innovation/R&D statuses. Compare the legal form, entry test, profit, dividend, salary and VAT position, residence/work implications and yearly compliance before choosing a route.
A headline rate never answers the whole question. The comparison below separates profit or turnover, salary, dividends, VAT, entry evidence, personal work/residence and continuing compliance.
Start with activity, people and customers—not the lowest headline rate
Georgia’s ordinary LLC model and special technology statuses solve different fact patterns. A reliable comparison models what is created in Georgia, where it is supplied, who performs the work, payroll, group history, intellectual property, R&D evidence and distributions.
- Standard LLC: 15% profit tax generally arises on distributed or deemed-distributed profit.
- International Company: 5% profit tax and 5% qualifying salary income, subject to permitted activities, history and substance.
- Virtual Zone Person: qualifying profit from IT created in Georgia and supplied outside Georgia may be exempt; non-qualifying income and costs must be separated.
- Innovative Startup, Innovative SME and R&D Service Provider: distinct evidence tests, staged or specialised incentives and continuing confirmation obligations.
Profit tax, salary tax, dividends and VAT are different questions
A status can reduce one tax without changing another. The model should show retained and distributed profit, salary and contractor payments, dividends, taxable or exempt supplies and the VAT place of supply. The owner’s personal tax position is separate from the company’s status.
- An ordinary LLC generally uses 15% distributed/deemed-distributed profit tax and 5% withholding on dividends to an individual.
- International Company currently combines 5% profit tax, 5% employment income tax and 0% dividend tax, but only within its qualifying framework.
- Virtual Zone does not remove ordinary payroll or dividend taxation and is not a blanket VAT exemption.
- Innovation and R&D statuses use their own staged or targeted mechanisms; read the continuation rules with the headline rate.
Each status asks a different factual question
International Company focuses on permitted activity, two-year history and Georgian substance. Virtual Zone focuses on qualifying IT created in Georgia and supplied outside Georgia. Innovative Startup focuses on innovation and qualifying finance. Innovative SME and R&D Service Provider use completed prior-year R&D and financial evidence.
- A new company is not automatically eligible for a status that requires history or a previous financial year.
- Foreign ownership is usually not the problem; the applicant’s real Georgian activity and evidence are.
- Tax registration, work rights and residence do not arise merely because a company receives a technology status.
- Changing contracts, staff or delivery locations can change the status result after approval.
Model the realistic routes before forming or restructuring the company
Send the ownership and group structure, product and service description, client countries, expected turnover and distributions, Georgian team plan and any funding, IP or R&D evidence. We compare the ordinary structure with only the special statuses that the facts can support.
- Explain what is built or delivered in Georgia and by whom.
- Separate product, licence, SaaS, support, implementation, consulting and R&D revenue.
- Include the expected number and citizenship of employees and how owners will be paid.
- Compare application cost and yearly evidence burden as well as the tax rate.
- Plan foreign-founder and employee work/residence needs alongside the company model.
Compare every official IT company route
Filter the official routes by operating profile, then test activity, people, customers, substance, eligibility dates and compatibility before applying a headline rate.
