Registration if individual entrepreneur (sole proprietorship) in Georgia

In 2025, Georgia continues to hold a leading position in the number of sole proprietorship (SP) registrations by non-residents. This is due to several factors, including the country’s tax attractiveness, a well-developed banking sector, the ease of business registration and operations, a relatively low level of corruption, a favorable climate, and fast and convenient financial reporting. Opening an individual entrepreneur in Georgia in 2025 does not take much time, and it is even possible to do so without visiting the country.

Advantages of Sole Proprietorship (SP) Status

The SP status applies to an individual engaged in business activities and registered in the Georgian Entrepreneurial Register. Establishing an SP in Georgia is recorded in the Public Register of Entrepreneurs and Non-Entrepreneurial Legal Entities.

The small business status in Georgia is particularly attractive as it allows entrepreneurs to significantly reduce their tax burden. Georgia is one of the few countries that has introduced such a drastic reduction in tax rates.

If a company’s annual turnover is below 30,000 GEL (approximately $9,000), the tax rate is 0%. This status is called “micro-business”.

SPs with small business status, whose annual turnover is below 500,000 GEL (around $185,000), pay only 1% tax on revenue.

Taxes must be paid monthly, and business owners with this status are required to submit monthly declarations of income and expenses. This process is entirely remote, online, and does not take much time.

In Georgia, the standard tax rate for SPs is 20%, while VAT of 18% applies when the annual turnover exceeds 100,000 GEL.

Why do you need to register sole proprietorship in Georgia

✅ Low tax rates:

• 0% tax for micro-businesses
• 1% tax for small businesses
• The standard tax rate (OSN) is relatively high at 20%, compared to Armenia.

✅ Fast registration process:

• Registering an SP takes just one day.

✅ Recognized jurisdiction:

• Georgia is well-recognized in the U.S. and Europe, making it easier to work with international partners.

✅ Developed online banking system:

• Georgia’s banking sector is comparable to popular digital banks like
• The main banks, BoG (Bank of Georgia) and TBC, offer excellent online banking services.

✅ Remote tax payments:

• Taxes can be paid online via the rs.ge website using any foreign bank card.

✅ Use of neobanks for business:

• SPs in Georgia can use Wise and Payoneer as business accounts.

✅ No residency requirement:

• Entrepreneurs can run their business from another country while maintaining a Georgian SP.

✅ Long-term stay in Georgia:

• Citizens of many countries can stay in Georgia for 360 days per year without a residence permit.

✅ Rare tax audits and easy interaction with tax authorities:

• Tax checks are infrequent, and communication with tax authorities is available online.

✅ Remote registration of SP and bank accounts:

• Entrepreneurs can open an SP remotely without visiting Georgia.

Potential Downsides: CRS and Automatic Exchange of Financial Information

One of the main risks is automatic exchange of financial information (CRS). In autumn 2024, Georgia joined the CRS system, which means that financial data may be exchanged with other countries.

Why is this important?
If you travel frequently and unexpectedly become a tax resident of a high-tax country (such as an EU country), there is a possibility that your income from an SP in Georgia could be subject to taxation in your tax residence country.

What’s next?
How this will work in practice will become clearer by the end of 2025. Entrepreneurs should monitor tax agreements between Georgia and other countries to avoid unexpected tax liabilities.

Popular Business Activities Under the Small Business Regime

Many freelancers and entrepreneurs register SPs in Georgia for the following activities:

✔ Marketing services
✔ Software development (IT)
✔ E-commerce
✔ Brokerage and intermediary services

To open a sole proprietorship (SP) and a business bank account in Georgia in 2025, you will need the following documents and actions:

1. International passport. In the case of remote registration – a notarized power of attorney.
2. Legal address. A rental agreement must be signed with a property owner in Georgia.
3. Registration with the Entrepreneurial Register and Tax Office.
4. Remote transition to small business status (to apply the 1% turnover tax).
5. Bank visit to open a business account in a Georgian bank.

Choosing a legal address for registering an SP in Georgia is especially important if the entrepreneur does not reside in the country. It is crucial to carefully select the property owner to avoid problems with dishonest landlords who might “evict” you after a few months, leading to the loss of SP status.

Best Banks in Georgia for Sole Proprietorship Accounts

Opening an SP in Georgia is easy, but opening a business bank account is more complex and time-consuming. However, it is worth noting that in Georgia, SPs can use accounts in Wise and Payoneer and pay taxes using these services or any other foreign bank card.

Here’s a brief overview of major banks in Georgia:

1. Bank of Georgia (BoG)

• Together with TBC Bank, it controls over 80% of the Georgian banking market.
• Financially strong and its mobile app is comparable to Tinkoff and Sberbank.

2. TBC Bank

• The second largest bank in Georgia.
• Its shares are traded internationally, and it offers brokerage services through TBC Invest.

3. Liberty Bank

• Requires proof of source of funds, bank statements, employment in Georgia, and justification for opening an account.
• Highest rejection rate among Georgian banks.

4. Credo Bank

• Easier account opening process.
• Generally considered the most foreigner-friendly option.

Total Tax Burden for a armenian Tax Resident with a Georgian sole proprietorship

Simplified tax regimes, such as the Russian “simplified taxation system (STS)” or the Georgian “small business” regime, are always combined – even if there is a double taxation treaty between countries.

Example 1: Freelancer without an SP in Armenia

An armenian freelancer who has opened an SP in Georgia and receives payments from a foreign company into their Georgian business account must:

• Pay 1% in Georgia.
• Pay 20% Personal Income Tax (PIT) in Armenia.

Example 2: Armenian SP on STS (1-10%)

• Pays 1% in Georgia.
• Pays 1-10%% in Armenia under the STS regime.

Closing a Sole Proprietorship in Georgia

The procedure for closing an SP in Georgia is just as simple as opening one.
To liquidate your SP, you need to:

• Submit an application to deregister.
• Provide a passport or ID card.
• Pay a government fee.

Best Time to Register a Sole Proprietorship in Georgia

If you plan to register an SP with small business status, it is recommended to apply at least two weeks before the end of the month.

Why is timing important?

• The small business tax status takes effect from the 1st day of the following month after registration.
• If an SP is registered on April 1st, the 1% tax rate will only apply from May 1st.
• Any income earned before May 1st will be taxed at 20%.

Recommendation:

If you plan to start accepting payments immediately after registering your sole proprietorship, it is best to register it at the end of the month to avoid high taxes on initial income.