Unlock 1% Tax: How Digital Nomads Benefit from Georgia’s Small Business Scheme

Search for “Georgia nomad tax” and you will find ten blog posts that disagree with each other. One says you pay nothing, another says 20%, and a third mentions a programme that may no longer matter to you. The truth is simpler than it looks. For many remote workers, Georgia offers a flat 1% tax on turnover through its Individual Entrepreneur small business status. This guide explains how it works in 2026, what it costs to run, and where people make mistakes. It is general information, not tax advice, so confirm the details with a Georgian accountant or the Revenue Service (rs.ge) before you commit.

What the 1% Regime Actually Is

The scheme is called Individual Entrepreneur (IE) with Small Business Status. Under normal Georgian rules, an individual entrepreneur pays 20% income tax on profit. Small business status replaces that with a flat 1% on gross turnover, meaning your total income before expenses. You do not deduct rent, flights or software, and you do not pay more if you earn more, up to the annual limit.

The limit is GEL 500,000 of turnover per calendar year. That is roughly USD 185,000 at recent exchange rates, which is far above what most freelancers and remote employees-turned-contractors earn. If you pass it, you lose the status and move to the standard regime.

The scheme was built for local micro-businesses, not for foreigners. It still applies to non-citizens, which is why it became popular with nomads. Think of it as a simple turnover tax. It is not a “nomad visa” and it does not give you residency.

Who Qualifies, and Who Does Not

Most services performed remotely qualify: software development, design, writing, marketing, consulting, translation, online teaching and similar work. Your clients can be anywhere in the world. Services exported to foreign clients are generally treated as outside the scope of Georgian VAT, which keeps the paperwork light.

You do not qualify if you are employed full-time by a Georgian company, since that is a different tax setup. Some activities are excluded from small business status, and the Revenue Service keeps that list. Examples include certain trading, financial and gambling-related activities. If your work is unusual, ask before you register.

Be honest about your situation. The scheme is for people who are genuinely self-employed. If you are an employee of a foreign company and your employer treats you as a salaried worker, you may not be able to invoice yourself. Some people restructure as contractors, but that decision affects your home-country taxes and your employment rights. Talk to your employer and an adviser first.

How to Register as an Individual Entrepreneur, Step by Step

Registration itself is free, and since 2024 more of the process has moved online. You can still do it in person, and many newcomers prefer that.

1. Get your passport ready. A valid passport and your entry stamp or record are the core documents. A Georgian phone number helps for SMS verification.
2. Register as an Individual Entrepreneur. This happens through the Revenue Service portal (rs.ge) or at a Public Service Hall. In person, expect a ticket queue, the hum of a waiting room and a clerk who processes your form on the spot. Tell them you want IE registration.
3. Apply for Small Business Status. This is a separate request, made on the same portal after you have IE status. Approval is usually quick. Ask for confirmation in writing or a printout.
4. Set up your rs.ge account. You will need credentials to file monthly declarations. The interface is clearer in Georgian, but an English version exists for core functions, and a translation tool covers the rest.
5. Open a bank account. Large banks such as TBC and Bank of Georgia accept foreigners with a passport, though requirements vary by branch. An account makes paying tax much easier.

Your Monthly Routine After Registration

The scheme is cheap, but it is not “set and forget”. Filing is monthly, and you must file even in months when you earn nothing.

The filing rhythm

You submit a declaration through rs.ge by the 15th of the following month. Tax is due by the same date. Your January income is reported and paid by 15 February. Missed deadlines bring penalties, and a zero-income month still needs a zero declaration.

Converting foreign currency

Most nomads invoice in USD or EUR. For tax, your income is converted into lari using the National Bank of Georgia’s official exchange rate on the date you receive the money. Keep a simple spreadsheet with the date, client, amount in original currency, rate and amount in GEL. It takes five minutes a month and saves hours if the tax office asks questions.

Records and invoices

Keep your contracts, invoices and bank statements. Georgian rules do not ask you to track expenses under the 1% scheme, but your home country may. Store everything for at least several years.

A Worked Example With Real Numbers

These figures use an exchange rate of about GEL 2.70 per USD. Rates move, so check the National Bank rate on the day you are paid.

• USD 2,000 per month (about GEL 5,400): tax is about GEL 54 per month, or roughly GEL 650 per year.
• USD 4,000 per month (about GEL 10,800): tax is about GEL 108 per month, or roughly GEL 1,300 per year.
• USD 8,000 per month (about GEL 21,600): tax is about GEL 216 per month, or roughly GEL 2,600 per year.

Add the accountant fee and the real yearly cost rises, but it is still small next to standard income tax in most Western countries. A person earning USD 4,000 monthly pays roughly GEL 1,300 in Georgian tax annually, plus perhaps GEL 600 to GEL 1,800 for an accountant. Whether you owe more tax at home depends on your citizenship and residence, which is covered below.

Visa-Free Year, Remotely from Georgia, and Tax Residency

Three separate ideas often get mixed up, so keep them apart.

Your right to stay

Citizens of roughly 95 countries, including the US, UK, EU states, Canada and Australia, can stay in Georgia visa-free for up to 365 days. That is the main reason Georgia suits long stays. Small business status does not extend or change this. Check your own nationality on the Ministry of Foreign Affairs website, since lists get updated.

