Tax Exemptions & Preferential Tax Regimes in Georgia
A practical overview of Georgia's preferential tax statuses — Virtual Zone Person, International Company Status, Free Industrial Zones, Small Business and Micro Business — who qualifies, the headline rates, and how to apply.
Georgia combines a relatively simple tax system with several genuinely attractive incentive regimes. Corporate profit tax follows an "Estonian-style" model: in principle, retained and reinvested profit is not taxed, and tax (commonly cited at 15%) generally arises on distribution. On top of this base, qualifying businesses can apply for preferential statuses that further reduce or exempt certain income.
Virtual Zone Person (IT companies)
Virtual Zone Person status is designed for IT companies that develop software and supply IT services. Profit derived from supplying qualifying IT services to clients outside Georgia is, in broad terms, exempt from corporate profit tax; however, distributions and Georgian-sourced income are treated differently. Eligibility hinges on the company genuinely carrying out qualifying IT activity in Georgia, and the status must be applied for and granted.
Typical conditions
- The company is engaged in qualifying information-technology activities (software development/IT services).
- Qualifying income comes from services supplied to recipients outside Georgia.
- Adequate substance and evidence of the activity is maintained.
International Company Status
International Company Status targets established companies in IT and certain maritime/shipping activities with a track record. It offers a reduced corporate profit tax rate (commonly cited at 5%) and reduced rates on certain salary and dividend flows, in exchange for stricter qualification and substance requirements (including experience and local activity criteria).
Free Industrial Zone (FIZ) enterprises
Companies operating inside a Free Industrial Zone can benefit from exemptions on several taxes for activities conducted within the zone (subject to conditions and certain transaction-based charges). FIZs are particularly relevant for manufacturing, trade and logistics businesses.
Small Business and Micro Business status (individual entrepreneurs)
- Small Business Status: a turnover-based regime with a headline 1% tax on turnover up to a statutory annual threshold (a higher rate applies above it). Popular with freelancers and solo consultants registered as Individual Entrepreneurs.
- Micro Business Status: a full exemption for very small operations below a low turnover threshold, subject to activity restrictions.
These regimes apply to Individual Entrepreneurs rather than LLCs, so the choice of legal form interacts directly with the tax outcome. A solo consultant may pay less overall as an IE with Small Business Status than through an LLC — but an LLC offers liability separation and is better suited to partners, employees and outside investment.
Other targeted statuses
Georgia also offers sector- or location-specific regimes, including High Mountain Settlement enterprise relief, tourism-enterprise incentives, pharmaceutical and agricultural reliefs, and charitable-organisation status. Each has its own criteria and application route.
How to apply
- Confirm the company's activity genuinely fits the status criteria.
- Assemble the supporting evidence (activity description, contracts, export evidence, financials).
- Submit the formal application to the competent authority.
- Obtain the authority's decision — only then is the status confirmed and effective.