Tax Benefits
- Personal income tax reduced from 20% to 5%.
- Corporate income tax reduced from 15% to 5%.
- Dividends are tax-exempt.
Who Qualifies
A Georgian company may apply for International Company status in either of the following cases:
Case A. The Georgian company has at least 2 years of experience in the activity for which it is applying for International Company status.
Case B. The Georgian company is a representative (subsidiary) of a non-resident enterprise, and that non-resident enterprise has at least 2 years of experience in activities permitted under International Company status.
What the Tax Code sets out
The international company regime is set out in Article 23 of the Tax Code of Georgia. The main rules:
- Income only from permitted activities. An international company earns income solely from the activities defined by a Government ordinance.
- The Government grants the status. The procedure for granting and cancelling the status and the list of permitted activities are also set by the Government.
- 5% profit tax. The object of taxation is the same as under the Estonian model: tax arises when profit is distributed. The taxable amount is calculated by dividing the payment by 0.95.
- Expenses in Georgia reduce the base. If expenses on the Government list are incurred in Georgia, the taxable amount can be reduced by them.
- 5% on salaries. Income from employment at an international company is taxed at 5%.
- Dividends untaxed. Dividends paid by an international company are not taxed at source and are not included in the recipient's income.
- Property tax exemption. Property intended or used for permitted activities is exempt from property tax, except land.
When the status is lost
If an international company starts an activity not listed in the Government ordinance, the status is cancelled as of 1 January of the year the activity began (Article 23). The benefits stop applying from the start of that year, so before starting a new line of business it is worth checking that it is on the list.
An international company also cannot be set up in a Free Industrial Zone. More on how the status works and who benefits from it is in our article on International Company status in Georgia.
International Company vs Virtual Zone
| International Company | Virtual Zone | |
|---|---|---|
| Introduced | 2020 | 2011 |
| Sectors | IT + maritime | IT only |
| Corporate tax | 5% | 0% |
| Dividends | 0% | 5% |
| Experience required | 2 years | none |
| Georgian clients allowed | yes | no |
FAQ
Does International Company status apply to shipping companies?
Yes. Ordinance №619 covers the maritime sector — one of the key differences from Virtual Zone status, which is limited to IT.
What if the 2-year experience requirement is met through a foreign parent company?
The foreign parent must have at least 2 years of documented experience in the same activities permitted under Ordinance №619. Documents confirming the parent company's track record are submitted as part of the application.
Can permitted and other activities be combined?
No. Under Article 23 of the Tax Code, an international company earns income solely from the activities defined by the Government ordinance. Starting another activity cancels the status as of 1 January of the year it began.
What tax do international company employees pay?
Income from employment at an international company is taxed at 5% instead of the general 20%. The procedure for reporting employee information to the tax authority is set by the Minister of Finance.
Does an international company pay property tax?
Property intended or used for permitted activities is exempt from property tax. Land is not covered by this exemption and is taxed on general terms.