Remotely from Georgia

This programme launched in 2020 as a formal route for remote workers, with requirements such as proof of monthly income, valid health insurance and a clean record. For most passport holders it adds little, because the year-long visa-free stay already covers them. It can matter for people whose nationality does not get 365 days. Check the current status and income threshold on the official Georgian government portal, as the programme has changed over time.

Tax residency

You become a Georgian tax resident if you spend 183 days or more in the country within any continuous 12-month period. This is separate from your visa. Residents are taxed on worldwide income, but if your income runs through a small business status, the 1% regime is the rate that applies to that business income.

Staying fewer than 183 days does not stop you from using the scheme, but your tax position at home may change depending on how many days you spend away. Residence permits, for example through business or property routes, are a different process with their own requirements and costs. Small business status alone does not give you one.

Traps That Catch Nomads Out

• Home-country taxes still apply. US citizens are taxed on worldwide income regardless of where they live. Many other countries tax you until you formally end your tax residence there. Georgia has double-tax treaties with a number of countries, but a treaty does not erase your home obligations. Pay for one session with an international tax adviser before assuming you owe nothing elsewhere.
• The GEL 500,000 ceiling. Cross it and you lose the status. If a big project could push you over, plan the timing with your accountant.
• VAT registration. Georgian VAT registration becomes mandatory once your taxable turnover from Georgian-based supplies passes GEL 100,000 in 12 months. Exported services are treated differently, but confirm how your work is classified.
• Banking friction. Receiving international payments in a Georgian account can mean SWIFT fees and, at times, extra questions from the bank about the source of funds. Keep contracts and invoices ready to show.
• Rule changes. Georgian tax rules are adjusted from time to time. Do not rely on a blog post from 2022, including ours. Check rs.ge or ask your accountant at the start of each year.
• Misusing the status. Registering without real business activity, or declaring less income than you actually receive, risks fines. The tax authority has become more systematic about checking bank data in recent years.

2026 Budget Reality

The 1% tax is only one line in your budget. These are typical 2026 monthly figures for a single person staying one to six months.

Setup and compliance

• IE registration and small business status: GEL 0
• Accountant, budget: GEL 50 to GEL 100 per month for basic filing
• Accountant, mid-range: GEL 100 to GEL 200 per month with English support and bookkeeping
• Accountant, comfortable: GEL 250 to GEL 400 per month with advice on international tax issues

Health insurance

• Budget: GEL 60 to GEL 120 per month for basic travel-style cover
• Mid-range: GEL 150 to GEL 300 per month for a longer-stay plan with outpatient care
• Comfortable: GEL 350 to GEL 600 per month for an international plan with wide hospital access

Furnished one-bedroom rent

• Tbilisi: GEL 1,200 (budget) to GEL 1,800 (mid-range) to GEL 2,800 or more (comfortable)
• Batumi: GEL 900 to GEL 1,500 to GEL 2,400, with sharp rises in summer
• Kutaisi: GEL 600 to GEL 900 to GEL 1,400

Monthly living costs, including food, transport, utilities and a SIM, usually add GEL 900 to GEL 1,200 for a budget lifestyle, GEL 1,500 to GEL 2,200 for mid-range, and GEL 2,500 or more for comfortable. Short stays at the cheaper end of each range are possible in winter, while Batumi’s summer season and Tbilisi’s autumn demand push rents up. A mid-range remote worker in Tbilisi, then, might spend around GEL 4,000 to GEL 5,000 per month in total, including tax and insurance.

Frequently Asked Questions

Can foreigners really use Georgia’s 1% small business tax?

Yes. Foreigners can register as Individual Entrepreneurs with the Revenue Service and apply for small business status. You do not need citizenship or residency. You need a passport, a Georgian tax record and a genuine self-employed activity. Always confirm current eligibility on rs.ge before applying.

Does the 1% tax apply to income from foreign clients?

Yes. The 1% applies to your turnover, including payments from clients abroad, up to GEL 500,000 per calendar year. Income is converted to lari at the National Bank of Georgia rate on the day you receive it. Foreign-client services are usually outside Georgian VAT, but confirm how yours is classified.

Do I still pay tax in my home country?

Possibly. Georgia’s 1% does not cancel obligations at home. US citizens must file regardless of where they live, and many countries tax residents on worldwide income until you formally leave their tax system. Double-tax treaties can reduce overlap, so speak to an international tax adviser before relying on Georgia alone.

What happens if I earn more than GEL 500,000 in a year?

You lose small business status and move to the standard regime, where individual entrepreneurs pay 20% income tax on profit. VAT rules may also apply. If you expect a high-income year, plan with an accountant early so you can time large invoices and avoid surprises.

Do I need to file if I earned nothing in a month?

Yes. Small business status requires a monthly declaration by the 15th of the following month, even with zero income. Filing a nil declaration is quick on rs.ge. Skipping it can bring penalties, so many nomads ask their accountant to submit these automatically.

📷 Featured image by Portraits of Modern Dairy on Unsplash.