Good to know
Good to Know
- No local partner, local director, or minimum capital is required — foreigners can own and run an LLC 100% themselves.
- You can incorporate fully remotely via a Power of Attorney to a local representative, without ever visiting Georgia.
- A 'legal address' for the company does not need to match a residential address — many founders use a virtual office or their accountant's address, which is legal.
- If opening a business bank account for foreign-sourced income proves difficult at a Kutaisi branch, it's often easier through a Tbilisi branch or digital onboarding.
- Sources disagree on the exact current LLC state filing fee (GEL 100 vs GEL 200) — budget for the higher figure and confirm the live fee on the official NAPR site before filing.
- Kutaisi's Free Industrial Zone and nationwide Virtual Zone tax incentive (for IT companies serving foreign clients) can be worth exploring, but VZ only applies to LLCs, not Individual Entrepreneur status.
- This tax framework is identical nationwide — Kutaisi doesn't have any city-specific business tax rules, so the same Revenue Service regulations apply whether you register in Kutaisi, Tbilisi, or Batumi.
- The famous 'Georgia 1% tax' refers to the Individual Entrepreneur Small Business Status regime, not a corporate tax rate — if you form an LLC instead, you're on the 15%-on-distribution corporate regime, not the 1% regime.
- If your work falls on the excluded-activities list (consulting of any kind, legal, medical, architectural, financial services, etc.), you won't qualify for the 1% Small Business Status even as a sole IE, and will pay 20% on net profit instead.
- Georgia's VAT/CIT rules distinguish between Georgian-sourced and foreign-sourced income for IEs — some sources note the 1% rate is intended for Georgian-source income, so freelancers working entirely for foreign clients should get personalized advice on how this is applied in practice.
- This is general informational tax structure info, not personal tax advice — engage a local Georgian accountant/tax lawyer before registering, since exact eligibility and filing mechanics can shift with annual tax code updates.
Business Tax And Structure Options
- Jurisdiction Note
- Business taxation in Georgia is set entirely at the national level by the Revenue Service of Georgia — there is no Kutaisi-specific municipal business tax regime. Everything below applies identically whether the company/IE is registered in Kutaisi, Tbilisi, or Batumi.
VAT
- Standard Rate
- 18%
- Registration Threshold
- GEL 100,000
- Notes
- VAT registration becomes mandatory once taxable turnover exceeds this threshold within any rolling 12-month period; voluntary earlier registration is possible. Services exported to clients outside Georgia are commonly zero-rated, which benefits remote/IT service exporters.
LLC Corporate Tax
- Standard Rate
- 15% CIT, but it applies only to distributed profits, not to profits as they're earned.
- Model
- Georgia uses an 'Estonian model' of corporate income tax (CIT).
- Details
- The standard CIT rate is 15%, triggered when profits are distributed as dividends; other deemed-distribution events (certain non-business expenses, free-of-charge transfers, over-limit representative expenses) can also trigger the 15% charge.
- Structure
- LLC (limited liability company) is the standard vehicle for foreign-owned companies; 100% foreign ownership is permitted with no local director/shareholder requirement and no minimum capital.
- Retained Earnings
- Profits retained/reinvested in the company are not taxed at all until distributed.
- Filing Obligations
- LLCs file CIT-related declarations on a monthly, event-driven basis (whenever a distribution/trigger event occurs) rather than a single annual profit-based return, plus monthly payroll and VAT filings if applicable.
- Dividend Withholding
- Dividends paid to non-resident shareholders are generally subject to an additional 5% withholding tax, which can rise to 15% if the recipient is resident in a jurisdiction Georgia treats as a 'low-tax' jurisdiction; a double tax treaty can reduce this.
IT Virtual Zone Incentive
- Caveat
- This only covers foreign-sourced IT/export income; any local-client revenue is taxed under the normal rules.
- Benefit
- Qualifying IT Virtual Zone companies pay 0% corporate income tax on export income (income from customers outside Georgia), plus favorable VAT treatment on those exports.
- Eligibility
- An LLC providing IT services internationally can apply for 'Virtual Zone' status.
Freelancer Sole Proprietor Ie Status
- Registration
- Foreigners do not need Georgian residency or citizenship to register as an IE; registration is done through the National Agency of Public Registry / Revenue Service and can be completed in a single day, sometimes remotely via power of attorney.
- Structure Name
- Individual Entrepreneur (IE) — Georgia's sole-proprietor registration, distinct from forming a legal entity.
- Ie Without Small Business Status
- If an IE's activity is on the excluded list or otherwise doesn't qualify for SBS, they can still register as an IE but are taxed at the standard 20% rate on net annual profit (not turnover), with quarterly advance payments.
Small Business Status
- Rate
- 1% tax on gross turnover (not profit) for annual turnover up to the threshold below; amounts above the threshold in the same year are taxed at 3% until year-end, after which SBS is revoked if the threshold is exceeded two years running.
- Exclusions
- A defined list of professional activities is excluded from SBS regardless of turnover — including legal, notarial, tax/audit consulting, medical, architectural, financial/currency-exchange services, and any activity requiring a special license.
- What It Is
- An optional add-on tax status ('Small Business Status', SBS) for IEs.
- Filing Obligations
- SBS holders must file a monthly turnover declaration via the Revenue Service portal even in zero-income months; there is no separate corporate/dividend tax since there is no legal separation between the individual and the business.
- Turnover Threshold
- GEL 500,000
Micro Business Alternative
- Rate
- 0% tax
- Condition
- No employees allowed under Micro Business Status, and full IE registration is not even required to get it.
