Unlock Georgia’s 1% Small Business Tax: A Digital Nomad’s Guide to Saving Money

What the 1% Small Business Tax Actually Is

Georgia’s tax code has attracted serious attention from remote workers since at least 2021, but in 2026 the misinformation circulating in nomad forums has reached a new peak. People arrive expecting a simple flat tax on everything they earn, only to discover the rules have specific conditions, annual turnover caps, and reporting obligations they never read about. This guide cuts through that noise with current figures and the actual legal framework.

The 1% small business regime is a special tax status available to individual entrepreneurs (IE) — known in Georgian as indme mewarme — whose annual turnover does not exceed 500,000 GEL. At that rate, you pay 1% of your gross revenue to the Georgian Revenue Service. There is no separate income tax on top of this. For most digital nomads earning between 30,000 and 150,000 GEL per year from foreign clients, this represents a dramatically lower effective tax burden than they would face in their home country.

The legal basis sits in the Tax Code of Georgia, Article 88. The regime is designed for small business operators, not employees. You must be genuinely providing services or selling goods as a business — not receiving a salary disguised as invoices. The Revenue Service has increased scrutiny on this distinction since 2024, particularly for people with a single client who looks, functionally, like an employer.

How to Register as an Individual Entrepreneur in Georgia

Registration is genuinely straightforward compared to most countries. The whole process can be completed in a single morning at a Justice House (sakhalkho reestri) or, since late 2024, almost entirely online through the National Agency of Public Registry portal for those with a Georgian electronic ID or a valid biometric document scan.

1. Obtain your Georgian tax ID (PIK number). If you are a foreign national, you need to visit a Revenue Service office or a Justice House with your passport. This is free and takes about 20 minutes.
2. Register as an Individual Entrepreneur. Submit your application at a Justice House branch or via the online portal. You will need your passport, tax ID, and a Georgian address (your rental address is fine). The registration fee is 3 GEL for standard processing. Express same-day registration costs 15 GEL.
3. Apply for Small Business Status. This is a separate step with the Revenue Service. Log in to rs.ge, find the small business status application under your taxpayer profile, and submit. Approval typically comes within one to three business days.
4. Open a business bank account. Technically optional — many IEs use a personal account — but strongly recommended for clean bookkeeping and to satisfy Revenue Service audits.

The entire process, done in person, takes one to two days. Done online by someone comfortable with Georgian bureaucratic portals, it can be finished in an afternoon. You do not need a Georgian lawyer or accountant to register, though having one for your first tax filing is worthwhile.

The “Remotely from Georgia” Programme vs. Going It Alone

Georgia’s Remotely from Georgia programme, relaunched in updated form in 2025, is a specific government initiative that bundles the IE registration process with support services, a dedicated Revenue Service contact, and in some cases subsidised coworking access. It targets employed remote workers who can prove a foreign income source — typically a salary or long-term contract with a non-Georgian company.

The key differences between joining the programme and registering independently as an IE:

• Income verification: Remotely from Georgia requires proof of foreign income (typically bank statements showing at least USD 2,000 per month or equivalent). Independent IE registration has no minimum income requirement.
• Support structure: Programme participants get guided onboarding, English-language assistance through the portal, and a checklist system. Independent registrants navigate rs.ge and the Justice House system alone.
• Tax status: Both routes lead to the same 1% small business regime. The programme does not offer a different or better tax rate.
• Duration flexibility: Independent IE registration has no required minimum stay. The programme was originally designed around a 6-month commitment, though 2025 updates loosened this.

For freelancers with multiple clients and variable income, going it alone as an IE gives more flexibility. For employees of foreign companies wanting hand-holding through the process — and who meet the income threshold — the programme reduces friction significantly. In 2026, both paths are well-trodden enough that the independent route is no longer intimidating even for first-timers.

What Counts as Taxable Income — and What Doesn’t

This is where most people make expensive mistakes. Under the 1% small business regime, you pay tax on gross revenue received — not profit, not net income. Every Georgian lari equivalent that arrives in your account from a client invoice is taxable at 1%, regardless of your expenses.

This means the regime is most advantageous when your margins are high — consultants, developers, designers, writers, coaches. It is less attractive for product-based businesses with significant cost of goods, since you are taxed on top-line revenue, not the margin.

What qualifies:

• Fees for services invoiced to foreign or Georgian clients
• Product sales below the 500,000 GEL annual threshold
• Licensing fees for intellectual property you created
• Commissions and referral fees tied to active work

What does not qualify under the 1% regime:

• Dividends from company ownership stakes
• Rental income from property
• Capital gains from selling assets
• Interest income from deposits or loans

Foreign-source income received by a Georgian IE is fully taxable under the regime — Georgia does not exempt foreign earnings for tax residents operating as IEs. The common misconception that “money earned abroad isn’t taxed in Georgia” applies to a different situation: non-resident individuals who spend fewer than 183 days per year in Georgia. Once you are operating as a registered IE, you are inside the Georgian tax system regardless of where your clients are based.

Your Tax Obligations Beyond the 1%

The 1% rate is real, but it is not your only obligation. Three additional items apply to many IE registrants, and ignoring them creates penalties.

VAT Threshold

If your annual turnover exceeds 100,000 GEL, you are required to register for VAT in Georgia. The standard VAT rate is 18%. For most nomads serving foreign clients exclusively, this is often manageable — services exported to non-Georgian entities may be zero-rated for VAT purposes, but you must still register and file. Below 100,000 GEL, VAT registration is optional.

Pension Contributions

Georgia introduced mandatory pension contributions in 2019 under the Funded Pension Law. Individual entrepreneurs are required to contribute 4% of taxable income to the private pension fund, with the state matching 2% (up to a cap). Foreign nationals who are not Georgian citizens can opt out of the pension scheme with a written application — this is a significant saving that many people overlook when calculating their true tax rate.

