IT companies in Georgia: virtual zone, 5% tax, 1%

A sole trader with small business status pays 1% of turnover — the simplest route for a freelancer. A virtual zone person is an IT company whose profit from supplying the IT it creates outside Georgia is exempt from profit tax. An international company pays 5% profit tax, its employees' salaries are taxed at 5%, and dividends are not taxed.

For comparison: the standard profit tax is 15% (on distributed profit), and personal income is taxed at 20%.

The three regimes at a glance

Virtual zone person

• Only for legal entities — a sole trader can't get this status
• Apply online on the Ministry of Finance website; status within 10 working days, certificate within 2 more
• Profit from IT supplied abroad is not taxed; supplies within Georgia are taxed as usual
• No licences or permits are needed for the activity
• What counts as a 'supply abroad' is checked by the Revenue Service under its own practice — contracts should be reviewed in advance

International company

• At least 2 years of experience in a permitted IT activity — of the company itself, the foreign company it represents, or shareholders holding over 50%
• The work must really be done in Georgia: qualified staff and operating costs
• Apply to the Revenue Service; the Government decides; the status has no end date
• Other income must not exceed 2% of income from permitted activities in a year
• If these conditions are broken, the status is cancelled from the date it was granted — so tax is recalculated for the whole period

The right to work — from 2026

Since 1 March 2026, a foreigner working in Georgia as a sole trader or employee also needs the right to work — and a suitable residence permit or visa. Registering a company or a sole trader alone is no longer enough. The rule does not apply to holders of a permanent residence permit.