Your Guide to the 1% Small Business Tax in Georgia for Foreigners

Understanding the 1% Small Business Tax in Georgia

Georgia’s flat 1% small business tax has been attracting remote workers and freelancers for years, but 2026 has brought a sharper focus — and more scrutiny. The Georgian Revenue Service has tightened enforcement on who actually qualifies, and a wave of new arrivals in 2024–2025 means the registration process is no longer as quick as it used to be. If you are seriously considering moving your freelance income to Georgia, you need to understand exactly what this regime covers, what it does not, and what the realistic setup costs look like before you arrive.

What the 1% Small Business Tax Regime Actually Is

Georgia’s Tax Code allows an Individual Entrepreneur (IE) registered in Georgia to pay a flat 1% tax on annual gross turnover, provided that turnover does not exceed 500,000 GEL per year. This is called the Small Business Status (also referred to as the micro-business or small business regime depending on translation, but the 1% rate applies specifically to Small Business Status).

To be precise: you are not paying 1% on profit. You pay 1% on every lari of revenue you receive, before any expenses are deducted. For most service-based freelancers — developers, designers, writers, consultants — who have low overhead costs, this is extremely tax-efficient compared to almost any European equivalent.

The regime sits inside Georgian domestic tax law. It is not an offshore scheme or a grey-area structure. It is a legitimate, codified tax status that the Georgian government actively promotes to attract foreign income earners and digital workers. The Revenue Service issues formal Small Business Status certificates, and that status is renewed annually.

There is also a Micro Business Status for turnover below 30,000 GEL per year, which carries a 0% rate. For most full-time remote workers earning foreign income, the 1% Small Business Status is the relevant tier.

Who Qualifies — Eligible Income Types and Foreign Nationals

Foreign nationals can register as Individual Entrepreneurs in Georgia. Georgia does not require permanent residency or citizenship to hold IE status. Any person legally present in Georgia can register, and most nationalities can enter Georgia visa-free for up to 365 days per year, which covers the length of a standard annual operating period.

However, the type of income matters enormously. Small Business Status is approved for specific activity categories. The Revenue Service must confirm your business activity is eligible. Generally approved categories include:

• Software development and IT services
• Graphic design and creative services
• Consulting and advisory services
• Marketing, copywriting and content creation
• Translation and language services
• Online education and tutoring
• Accounting and bookkeeping services (provided to non-Georgian clients)

Activities that are not eligible for Small Business Status include trading (buying and reselling goods), most regulated professional services in Georgia (law, medicine, notary work), and any activity that the Revenue Service classifies as passive income — dividends, interest, and rental income from Georgian property all fall outside this regime entirely.

One important nuance for 2026: the Revenue Service has become more careful about applicants who list vague activity descriptions. Applications that say only “consulting” without further specification are increasingly asked for supplementary documentation explaining the nature of the work. Be specific when you register.

How to Register as an Individual Entrepreneur in Georgia

The registration process runs through the National Agency of Public Registry (NAPR), which operates the Houses of Justice service centres. In Tbilisi, the most efficient locations in 2026 are the Gldani and Saburtalo branches, which handle high volumes of IE registrations and have English-speaking assistants available on request. The Kutaisi and Batumi Houses of Justice are also fully equipped for this.

Here is the step-by-step process as it stands in 2026:

1. Prepare your documents. You need your passport (original), a Georgian phone number, and a Georgian address (this can be a rental apartment — your rental agreement or a simple address declaration is sufficient).
2. Visit a House of Justice. Walk-ins are accepted, but booking a slot online through the NAPR portal saves waiting time, particularly in Tbilisi. Processing is usually same-day for IE registration itself.
3. Pay the registration fee. IE registration costs 20 GEL for standard processing or 50 GEL for the express (same-hour) service.
4. Register with the Revenue Service. After receiving your IE certificate from NAPR, you register your tax status separately on the Revenue Service portal (rs.ge). This is where you apply for Small Business Status. You will need a Georgian TIN (tax identification number), which is issued automatically when you register as an IE.
5. Apply for Small Business Status. This is a separate application on the Revenue Service portal. You describe your business activity, confirm your projected turnover, and submit. Approval typically takes 3–7 working days. Once approved, you receive a certificate of Small Business Status.
6. Open a business bank account. Technically optional — you can use a personal account — but a business account makes invoicing and accounting much cleaner, and several Georgian banks now offer dedicated IE accounts.

