Running an E-commerce Business Through a Georgian Company
Payment acceptance and what each route really requires, VAT and reverse charge on the tools you buy, the VAT registration threshold, customs where physical goods are involved, and the specific e-commerce models that Georgian banks and payment providers quietly decline.
A Georgian company is a workable base for an online store, and the reasons founders choose it - fast formation, tax on distribution rather than on profit, real regional banking - are genuine. The friction is never the company. It is payment acceptance, and it is worth understanding before the storefront exists.
18%
Standard VAT rate
Registration mandatory above the turnover threshold
100k GEL
The registration threshold
Taxable turnover in a rolling 12 months - confirm current figure
Where?
The question VAT turns on
Who your customer is and where the supply happens
How you will actually take money
| Route | Typical fit | What they will ask for |
|---|---|---|
| Georgian bank acquiring | Sales into Georgia and the region | Registered company, live website, described goods, director ID |
| International PSP | Cross-border card acceptance | Company documents, UBOs, site with policies, chargeback history |
| Marketplace payout | Amazon, Etsy and similar | Matching legal name, bank details in the company's name, tax data |
| Wise / Payoneer style | Receiving payouts, not accepting cards | Full KYC on the company and its owners |
Every provider on that list looks at the same website you do - and at the refund policy, the terms, the contact page and whether the goods actually exist. A store with placeholder pages fails onboarding no matter how clean the corporate file is.
Why the KYC is heavy, and what sits behind it
The onboarding questions are not arbitrary. Payment providers and banks operating in or into Georgia apply anti-money-laundering rules built on the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism, and payment services themselves fall under the Law of Georgia on Payment System and Payment Services, supervised by the National Bank of Georgia under its Organic Law. That is why they insist on identifying the ultimate beneficial owners, understanding the source of funds, and matching the described business to the transactions they actually see. Treating the KYC file as underwriting evidence, rather than as paperwork, is what gets an application through.
Accountable entities, including financial institutions and payment service providers, are required to identify and verify their customers and beneficial owners, understand the nature and purpose of the business relationship, and monitor transactions on a risk-sensitive basis.
The tax points e-commerce sellers miss
- Reverse charge: the advertising, software and marketplace fees you buy from abroad commonly fall under the VAT reverse-charge mechanism. Almost every online seller is affected, and almost none expect it.
- The VAT registration threshold applies to taxable turnover in any continuous 12 months - a good quarter can cross it mid-year.
- Corporate income tax is charged when profit is distributed, so a reinvesting store may have no CIT event for a period.
- Physical goods bring customs and import duties into the picture; the Free Industrial Zone question only arises if goods physically move.
Reverse charge, in plain terms
Reverse charge is the point that catches almost every online seller, so it is worth spelling out. When a Georgian company buys services from a foreign supplier that has no Georgian VAT presence - advertising on a foreign platform, SaaS subscriptions, marketplace and processing fees - the obligation to account for Georgian VAT on that purchase can shift to the buyer under the Tax Code's reverse-charge mechanism. The seller does not charge you Georgian VAT; you self-assess it. It applies even before you cross the VAT registration threshold on your own sales, which is exactly why it surprises people. Budget for it and declare it rather than discovering it in an audit.
Where a taxable person in Georgia receives services from a person not established and not registered for VAT in Georgia, the recipient is, as a rule, liable to account for VAT on those services under the reverse-charge mechanism.
A dropshipping store that failed onboarding twice
A founder registers a Georgian LLC for a dropshipping store selling consumer electronics accessories to EU buyers, with suppliers in Asia and no stock held anywhere.
- 1The first PSP application is declined: the site had no working refund policy, no company details in the footer, and no reachable support contact.
- 2The second is declined on model risk - dropshipping with long delivery times and no held stock is a chargeback profile before it is a business.
- 3The fix is commercial, not corporate: realistic delivery promises published, a refund policy that matches practice, support that answers, and supplier agreements evidencing the chain.
- 4The third application, with the same company and the same owner, succeeds.
Nothing about the Georgian company was ever the problem. Payment providers underwrite the operation, not the certificate of incorporation.
Illustrative. Every provider applies its own risk appetite and may reach a different conclusion on identical facts.
Models that get declined
The VAT that arrived with the advertising invoice
An e-commerce company buys advertising from a large foreign platform and treats the invoice as a simple foreign cost with no Georgian tax consequence.
- 1Services supplied from abroad to a Georgian business commonly fall under the VAT reverse charge, which makes the recipient account for the tax.
- 2The obligation does not depend on the company being VAT-registered for its own sales.
- 3Twelve months of advertising spend accumulates an unaccounted liability that nobody has declared.
- 4It surfaces on review, with interest, and the company has to reconstruct the position from platform invoices it never treated as tax documents.
The reverse charge is the tax that arrives without an invoice line telling you it exists. Any recurring foreign service - advertising, software, contractors - should be tested for it before the second month, not after the twelfth.
Illustrative. Reverse-charge treatment depends on the service, the supplier and the place of supply rules.
- Goods that are restricted or age-gated, sold without the corresponding controls.
- Subscription billing with unclear cancellation - a chargeback engine in every provider's model.
- Digital goods with instant delivery and no fraud screening.
- Anything where the described business and the observed transactions do not match.
General information, not legal or tax advice. VAT rules, the reverse-charge mechanism, the registration threshold and each provider's risk appetite change; confirm the current position before relying on any of this.
How Trustlex approaches it
We register the company, and we prepare the bank-readiness file that providers actually read: activity description, source of funds, contracts and the site as it will be seen. Where we think the model will fail underwriting, we say so during scoping - a declined application costs you weeks and costs a provider relationship that is hard to reopen.