- Profit / turnover
- 1% qualifying turnover; 3% from the threshold-crossing month
- Salary / payroll
- Not a salary or dividend regime for the owner
- Dividends / VAT
- No company dividend; VAT registration and place of supply are separate
- Work / residence
- IE registration does not grant a work right or residence
- Entry evidence
- Permitted activity, prohibited-activity review, effective date, contracts and monthly records
- Continuing compliance
- Monthly returns, turnover tracking and continuing permitted activity
- Often considered by
- Independent professional carrying out a permitted individual business activity
- Profit / turnover
- 15% profit tax generally on distributed or deemed-distributed profit
- Salary / payroll
- 20% ordinary salary income tax; funded-pension rules where applicable
- Dividends / VAT
- Generally 5% dividend withholding to an individual; ordinary VAT rules
- Work / residence
- Ownership or directorship does not create personal work or residence rights
- Entry evidence
- Corporate records, accounting, contracts, beneficial ownership and tax filings
- Continuing compliance
- Accounting, annual reporting, payroll, VAT and corporate maintenance
- Often considered by
- Flexible operating company without a special-status dependency
- Profit / turnover
- 5% profit tax; qualifying property other than land may be exempt
- Salary / payroll
- 5% employment income tax; the rate does not change with employee citizenship
- Dividends / VAT
- 0% dividend tax; VAT remains transaction-specific
- Work / residence
- Separate work/right-to-reside analysis for every foreign manager and employee
- Entry evidence
- Two years of permitted activity through an accepted route, plus qualified people, core functions and costs in Georgia
- Continuing compliance
- Maintain permitted activity and substance; report material changes
- Often considered by
- Established IT business or international group with a real Georgian operation
- Profit / turnover
- 0% profit tax on supported qualifying exported IT profit
- Salary / payroll
- 20% ordinary salary income tax
- Dividends / VAT
- Generally 5% dividend tax; VAT depends on the supply and place-of-supply rules
- Work / residence
- Status itself gives no personal work or residence right
- Entry evidence
- IT created in Georgia, IP/product, foreign supply, customers and documented cost allocation
- Continuing compliance
- Separate qualifying export income and costs from local or non-qualifying activity
- Often considered by
- Software exporter able to prove Georgian creation and separate non-qualifying activity
- Profit / turnover
- Years 1–3: no special profit rate; years 4–6: 5%; years 7–10: 10%
- Salary / payroll
- Qualifying salary: 0% in years 1–3 (GEL 10,000 monthly cap per employee), 5% in years 4–6, 10% in years 7–10
- Dividends / VAT
- Dividend and VAT positions remain separate
- Work / residence
- No automatic work or residence rights for founders or staff
- Entry evidence
- Innovation plus GEL 100,000 qualifying investment or GEL 150,000 GITA grant in the two-year window
- Continuing compliance
- One-year status, annual renewal and GEL 5m/GEL 15m later-phase investment tests
- Often considered by
- Funded, genuinely innovative early-stage company prepared for annual confirmation
- Profit / turnover
- On distribution, the profit-tax base may be reduced by three times qualifying prior-year R&D expense
- Salary / payroll
- No general preferential salary rate
- Dividends / VAT
- No automatic dividend or VAT exemption; alternative reinvestment grant may apply
- Work / residence
- No automatic work or residence rights
- Entry evidence
- Prior-year R&D at least 5% of revenue and GEL 100,000, plus an accepted R&D evidence route
- Continuing compliance
- Annual confirmation to GITA by 30 April
- Often considered by
- R&D-intensive SME able to separate research from routine delivery
- Profit / turnover
- 5% profit tax within the approved framework
- Salary / payroll
- 5% tax on qualifying employee salary
- Dividends / VAT
- Dividend and VAT positions remain separate
- Work / residence
- No automatic work or residence rights for foreign staff
- Entry evidence
- Main activity code 72.1, at least 80% prior-year qualifying revenue, audit and assurance report
- Continuing compliance
- Indefinite status with annual filing to GITA by 30 April
- Often considered by
- Established company whose revenue is predominantly qualifying R&D services
What to send us first
You do not need to choose a status before contacting us. Send the business model and financial assumptions; we compare only the ordinary and special routes the facts can realistically support.
Send us first
- Ownership and foreign-group structure
- Product, service, IP and delivery description
- Client countries and expected revenue by service line
- Georgian founders, employees, contractors, premises and costs
- Expected salaries, dividends and reinvestment
- Existing history, export, funding, grant or R&D evidence
We prepare or coordinate
- Screen the seven realistic IE/company routes
- Model profit, salary, dividend and VAT questions
- Test history, substance, finance and R&D entry conditions
- Compare application and continuing-compliance burden
- Connect the structure with work, residence and family needs
Obtained or confirmed later
- Audit, assurance or qualifying funding evidence for the selected status
- Foreign corporate records and certified Georgian translations
- Authority application and decision records
- Bank KYC and operating contracts
- Annual renewal, confirmation and status-retention files
How the work usually proceeds
The exact order depends on the service and your documents. We confirm the steps and responsibilities before professional work begins.