The entire process, done efficiently, takes around one week from arrival. Many people complete it in two to three days if they have their documents ready and their address confirmed.

The Remotely from Georgia Programme

Launched during the pandemic and significantly updated since, the Remotely from Georgia programme is a government initiative that sits alongside — but is separate from — the IE tax registration process. In 2026, the programme primarily functions as a fast-track support channel: it offers guidance, a dedicated helpline, and some facilitation with the Revenue Service for foreigners registering as IEs.

Importantly, the programme itself does not grant any special visa status. Participants still rely on Georgia’s standard visa-free entry rules for their nationality, or on a standard Georgian visa. What the programme does offer is a structured onboarding package that includes verified contact lists for accountants, legal advisors, and bank representatives who are experienced with foreign IE registrations.

In 2026, registration in the Remotely from Georgia programme is free and done online through the programme’s official portal. It is not mandatory to use it — you can register as an IE independently — but for people who are not familiar with Georgian bureaucracy, the programme’s support infrastructure genuinely reduces friction.

One practical update for 2026: the programme now includes a digital verification letter that some Georgian banks accept as supporting documentation when opening a business bank account, which previously required more paperwork for foreign nationals. This is a small but useful change if you are dealing with the stricter KYC (Know Your Customer) requirements that Georgian banks implemented in late 2024.

2026 Budget Reality — What It Actually Costs to Set Up and Run

One of the most common questions from people considering this move is what the real financial commitment looks like beyond the 1% tax rate itself. Here is an honest breakdown.

Registration and Setup Costs

• IE registration at House of Justice: 20–50 GEL (standard or express)
• Revenue Service registration: free
• Small Business Status application: free
• Georgian SIM card (required for portal registration): 5–15 GEL
• Accountant fee for assisted registration (optional but recommended): 150–300 GEL one-time

Monthly Running Costs

• Accountant/bookkeeper (budget tier): 80–150 GEL/month — basic monthly declaration filing
• Accountant/bookkeeper (mid-range): 200–350 GEL/month — full service including VAT monitoring and Revenue Service correspondence
• Health insurance (budget tier): 80–120 GEL/month — basic private cover, no pre-existing conditions
• Health insurance (mid-range): 200–400 GEL/month — comprehensive cover including dental and specialist visits

Accommodation (Long-Term Rental, 2026 Market)

• Tbilisi (budget): 800–1,200 GEL/month for a furnished one-bedroom outside the centre
• Tbilisi (mid-range): 1,500–2,500 GEL/month for a furnished one-bedroom in Vake, Vera or Saburtalo
• Kutaisi (budget to mid-range): 500–900 GEL/month — Kutaisi remains significantly cheaper, and the city has developed considerably since 2024
• Batumi (seasonal variable): 900–1,800 GEL/month depending on season and distance from the seafront

For a freelancer earning the equivalent of roughly 4,000–6,000 GEL per month in foreign income, total monthly overheads — tax, accountant, health insurance, rent — sit comfortably below what the same person would pay in income tax alone in most Western European countries.

What the 1% Does Not Cover — Edge Cases and Common Misunderstandings

The 1% rate covers your Georgian income tax obligation on qualifying turnover. It does not make you invisible to your home country’s tax authority. This is where many people make costly assumptions.

Georgia has double taxation treaties with a number of countries, but tax residency in Georgia — which generally requires spending more than 183 days per year in the country — does not automatically terminate your tax obligations in your country of origin. Some countries (notably Germany, France, and several others) have specific rules about tax liability that persist regardless of where you are physically based. You are responsible for understanding your home country’s exit tax rules and ongoing obligations before you restructure your income through a Georgian IE.

