Undoubtedly, Georgia is a great country to live in; it’s open to immigration, it’s a few hours flight from Europe, it has a pleasant climate and it also has many tax advantages for its residents.
In Tax Free Today, we have already spoken about the different jurisdictions with territorial taxation. Instead of taxing the individuals global income, these countries only tax income that comes from the country itself, i.e. not foreign income, so these jurisdictions can be very attractive places to establish tax residence if you are a digital nomad or you run an online business.
Georgia is one of the 40 States in the world that apply territorial taxation and unlike what happens in Panama, Costa Rica, Paraguay, Thailand or the Philippines among many others, it has the advantage of being in Europe, a few hours flight from most European countries.
Undoubtedly, for those who have to or choose to stay in Europe, Georgia offers a great alternative to the non-dom systems in Malta, Ireland or the UK, to the special program found in Cyprus, and to jurisdictions that offer low taxation rates with fiscal residence, like Bulgaria, the Czech Republic or Romania.
Although the majority would classify Georgia as an Asian country, due to its geographical location, it is in fact a very culturally European country that has experienced a great economic boom in recent years.
The reason for its evolution is quite simple: They have created an attractive tax system and facilitated immigration.
As we previously mentioned, Georgia is a 3-4 hour flight from Central Europe, with flights costing around 200 euros. Its not only worth going there for its great cuisine, wine and nature, but there are also many other great characteristics of this country that attract people to visit.
More than one person has arrived there and fell in love with the country, causing them to miss their flight back and stay there without a return date.
This is how the capital, Tbilisi, an interesting mixture of ruinous Soviet architecture and modern construction, has been increasing its popularity among digital nomads and travelers.
You can currently live in this city with all the Western comforts, but at a much lower price.
Living in Georgia: requirements for immigration and tax obligations
Emigrating to Georgia is easy. Unlike in most other countries, it’s not necessary to make Visa-Runs. This is because Georgia is one of the most open countries in the world and has greatly benefited from this. For years, it has been the only country in the world that grants almost all nationalities an initial residence right of 365 days upon arrival in the country.
Its openness doesn’t mean that illegal entry is tolerated however, unlike what happens in some European countries.
For those who legally enter Georgia, register and wish to visit the country or do business there, can do so as they wish. The 365 days of residence also includes a work permit.
What makes Georgia interesting in this regard is the foundation of tax obligation. Tax obligation is also linked to a 183 day residence, but there are some advantages of this.
These 183 days in Georgia also includes stays for reasons of business, medical, study or even tourism purposes.
Thus, an occasional stay in Georgia even if it were for less than 183 days, would still be enough for you to obtain tax residency there.
However, Georgia is not the best option for nomadic businessmen for example, who are only looking to be in the country once a year (for these people it is preferable to live in Panama or, if they are citizens of the EU, Cyprus or Bulgaria). This is because you have to visit the country at least two or three times a year in order to obtain fical residency there.
Georgia also offers a high net-worth individuals (HNWI) programme for people with money, which doesn’t impose a minimum time to be a tax resident.
In order to be accepted into this programme you must own a property worth more than 3 million Georgian laris (at the time of this articles publication 3.13 laris equaled 1 euro), or if you have earned more than 200,000 lari annually in the last three years. The latter option may be relatively easy for entrepreneurs who have been doing business for some time.
Besides, all you have to have in order to apply for this programme is a normal residence permit.
People who want to remain in the country after one year of residence, can simply apply for a residence and work permit up to 40 days before the end of their first year. Based on the experiences of various sources this permit is not difficult to obtain and is renewed yearly, even if your income comes from outside of Georgia.
But these are not your only options, there are a lot of different visas there. For example, you could opt for the visa for investors for 300,000 lari. Also genuine “stateless people”, those without a passport or nationality, victims of human trafficking and students can remain in Georgia without problems.
You can obtain Georgian nationality after living there for 5 years. The 99 States that you can travel to and move around in without problems (also in the European Union and the Schengen area) are definitely an added value.