- Threshold
- GEL 30,000
Freelancer Vs LLC Practical Comparison
- LLC
- Requires more formal bookkeeping and monthly/event-driven CIT filings, but provides limited liability, allows multiple shareholders/employees, permits profit retention with zero tax on reinvested earnings, and is the required vehicle for accessing the 0% IT Virtual Zone regime.
- When To Switch
- Founders scaling beyond the ~500,000 GEL SBS turnover cap, hiring at scale, taking on investors, or wanting to reinvest profits tax-free typically move from an IE to an LLC; some start as an LLC from day one specifically for liability protection even at low turnover.
- Ie Sole Proprietor
- Faster and cheaper to set up, minimal ongoing bookkeeping, no distinction between personal and business income/liability (you're personally liable for business debts), can't issue dividends, best suited to solo freelancers/consultants under the turnover cap.
Incorporation Process And Requirements
- Timeline
- Once complete documents are submitted, standard LLC registration is typically completed within 1 business day; same-day (expedited) processing is available for an additional fee. IE registration is generally same-day or next-day. Building in time for document preparation, translation, notarization/apostille (if founders are abroad), and bank account opening, a realistic end-to-end timeline for a foreigner is roughly 3 days to 2-3 weeks depending on document complexity and whether the founder is physically present.
- Governing Authority
- The National Agency of Public Registry (NAPR), a legal entity of public law under the Ministry of Justice of Georgia, is the sole national registrar for all business entities, including in Kutaisi. Filings are physically submitted at a House of Justice / Public Service Hall branch or, in many cases, online.
- Official Registry Link
- https://napr.gov.ge/en/service/registers/business-registry
- Foreign Ownership Rules
- Georgia allows full foreign ownership of companies, which means international investors can fully control their businesses without having to look for a local partner. An LLC can have between one and 50 shareholders, with no requirement for local partners, and can be fully owned and managed by foreign citizens. There is no minimum or maximum share capital requirement for an LLC.
- Kutaisi Incentive Zones
- Kutaisi hosts one of Georgia's Free Industrial Zones and has historically had active Virtual Zone (VZ) IT-company registrations, partly due to lower real estate costs. VZ status (0% corporate profit tax on income from services to non-Georgian clients) is a nationwide program, not Kutaisi-exclusive, and is granted to LLCs only, not to Individual Entrepreneurs.
- Most Common Entity Type
- The Limited Liability Company (LLC) is the most common structure for foreign investors; other available forms include Joint-Stock Company, Individual Entrepreneur (IE) status for solo freelancers, limited partnership, and branch/representative office of a foreign company.
- Kutaisi Specific Registration Point
- Kutaisi has its own NAPR regional office (I. Abashidze St. 20) and a House of Justice branch that processes company and individual entrepreneur (IE) registrations, so a founder does not need to travel to Tbilisi to file locally.
- Local Partner Or Sponsor Requirement
- None. Georgia imposes no local-partner, local-director, or local-shareholder mandate on foreign founders for standard commercial entities.
- Banking Note For Kutaisi
- TBC Bank and Bank of Georgia both have Kutaisi branches, but these are oriented toward local retail and SME clients; foreign-income account openings are possible but report higher friction than in Tbilisi, so some nomads open accounts through Tbilisi branches or online onboarding instead.
Fees
- No Minimum Share Capital
- Yes
- LLC Expedited Same Day Surcharge
- GEL 200
- English Language Extract Supplement
- GEL 26
- Signature Certification Per Document
- GEL 7.00
- Annual Re Registration Confirmation Fee
- GEL 50
- LLC Standard Registration Fee Lower Estimate
- GEL 100
- Full Service Local Agency Package Typical Cap
- GEL 1,500
- LLC Standard Registration Fee Higher Estimate
- GEL 200
- Power Of Attorney For Remote Filing Typical Cost
- GEL 600
- Individual Entrepreneur Registration Fee Standard
- GEL 60
- Individual Entrepreneur Registration Fee Expedited
- GEL 85
- Note On Fee Sources
- Recent third-party sources disagree on the exact current LLC filing fee — some cite GEL 100 standard, others GEL 200.
Documents Required
- Passport copies of founders/directors (notarized/apostilled if executed outside Georgia, though Hague Convention member-country documents get simplified treatment)
- Company charter / articles of association (a standard government-published template can be used to speed processing)
- Registration application specifying company name, entity type, registered legal address, share capital, and management/supervisory board members
- Power of Attorney if a local agent is filing on the founder's behalf (allows fully remote registration with no visit to Georgia required)
Core Registration Steps
- Choose entity type (LLC is standard for most foreign-owned businesses).
- Check and reserve a unique company name via the NAPR registry.
- Prepare and (where required) notarize the company charter/articles of association and application form; documents originating abroad may need notarization and apostille under the Hague Convention.
- Submit the application, charter, passport copies of directors/shareholders, and proof of a legal address (a virtual office or accountant's address is legally acceptable and commonly used) to a Public Service Hall / House of Justice branch (Kutaisi has one) or file remotely via a Power of Attorney to a local representative.
- Pay the state registration fee.
- Receive the registration extract (amonnaweri) and identification number, which also serves as tax registration.
- Open a corporate bank account at a local commercial bank using the registration extract, passport, and tax ID.
AI-generated estimateData refreshed July 2026
Sources cited for this category
These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.
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Data last updated July 2026 · Verify anything important.