Other key limitations of the 1% regime that catch people out:

• VAT threshold: If your turnover exceeds 100,000 GEL in any 12-month rolling period, you must register for Georgian VAT (18%) on Georgian-source transactions. For most freelancers serving only foreign clients, this is less relevant, but it matters if you start taking Georgian clients.
• Salary income is excluded: If you are employed (receiving a salary from a foreign employer rather than acting as a contractor), that income is not eligible for the 1% regime. You would be taxed at Georgia’s standard 20% personal income tax rate on employment income.
• Annual declaration is mandatory: Even if you earn below 30,000 GEL, you must file an annual income declaration. Missing this has consequences — the Revenue Service has become more consistent about penalties since 2025.
• Small Business Status can be revoked: If you exceed the 500,000 GEL annual turnover ceiling, your status reverts and you become liable for standard business taxes retrospectively on income above that threshold.

Banking, Invoicing and Getting Paid from Abroad

Moving money into Georgia and getting paid in foreign currency is functional but requires some planning in 2026. Georgian banks have tightened their compliance procedures considerably since late 2024, partly in response to international pressure around sanctions monitoring.

The main Georgian banks that work reliably with foreign IE clients in 2026 are TBC Bank and Bank of Georgia — both offer English-language interfaces, online onboarding for IEs, and multicurrency accounts that hold USD, EUR, and GEL simultaneously. Opening an account as a foreign national now typically requires in-person attendance at a branch, proof of IE status, and documentation explaining the source of expected income (a client contract or a letter describing your work is usually sufficient).

For receiving payments, most freelancers use one of two approaches:

• Direct SWIFT transfer to their Georgian bank account — straightforward, widely accepted by clients, and the funds convert to GEL at the bank’s daily rate or can be held in foreign currency.
• Wise Business account linked to the Georgian IE — Wise maintains Georgian operations in 2026 and is widely used by IE holders to receive payments in EUR or USD before transferring to their Georgian bank. This avoids some of the conversion friction.

Invoicing is not regulated in a specific format for IEs under Small Business Status. You can issue invoices in any currency, in any language, in any design — what matters to the Revenue Service is the GEL equivalent of the income received, which is calculated at the official exchange rate on the date of receipt.

One practical reality: the sensation of watching a EUR payment land in your TBC multicurrency account and then transferring the exact GEL amount you need for rent — while the remainder sits earning modest interest — is exactly as satisfying as it sounds to someone used to paying 30%+ income tax. The maths genuinely works, and the system is transparent enough that most people who set it up correctly have no unpleasant surprises come declaration time.

Frequently Asked Questions

Can I register as an Individual Entrepreneur in Georgia without being a resident?

Yes. Georgia does not require residency to register as an IE. You need only be legally present in the country, which most nationalities can achieve through visa-free entry for up to 365 days per year. Registration is done in person at a House of Justice with your passport and a Georgian address.

Does paying 1% tax in Georgia mean I no longer owe tax in my home country?

Not automatically. Tax residency in Georgia requires spending more than 183 days per year there, and even then, your home country may retain taxing rights under its own domestic law. Always consult a tax adviser familiar with both Georgian law and your country of origin before restructuring your income.

What happens if my annual turnover exceeds 500,000 GEL?

Your Small Business Status is revoked. Income above the 500,000 GEL ceiling is taxed at standard Georgian business tax rates, and you may need to restructure as a limited liability company. In practice, this threshold is roughly 170,000 USD at 2026 exchange rates, which most individual freelancers do not reach.

Do I need a Georgian accountant, or can I file my own tax declarations?

You can file independently through the rs.ge portal, which has an English-language interface. However, most IE holders pay for at least a basic accountant service at 80–150 GEL per month, particularly for the first year. The cost is low relative to the risk of filing errors or missed deadlines, which now carry consistent penalties.

Is the 1% tax rate guaranteed to remain in place, or could it change?

No tax rate is permanently guaranteed anywhere. Georgia has maintained the 1% Small Business Status rate since its introduction and has not signalled changes as of early 2026. However, the eligibility categories and enforcement standards have tightened, and anyone relying on this regime should monitor Georgian Tax Code amendments through official Revenue Service announcements each year.

📷 Featured image by Markus Winkler on Unsplash.