However, since double nationality is only permitted in exceptional cases, it’s not the best option for the nationality flag.
On the other hand, the alphabet itself doesn’t much help the learning of the countries difficult language, a language you would have to take an exam on if you wanted to obtain nationality.
Anyway, after living in Georgia for 6 years you can acquire permanent residence in the country.
Taxation in Georgia
Once you have acquired Georgian residency and obtained tax liability there, you have the advantage of paying hardly any taxes.
As we mentioned at the beginning, Georgia is the only European country that has territorial taxation, because it only claims taxes on income obtained there, at national level. However, the taxes there are more than reasonable, even if you obtain your income from local businesses.
Georgia largely draws its inspiration from the country that is currently pioneering the former Eastern Bloc; Estonia. The Estonian system of deferred taxation allowed the country to develop and achieve a long-standing reputation, something that Georgia is now trying to imitate.
By the 1st of January 2017, a similar system was introduced in Georgia, in which all companies profits are taxed at a fixed rate of 15%, and only if their members distribute dividends.
From that date, companies accounting was to be presented monthly, and the bureaucratic and administrative arrangement that previously characterized Georgian companies was considerably reduced.
The 15% tax rate also applies to transactions with partner companies in tax-free countries, as long as they do not include the market value of regular services, which complicates the exportation of income so as not to pay taxes in Georgia.
As well as the new deferred taxation model, there are also other available schemes for small entrepreneurs. Those who have a turnover of up to 30,000 laris and don’t have any employees, they are considered as a micro-entrepreneur and they don’t have to pay any kind of tax.
And then, with a turnover of up to 100,000 laris you qualify as a small entrepreneur where you pay tax rates of 3-5%, depending on the possible deductions available.
In any case, chances are that being a reader of the Tax Free Today blog you don’t own any businesses or companies in Georgia, which you sell from in other parts of the world. In this case, don’t forget that thanks to territorial taxation CFC rules are not applied either, so, with Georgian residence you can manage companies anywhere in the world (including in tax havens) and then receive the tax-free profits.
A fixed rate of 20% would also be applied to income obtained in the country, such as salaries for example. On the other hand, dividends, interest and licensing revenue in the country are only taxed at 5%.
Taxes on capital income only apply to the capital gains obtained within the country, and territorial tax is less than 1%. There are no inheritance, donation or property taxes. The VAT in Georgia is currently 18%.
The Georgian system also has another important feature. Unlike what happens in almost any other European country, in Georgia you don’t pay any kind of social security contributions. In this way, non-wage costs are maintained within very reduced limits for Georgian workers, who by the way have excellent levels of training. Payroll tax is also eliminated, Georgian workers income is taxed at a fixed rate of 20%.
Despite the reduced tax burden Georgia has entered into a double taxation agreement with more than 52 States, which may have some advantages for tax structuring.
Thus, taxes at the source (withholdings) on dividends from German, French and Spanish companies can also be reduced (most agreements have been signed with European or Asian countries, and there have yet to be any agreements made with Latin American countries).
Challenges and problems in Georgia
Of course, not everything is perfect in Georgia. Despite the economic boom of recent years, Georgia also has its problems. Its geographical location brings with it some inherent instability, as it is in the middle of the Caucasus powder keg.
The Russians invaded Georgia for a short period in 2008, causing the country to rely more on the EU and NATO ever since. Likewise, neighboring countries such as Turkey, Armenia and Azerbaijan, are also not what are considered model democratic states.
This is without focusing on neighbouring dissident states, such as Abkhazia and South Ossetia, or the long border with Chechnya.
If we look carefully on the map we can see that they are at least lucky enough to have the Caucasus Mountains, which are up to 5,000 meters high. These moutains create a natural border.
Despite the economic boom, Georgia remains a relatively poor country with major differences between its rural and urban population. Many of the countries citizens live at minimum levels of subsistence. There is a great predominance of agriculture there.