- 01
model the activity and transaction flow
- 02
compare ordinary and special-status treatment
- 03
register the entity and tax accounts
- 04
prepare the status application and supporting file where applicable
- 05
maintain activity, substance, allocation and reporting evidence
How this may look in a real case
A SaaS group may compare ordinary LLC flexibility, Virtual Zone export evidence, International Company history and substance, or innovation status. The best result depends on what is built in Georgia, who performs the work, how profit is used and which evidence can be maintained.
What can slow the process down
We check these points at the beginning and flag gaps before filing, so you can correct them while there is still time.
- A route is selected from the lowest rate without modelling salary, dividends, VAT and non-qualifying activity.
- A newly formed company is assumed to satisfy a history or previous-financial-year test.
- Foreign ownership is treated as the main question while Georgian activity, people, costs, funding or R&D evidence are ignored.
- Company status is confused with personal work and residence rights.
- Application cost is compared but the annual audit, confirmation, allocation and record burden is not.
A clear recommendation and a managed Georgian process
We compare only the routes your activity, history, people and records can support, then show the tax, compliance and immigration consequences of the realistic choices.
ITResidency.ge is operated by ASSIO LEX & ASSOCIATES LLC, the Georgian legal and business-services provider for the engagement.
- Seven-route eligibility screen
- Profit, salary, dividend and VAT model
- Evidence and status-compatibility review
- Work and residence coordination
- Recommended route and implementation scope
Frequently asked questions
Which Georgian structure is best for an IT business?
There is no universal best route. The answer depends on legal form, actual activity, client market, Georgian people and costs, business history, funding or R&D evidence, payroll, distributions, VAT, work rights and the records the business can maintain.
Can an IE with Small Business Status pay 1% on every receipt?
No. The rate applies only after the status is effective and only to qualifying income from permitted activity. Excluded income, source, VAT, the GEL 500,000 threshold and prohibited consulting or other activities must be checked.
How is an ordinary Georgian LLC taxed?
An ordinary LLC generally pays 15% profit tax when profit is distributed or treated as distributed. Dividends to an individual are generally subject to 5% withholding and ordinary salary income is generally taxed at 20%. VAT is separate.
What is the main difference between International Company and Virtual Zone?
International Company requires permitted activity, an accepted two-year history route and real Georgian substance, and provides a broader 5% company and employment framework with 0% dividend tax. Virtual Zone focuses on supported qualifying IT created in Georgia and supplied outside Georgia; payroll and dividends remain ordinary.
What is the difference between Innovative Startup and Innovative SME?
Innovative Startup uses an innovation and qualifying funding test, one-year renewals and staged benefits. Innovative SME uses previous-year R&D expenditure, company-size and accepted evidence-route tests and has a different distribution or reinvestment support mechanism.
When is R&D Service Provider status relevant?
It is relevant where a Georgian company’s main activity is code 72.1 and at least 80% of previous-year revenue comes from qualifying R&D services, supported by audit and assurance evidence.
Does a special company status remove VAT?
No status should be treated as a blanket VAT exemption. VAT depends on the taxable person, supply, customer and place-of-supply rules. The position must be analysed alongside, not inferred from, the profit-tax status.
Does company status give the owner or employees residence rights?
No. Company tax status, the Georgian right to work and personal residence are separate. Foreign founders, directors and employees require their own work and immigration analysis.
Can a new Georgian company obtain a special status immediately?
It depends. International Company needs an accepted two-year activity-history route; Innovative SME and R&D Service Provider depend on previous-year evidence. Innovative Startup uses its own qualifying finance test. Company registration alone is not enough.
Can one company hold several special statuses?
Some combinations are restricted or incompatible, and parallel applications can undermine the intended treatment. Compatibility should be checked before applying or surrendering an existing status.
What information is needed for a useful comparison?
Send the ownership and group history, service and product description, client countries, revenue streams, expected distributions, Georgian team and costs, and any funding, IP, export or R&D evidence. We model only the routes those facts can support.
Can ITResidency.ge compare the tax and immigration plan together?
Yes. We can compare the realistic company or IE options, model profit, salary, dividend and VAT issues, and connect the selected structure with foreign-founder, employee and family work/residence needs.
