Regime Rate
0%
on IT services to non-Georgian clients
Standard Top Rate
20%
without this regime
Duration
Ongoing
annual renewal
Target Profile
IT freelancers & companies
Georgia
Tax Savings Illustration
Example: €150,000 Annual Gross Income
Under Virtual Zone
€0
Standard Rate
€30,000
Annual Saving
€30,000
Eligibility Requirements
Who qualifies?
- Register a Georgian LLC — fast process (~1–2 days)
- Obtain Virtual Zone Person status from the Revenue Service of Georgia
- At least 80% of revenue must come from IT services to non-Georgian clients
- Maintain genuine business presence
- Personal tax residency in Georgia: 183+ days or principal residence
How the Regime Works
Full details
Under VZP status, the Georgian LLC pays 0% CIT on profits from qualifying IT services to non-residents. Retained/reinvested profits: no tax due. When distributed as dividends, the owner pays 5% dividend withholding tax. The owner as Georgian resident pays 20% flat income tax on salary/distribution. Georgia's 'small business' status offers a 1% rate on annual turnover up to GEL 500,000 for sole traders.
Regime vs Standard Rates in Georgia
| Tax Type | Standard Rate | Under This Regime | Saving |
|---|---|---|---|
| Corporate Tax (IT exports) | 15% on distributed profits | 0% | Full exemption |
| VAT on IT exports | 18% | 0% | Full exemption |
| Dividend Tax (owner) | 5% | 5% | Standard applies |
| Personal Income Tax | 20% flat | 20% flat | Standard applies |
| Social Security | 2% | 2% | Minimal |
Frequently Asked Questions
Who qualifies for the Virtual Zone?
The Virtual Zone is available to it companies and software developers providing services outside georgia. Key requirement: register a georgian llc — fast process (~1–2 days). The regime lasts Ongoing.
How much tax do I save with the Virtual Zone?
On a gross income of €150,000, standard Georgia income tax is approximately €30,000 (20% top rate). Under the Virtual Zone, it is approximately €0 — a saving of €30,000/year. Actual saving depends on income composition and individual circumstances.
How do I apply for the Virtual Zone?
Applications for the Virtual Zone are submitted to the Georgia tax authority, typically within the first year of establishing residency. You will need proof of prior non-residency, evidence of qualifying activity or income, and valid residency documentation. A qualified local tax advisor is strongly recommended for the application process.
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Disclaimer: This information is for general guidance only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making residency or tax planning decisions.