In our article about the Georgian tax system and rates, we mentioned that Georgia has a territorial flat tax regime with one of the lowest tax rates and brilliant tax incentives in Eastern Europe.
The personal income tax is 20%, while the corporate tax is 15%. While these are pretty low, the country has further tax incentives that can drastically reduce or eliminate your tax liability altogether.
The Individual Entrepreneur tax regime is one of the most attractive Georgian tax schemes for investors, entrepreneurs, and digital nomads seeking a business-friendly and tax-friendly jurisdiction to run business activities.
Individual Entrepreneur Status (IE)
Who Should Apply for IE Status?
The Individual Entrepreneur status is excellent for freelancers, digital nomads, and sole entrepreneurs seeking a primary European base to conduct self-employment or business activities.
What is the structure of Individual Entrepreneurship?
A Georgian Individual Entrepreneur is an individual, not a legal entity. An Individual Entrepreneur conducts business activities at their own risk, and their personal assets are not separated from their business.
What are the Benefits of the IE Status?
An IE status is not that lucrative, but combined with the Micro or Small Business Status, it can be the ultimate tool to drastically reduce or eliminate your tax bill.
How to Register as an Individual Entrepreneur in Georgia?
IE registration can be done in person or through power of attorney.
By trusting NOMOS with your power of attorney, you can simply send us the necessary documents and then sit back and relax while we handle all the procedures in Georgia.
Generally, an IE registration process looks like this:
- First, send us your notarized passport copy, power of attorney, and all the relevant information needed for the application.
- Then, we’ll submit the IE registration application to the House of Justice.
- Then, we’ll submit the application fee.
IE registration in Georgia can take one to five days. Once you receive the IE status, you can contact the tax services and apply for the Small Business status. Let’s see what the Small Business Status is all about.
Small Business Status
As we mentioned earlier in the article, the IE status is not that beneficial but combined with the Small Business Status, you can expect a huge tax cut.
Enjoy a 1-3% Tax Rate
An Individual Entrepreneur with an annual turnover of less than GEL 500,000 (roughly $195,000) may register as a small business and pay a 1% tax on their turnover. The rate increases to 3% if the annual turnover exceeds GEL 500,000. Moreover, the tax is payable monthly.
Such low tax rates seem even more lucrative when you realize the standard tax rate is 20%. Imagine how much you can save to re-invest in your business or spend on things that truly matter.
If your annual turnover exceeds GEL 500,000 consecutively for two years, you’ll lose the Small Business Status.
Micro Business Status
What’s amazing about Georgia is that you can entirely forgo your tax liabilities by registering as a micro business. Individual Entrepreneurs with no employees and less than GEL 30,000 annual turnover can apply for the Micro Business status and pay 0% tax on their business income.
Best Place to Set Up a Business
Ease of company formation, ridiculously low tax rates, business-friendly environment, strategic location, and skilled workforce make Georgia the best place to set up a business. Contact us if you want to enjoy 0-3% tax rates in a stable and prosperous Eastern European jurisdiction.