Annual Income Declaration

IE registrants must file an annual income declaration with the Revenue Service by 1 April of the following year. The declaration covers the previous calendar year’s turnover. Monthly or quarterly tax payments are typically made throughout the year, and the annual declaration reconciles any difference. Missing the deadline triggers automatic fines.

2026 Budget Reality: The Real Cost of Running Your Business from Georgia

The 1% tax rate looks extraordinary on paper. The full picture of what it costs to operate as an IE in Georgia is still very favourable, but you need all the numbers before you commit.

Setup Costs (One-Time)

• PIK (tax ID) registration: free
• IE registration (standard): 3 GEL
• IE registration (express): 15 GEL
• Small business status application: free
• First-year accounting consultation (recommended): 300–800 GEL

Ongoing Monthly Costs

• Accountant for monthly filings (budget option, shared): 100–200 GEL/month
• Accountant for monthly filings (dedicated, English-speaking): 300–600 GEL/month
• Health insurance (basic expat policy, age 25–40): 100–250 GEL/month
• Health insurance (comprehensive with dental and inpatient): 350–600 GEL/month

Accommodation (Monthly Rental, 2026 Rates)

• Budget: Furnished studio in Tbilisi (Saburtalo, Gldani): 700–1,000 GEL/month
• Mid-range: 1-bedroom apartment in central Tbilisi (Vake, Vera): 1,500–2,500 GEL/month
• Comfortable: 2-bedroom modern apartment in Tbilisi (Mtatsminda, Saburtalo new builds): 2,800–4,500 GEL/month
• Budget (Kutaisi): Furnished 1-bedroom: 500–800 GEL/month
• Mid-range (Batumi): 1-bedroom sea view: 1,200–2,000 GEL/month

Compared to 2024, Tbilisi rents in central districts have stabilised after a sharp rise between 2022 and 2023. Kutaisi has become noticeably more attractive in 2026 following the expansion of Wizz Air and Ryanair routes through Kutaisi International Airport, bringing more connectivity without proportionally increasing rental costs.

A realistic monthly budget for a solo remote worker operating as an IE — including rent, food, transport, health insurance, and accountant — sits between 3,000 and 5,500 GEL depending on lifestyle and city.

Practical Banking and Payment Infrastructure for the 1% Regime

Registering as an IE is one thing. Actually getting paid into Georgia, and keeping the Revenue Service satisfied with your records, requires working through some friction that has reduced — but not disappeared — since 2024.

Georgian Bank Accounts

The two banks most commonly used by IE registrants are TBC Bank and Bank of Georgia. Both offer current accounts with online banking, SWIFT transfers, and multi-currency functionality. Opening a personal account is easy on a tourist visa. Opening a business account as an IE requires your IE registration certificate and tax ID, and both banks have English-language branches in Tbilisi.

TBC’s Space product and Bank of Georgia’s Solo tier both include fee-free SWIFT incoming transfers above certain account balance thresholds — check current conditions when you apply, as these change.

Stripe, Wise, and Payment Processors

As of 2026, Stripe does not support Georgian business accounts for merchant processing — you cannot create a Georgian-entity Stripe account and receive card payments directly. Many IEs maintain a Wise or Revolut account in a supported country (where they previously held residency) for client-facing invoicing, then transfer earnings to their Georgian bank account. This is legal but requires accurate record-keeping: the GEL equivalent of each transfer on the date received is your taxable revenue figure.

The Revenue Service accepts foreign bank statements as supporting documentation for your income declaration, but everything must be converted to GEL at the National Bank of Georgia’s official exchange rate for the transaction date. An accountant familiar with IE clients automates this without much fuss.

Frequently Asked Questions

Can I register as an Individual Entrepreneur in Georgia as a foreign national?

Yes. Georgia allows foreign nationals to register as IEs with a valid passport and a Georgian tax ID (PIK number). You do not need permanent residency or a special visa. Georgia’s visa-free policy covers most nationalities for up to one year, which is enough time to operate as an IE for a full tax year without needing additional immigration status.

Does the 1% tax regime require me to become a Georgian tax resident?

Registering as an IE and operating under the 1% regime does make you subject to Georgian tax obligations on your IE income. However, formal tax residency (183 days or more in-country) affects your global income tax position. If you spend fewer than 183 days in Georgia, speak with a Georgian tax accountant about how your home country’s tax treaty with Georgia — if one exists — affects your overall position.

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

You lose eligibility for the small business regime and are reclassified under the standard income tax system, which carries a flat rate of 20% for individuals. The transition is not immediate — you have a reporting obligation and a window to restructure. Most remote workers earning under 500,000 GEL annually (approximately USD 185,000 at 2026 rates) are never at risk of hitting this threshold.

Is the 1% regime legal for people employed full-time by a foreign company?

This is the grey area most commonly misunderstood. If your foreign employer reclassifies you as a contractor and you invoice them as a Georgian IE, it can be legal — but the substance of the arrangement matters. If you work exclusively for one company, follow their hours, use their equipment, and have no other clients, both Georgian and your home country’s tax authorities may view this as employment, not self-employment. Take specific advice before restructuring an existing employment arrangement.

Do I need a Georgian accountant, or can I file taxes myself?

Filing independently through rs.ge is technically possible, and some IEs with simple income structures do manage it. In practice, the portal is entirely in Georgian, the exchange rate calculations are tedious, and a single missed quarterly payment triggers fines. For 100–300 GEL per month, an English-speaking Georgian accountant handles all filings and gives you a clean paper trail. For most people, the time saved justifies the cost within the first month.

📷 Featured image by Diane Picchiottino on Unsplash.