Quick facts
| Parameter | Details |
|---|---|
| Granted by | The tax authorities (Revenue Service) |
| What is exempt | Distribution of profit from the permitted activity |
| Permitted activity | Sale and re-export of foreign goods |
| Typical model | Bought abroad, warehoused in Georgia, sold abroad |
| What is NOT covered | Domestic Georgian sales, services, IT |
| Not the same as a FIZ | A Free Industrial Zone is a separate regime |
| Legal form | An ordinary legal entity, LLC or JSC |
Who the regime fits
The logic is straightforward: Georgia does not claim tax on profit that was substantively earned outside its borders, where the country served only as a transit point.
The company profile this works for:
- intermediary trade between a supplier in one country and a buyer in another
- distribution of foreign goods without releasing them into Georgian circulation
- logistics and warehouse handling of third-party goods followed by re-export
The profile it does not fit:
- sales to end customers inside Georgia
- providing services rather than trading goods
- software development and any digital products
For that last group other regimes exist. IT companies usually fit Virtual Zone status, covered in a separate article, or International Company status. The choice between them follows the nature of the business: goods or services.
How STC differs from a Free Industrial Zone
These two regimes get conflated regularly, including in popular write-ups, so here is the split stated plainly.
| Special Trading Company | Free Industrial Zone | |
|---|---|---|
| Nature | A status granted by the tax authorities | Registration of an enterprise inside a zone |
| Focus | Resale and re-export of foreign goods | Manufacturing and processing aimed at export |
| Territorial tie | Does not require being located in a zone | Requires presence in a specific zone |
| Scope of relief | Profit tax exemption on the permitted activity | Broader: profit tax, customs duties, VAT, and property tax on zone operations |
The practical takeaway: if the business is pure trading of third-party goods in transit, STC is the direction. If manufacturing or processing on site is planned, the conversation is about a zone. Different applications, different requirements, different obligations.
What exactly is exempt
The exemption applies to the distribution of profit earned from the permitted activity. It helps to remember how profit tax works in Georgia generally: it is charged not when profit is earned but when it is distributed. How that Estonian model operates is covered in a separate article.
So STC removes the tax precisely at the event that would otherwise trigger it. For a trading company that regularly distributes profit to its owners, that is a material difference.
Income outside the permitted activity is not covered by the relief and is taxed normally. A mixed model, where part of the turnover runs inside Georgia, requires separate accounting.
How to obtain it
- Register a legal entity in Georgia, usually an LLC. Georgian law sets no minimum share capital for an LLC. How registration works and what to do immediately after is set out in the article on first steps after registration.
- Prepare a description of the model: where goods come from, where they are stored, to whom and where they are sold.
- File the application for the status with the tax authorities.
- Set up accounting that separates income from the permitted activity from everything else.
There is no fixed statutory processing period, and in practice it depends on the completeness of the package and the specific situation. Planning transactions around an assumed grant date is unwise: secure the status first, then commit to counterparties.
What to check before applying
Substance of the operations. The status is built around an actual flow of goods. A model where the goods exist only on paper and Georgia is a formal layer creates exposure on audit.
The document trail. Contracts with supplier and buyer, shipping documents, warehouse records. These are what demonstrate the transaction falls within the permitted activity.
Separate accounting. If any share of revenue comes from sales inside Georgia, the streams need separating from the outset rather than retroactively.
Who grants Special Trading Company status?
The Georgian tax authorities. It is not a registry action in the companies register but a separate decision on the company's application.
Is this the same as a Free Industrial Zone?
No. They are two distinct regimes. STC attaches to the nature of the activity, namely resale and re-export of foreign goods, and does not require being located in a zone. A Free Industrial Zone is a territorial regime with a broader set of reliefs, aimed at manufacturing and processing.
Can an STC sell goods inside Georgia?
Domestic sales fall outside the relief and are taxed normally. If such turnover exists, separate accounting is required.
Does the status suit an IT company?
No. The regime is designed for goods, not services or digital products. For IT there are Virtual Zone status and International Company status.
Is there a minimum share capital?
Georgian law sets no minimum share capital for an LLC.
How long does it take to obtain the status?
There is no single statutory deadline; the timeline depends on the completeness of the filing and the circumstances. Current expectations are worth confirming before applying.