Georgia is known as the homeland of wine, already famous by the time of the Soviets and not only for the taste of its wine, but also for its fresh fruit and vegetables.
Undoubtedly, Geoarbitrage makes Georgia the perfect country for those whose income comes from outside the country, since the price of life there is minimal. You can buy your own home in the middle of the capital of Georgia, Tbilisi, for only €15,000.
Reasons to open a bank account in Georgia
Georgia also offers many possibilities with regard to the banking sector. While we may well be soon experiencing negative interests in Europe (i.e losing money by having it in the bank), in Georgia you can get interest rates of up to 10% with normal savings accounts.
In 2016, a one-year fixed term deposit in laris could also have had an interest of 14%. Despite the 4% inflation there, this investment is still worth it.
It is also possible in most banks to make deposits in euros and dollars, which generates 4 to 5% interest per year.
If you want to open a bank account in Georgia as a foreigner, you won’t need more than your passport. Of course, you will have to go in person. Large banks such as TBC Bank or Bank of Georgia offer modern online banking in English and a Visa card at your disposal.
By having a standard IBAN, payments to and from Georgia are relatively easy to process. Since it combines reduced taxation with high interest, the country is becoming increasingly valued in terms of carrying out banking business and transactions.
Business accounts for offshore companies can often also be opened in Georgia. The fact that you can use Private Banking if you own at least €10,000 does the rest.
In addition to the exciting possibilities that Georgia offers as a place of residence, a business headquarters and place to do business, don’t forget that the country is, thanks to its geographical variety, a really incredible place to travel and work.
It doesn’t matter if you prefer to ski in the Caucasus, or go swimming in the Black Sea, Georgia and its people will convince with their kindness and openness. Without a doubt, it is a country in which you can comfortably spend a long time in and is definitely worth visiting.
Do you assist people in buying property for residency?
We have a contact there that could help you, I can ask him and put you two in contact if you wish.
Hi,
Do you assist people get resident permit in Georgia? I wanna apply.
Hi there ,
Thanks for the information about Georgia my husband and I are from different nationalities and was deciding to get a permanent resident in any country so when I was browsing taught why not Georgia.
Can u give anyone who is trust worthy to find us all information about how to start as my husband from Pakistan but born in uae
I just put you in contact
Hey there, thanks for the article. Can you give me an advocate contact? So I can get more information and apply for residence etc?
Thanks
Hi Victor. Yes, I will send you an email with the contact we have there.
Hi, thanks for the article. I am looking for information on residency for freelancers. Would it be possible to get an advocate or lawyer contact from you?
I just put you with someone in contact.
Hi – I’m similarly looking for information about the residency process for freelancers.
Thanks!
I just wrote you an email.
Hello,
Could you also put me in contact with the right person pls?
I am a digital Nomad but looking for possibilities in a very secure but legal way/country.
Thanks
I just sent you an email.
Are there rent to own properties there? Also, you need to buy to setup a storefront business?
Hi, thanks for this article, interesting insight. I can demonstrate the income required for high-net worth residency. How do I get the residence permit which is also required? Is it the same as the initial entry visa granted for a year? Also, is it necessary to maintain a home addrein Georgia (a rent)?
Thanks.
Hello Lau. Yes, normally you should maintain the rent, you also have to spent 183 days there. If you wish I can put you in contact with someone in Georgia who could be able to help you.
Hi there,
great article!
i wanted to know if you could give me a name (or a way to find) of a reliable freelancer in Georgia. I am looking for web desing, phone sales, data entry etc etc
Hi Tax Free, I’m looking for help with setting up a business address, can you help?
Hi,thanks for the informative article
I will travel to Georgia soon along with my wife & my eight years old daughter and I plan to apply for residence / tax residency,
can you give me an advocate contact
I just put you two in contact.
