Individual Entrepreneur Registration in Georgia

If you have registered as an Individual Entrepreneur (IE) and acquired Small Business Status (SBS), you can only work based on service agreement provisions. In the service agreement with your client, offered services should be clearly defined and identical to the code of activity that was granted to you as an IE with a SBS. To avoid inspection and further investigation from the Revenue Service Inspectors, so they do not consider that you are employed in this company, it is advised to have several customers and different sources of income. But this does not exclude the possibility of being employed as an individual and taxing your income at 20% withholding Tax.

You have an opportunity to choose up to 2 forms of activity ( preferably related). It also has a special line for the third code of activity. For instance, if you are engaged in industries like science, art, or writing.

If you provide services while being in Georgia, you have an obligation to register for VAT from the moment you exceed the gross turnover threshold of 100 000 Georgian Lari. If you provide services electronically to non-resident legal entities, you are exempt from VAT. Additionally, services provided outside Georgian jurisdiction are also exempt from VAT charge. For more details read article on VAT Regulations in Georgia.

Individual Entrepreneur (IE) with Small Business Status (SBS) do not have to pay a withholding tax of 20%, but since you have a preferential tax regime, you are required to pay 1% of your total gross turnover.

Tax Residency and Taxpayer status are two separate notions and obtained with completely different procedures. While registering any form of enterprise in Georgia you may only obtain a taxpayer’s special number, however, to become a Tax Residence you have to either stay in Georgia for more than 183 days during a calendar year, or through High Net Worth Individual(HNWI) program, when the value of your confirmer property is more than 3 000 000 Georgian lari ( ≈ 1 100 000 euros), and/or when your annual income for each of the last three years is more than 200,000 Georgian lari ( ≈ 60,000 euros) plus annual income from sources in Georgia is at least 25,000 Georgian lari (≈ 8,000 euros), for more details read article about Tax Residency In Georgia.

The advantages of registering as an Individual Entrepreneur (IE), especially if you have submitted to the preferential taxation regime of a Small Business Status (SBS), gives you freedom of movement within the countries and get paid for provided services In Georgia. But, nevertheless, it is advisable to have some connection with Georgia, namely crossing the border and entering Georgian Jurisdiction at least two times per year.

Closing an Individual Entrepreneur is quite a straightforward and easy process and can be completed within 10 working days from the day of submission. What is more, the procedures of Individual Entrepreneur closure can be processed both with your personal presence and remotely by proxy.

If you have the status of a IE Small Business, the filing of tax returns is conducted on the portal of the Internal Revenue Service (IRS) from the 1st to the 15th of every month. Although, there is an absence of transactions, a zero declaration should be submitted. As for the standard form of the individual entrepreneur, the amount is declared once a year. Our experts will be happy to offer you accounting training or accounting support to facilitate this task. The good news is that the Standard Individual Entrepreneur does not have such a limitation.