Hi there, I am currently living in Amsterdam and a resident tax payer there. I’m a UK citizen but looking to move to a lower tax rate country in the EU. I can freelance and invoice companies globally.
Hi, very interesting article. Couple of questions – what are the tax implications of having a Georgian bank account and receiving foreign income but not being a Georgian tax resident? Simply being a British, French or italian resident for example?
Secondly, if one were to become a HNW tax resident, how easy/quick is that process? And does one need to own a property in Georgia?
Very interesting. I am going to Georgia for residency as well as tax residency. Can you advise me with someone that can help who knows the system?
thanks!
I just did so (per email).
I recently visited the Tbilisi and like the country very much h can I I get residency
I am also looking for information on residency for freelancers. Is it possible to get a contact person / company for help?
I just put you in contact with our partner in Georgia.
Hi, I have plans to start there with small business. Also would like to ask about the education system and medical if it is provided by government likewise other countries Canada, us etc
Hi, thanks for the article.
I am in Tblisi right now and would be happy to get a contact from your partner in Georgia.
Thanks!
I just put you in contact.
U only have to visit Cyprus or Bulgaria once a year in order to claim tax residency? And for Georgia this is two or three times? They don’t have the 183-days rule?
You have to stay 60 days in Cyprus. In Bulgaria it deppends, normally you must be there at least once every 3 months. In Georgia there are different programs, in one of them you just have to be there once every 183 days.
Would working remotely for an american company be classified as foreign sourced income in Georgia?
Yes
Hi, I would like to speak to someone about starting the process of becoming a resident in Georgia.
If you could put me in contact I would appreciate it.
Hello Luke. I have sent you an email and put you in contact with our partner in Georgia.
Hi, can you put me in contact with an advisor from Georgia as well?
I am interested in learning more about Georgian Tax, can you put me in contact with someone please
I just sent you an email.
your article mentions: “You can obtain Georgian nationality after living there for 5 years.”
well, to the best of my knowledge georgia doesnt allow citizenship to foreigners, not matter how long you stay there.
also, can you help me with the contact number of an attorney to process PR in georgia.
I can provide you with the email of our contact in Georgia, but he is not an attorney.
Hello, I have residence permit in Cyprus – yellow slip and thinking about Georgia. Can you give me contact to somebody for discuss?
Yes, of course. I just sent you an email.
HI
I want a contact too?
I just put you in contact.
Could you please put me in touch with your Georgia contact. I am planning to live in Georgia. Thanks.
Yes, I just sent you an email.
Hi, could you put me in touch with someone who provides services related to establishing tax residency in Georgia and tax efficiency with a Georgia tax residence.
Did taxation of worldwide income change? When I read older information from tax firms, they seem to say that a tax resident in Georgia IS taxed on worldwide income. Did something change or am I misunderstanding something?
I generate a lot of U.S. sourced dividend income, one thing not noted above is that there seems to be no tax treaty, so the U.S. government will withhold 30% tax on U.S. sourced dividends. This seems to make Georgia unattractive from this perspective at least. (I am not a U.S. Citizen).
Hello Clay. Just send us an email to info.librestado@gmail.com and we will put you in contact with our partner in Georgia.
Hi,
I manage a private portfolio and I am french (from Brittany). I’m currently in Cyprus (north part) and I plan to visit in mi December your country. I will favor Tbilissi and the center for international comprehension.
I have a limited company in Gibraltar. But I am less and less sure that’s the best tool due to tax haven and dividend double treaty. And also with the non resident status. There is also the difficulty to open broker account.
I have some investment in France (highest taxation in the world) and I plan to stay there 5 months a here.
If you could propose me a company structure to hold my financial asset. I do not intend to have customer only private partners.
Best regards
I would advise to book a consultation here: tax-free.today/consulting
Thanks for this interesting article.
I am considering relocating to Georgia. Grateful if you can please send me your Tbilisi contact’s details.
Hello Penelope. I just put you in contact with our partner in Georgia.
Please share the contact to me as well. Thank you.
Just did.
Thank you for the overview! Could you please introduce me to your lawyer? I plan to relocate to Georgia soon.
OK, just did so.
Hi could you please send me the info of your contact there? I’m a freelancer looking to obtain residency. Thanks.
No problem.
Hi
I plan to be a freelancer and reduce my tax outgo by opening banking relationship in Georgia. I need to also setup an irrevocable trust and an LLC for paying the lowest tax .Can you help.
Hello there, I am heading to Georgia this week to look into obtaining residency through property. Could you kindly put me in touch with your contact there? Thank you,
OK
Would love to have your contacts for setting up a business. Please send.
Just did so.
Great article. I’ve visited Georgia numerous times and really love Tbilisi. Could you please put me in touch with your contact there? I’m a freelancer and business owner looking to obtain residency. Thanks!
I just wrote you an email.
Hi, Can you pls connect me with your contact there, looking for info on establishing company there.
Yes, I’m putting you in contact.
Hi could you please send me info in establishing residency.
Will visit in late January then later in year move.
Thanks
Hello and thanks for the article. I wanted to ask a clarification question. If I have an ltd earning foreign sourced income and then pay myself a salary (as a Georgia tax resident) will I have to pay income tax on that salary or will it still be considered foreign earned income and pay 0 taxes?
Also I am interested in setting up a company in Georgia and exploring my options of becoming a tax resident there. Can you please let me know if you have lawyer and accountant contacts
Thank you.
It is considered national income. Yes, I’m putting you in contact with our contact in Georgia.
Hi, can you please share with me the contact of someone who can help with residence permit and tax advise in Georgia? Also a good accountant would be helpful, thanks a lot
Yes, we will be writing to you soon.
Dear,
What is considered non Georgian source income (and thus not taxable)?
Payment from companies and clients outside Georgia.
pero si me pagan , porque les envio (exporto) un producto desde Georgia?
esto cuenta como fuente de ingreso no Georgiana tambien?
gracias
Hello,
I had the information that there is no minimal time to stay in Georgia to obtain tax residency. Is that not true? I am not sure to understand correctly what you say about the 183 days.
Thank you
If you need a tax certificate you will normally have to stay there for at least 183 days. If you just need a tax identification number you can get it much sooner.
Hi all,
Does anyone know where I can get (download or whatever) a template of an Articles of Association for LLC?
Thanks a bunch
Hi,
I am looking for a contact in Georgia (lawyer) to help with work permit/residency as a freelancer for my husband. Will you please suggest someone?
Just ordered your encyclopedia. I am going to Georgia in March and would like to get in touch with your local contact that can help me with obtaining tax residence in the country. I work as a freelancer. I will stay in Batumi for a month, but I can of course make a trip to Tbilisi if needed.
We will be writing you an email shortly.
Can you help me out? I’m interested in relocating to Georgia and looking for a local contact to help me with residency and business set up.
Yes, just write to info.librestado@gmail.com
Could you please put me in your Georgia contact. I am planning to live in Georgia. Thanks.
Just write us to info.librestado@gmail.com
Please send info on retirement in Georgia. Many thanks
Hi, I am looking to move my tax residence from USA. Can you please put me in contact with someone that can help? Thanks in advance!
Hello,
I have some questions.
I’m Swiss and from Switzerland.
So I run an e-commerce business, we ship ecological products from China to Australia/Canada for now,
never lived in Georgia but
First question,
I just need to be sure how much weeks I need to live in Georgia for opening bank account, incorporate my business and getting a local address. Since I need to return some days for helping my business fathers in Switzerland..
and After that I can return in Georgia for a least 6 months or more But maybe I need to come now incorporate my business because my turnover getting big and Im not declared here it’s kinda risky 🙁
Oh last question, some people telling me that for the address registration I can use address to other person in Georgia like that he can use his address in Georgia for incorporate my business provisory? I’m not sure if it’s safe or not?!
Also if you can give me some good contact for incorporate my business and getting a residency it would be great!
Thanks a lot!
You can open your bank account and incorporate the company in few days. About everything else, we will write you an email.
Hello,
Just trying to understand a few things. If I have a Georgian tax residency with Georgian bank account and online business with foreign income coming for example from Greece to Georgian bank account which would be tax free but most of the time as EU citizen I live in UK. Do I have to pay taxes from my foreign income in UK as it is my second tax residency and I live in UK for more than 183 days? I understand UK and Georgia has a double tax treaty so I need to pay taxes only in one country but which would count?
Thanks in advance.
You will probably have to pay taxes in the UK if you have stronger ties there.
Hello, as a high net worth individual how many days will i have to spend in Georgia? Is there a minimum? Thanks
No
Georgia is a great place from almost any point, but not immigrant friendly! The big downside is that sometimes rules get changed and it affects even people applying with the older rules!
To name one, many people who obtained residency under the law of $35.000 minimum value, their residency was refused to be renewed after the rule changed to $100.000 minimum value of property. So they had to sell their houses underpriced and leave the country! Also a plenty of different residency cases (employed, company registration etc.) where a family member’s residency renewal was refused for an unknown reason (yes, they don’t feel like explaining any reason so at least you know what is happening!) And the family were scattered and had to sell their belongings and return to their original county!
Overall nice country, nice people, low prices. But rules get very tricky! I lived there for 3 years and I personally observed many short term resident people were kicked out gradually with NO reasonable evidence! In other words: tourists are welcome! Long term residents and investors are not welcome!
I wish someone had told this to me 3 years ago…
Hello, I’d also like a contact for opening an IT company (services provided to US companies from individuals residing either in or outside of Georgia), thanks!
We will contact you shortly. (Or you can also choose to write us directly info.librestado@gmail.com)
Hi
If I Georgian llc receive money from a foreign company as a dividend or return on investment… Is it subject to any capital gain tax or VAT.. The llc will ultimately use that money to take care of its expenses and whatever is the net profit we pay corporate tax on that… My question is only related to application of capital gain tax and VAT
Please clarify
Thanks
As a holding company it does not pay taxes but there may be withholding taxes due in the distributing company
Are you able to put me in contact with someone to obtain a tax residency permit? I lived in Georgia for over 185 days this year but am out of town for the time being. Thanks, would like to get it done quite quickly.
You can write info@sl-consulting.com for all Georgian queries
Hello,
Could you tell me, please, what should a company do to apply for Tax Free Shopping?
Thank you very much for the fantastic article, very detailed and definitely the best I’ve read on the subject. I am a location independent nomad and would love to get the ball rolling on establishing my business in Georgia as well as tax residency. Can you please put me in contact with someone who can assist me? I can definitely fly there whenever needed to be in person and ready to formalize the process. Again thank you so much for the great article, so helpful and has confirmed my decision to go for it!
I just sent you an email.
Could you please put me in touch also? I have a similar situation. Thank you!
Just did so.
could you put me in touch as well? Thanks in advance.
So my question is, I just opened my LLC in Georgia with my Georgian partner and I have an EU resident permit, I also have a personal bank account in Georgia so after my company makes net profit (paying the corporate tax 15 % & then when the dividends are distributed me and my partner, a 5 % is paid as dividend tax), once I receive the dividends to my personal Georgian bank account
1) Do I need to again pay tax in EU since I hold an EU residence permit even though I don’t move the money from Georgia bank account to EU bank account ?
2) If my company has paid dividend tax then if Georgia has DTA with EU when i receive the money to my EU bank account, do i need to again declare tax ? Because I don’t have a Georgian residence permit and not willing to obtain one but I have EU residence permit.
I am not qualified as a tax resident in Georgia just because I have a company and a personal account, but at the same time, If i don’t move my savings / money from Georgia to EU, do I still need to declare tax in EU ?