International Company Status in Georgia: The Requirements and the Application
International Company status replaces Georgia's standard rates with 5% on distributed profit, 5% on salaries and no dividend withholding, for IT and maritime businesses with a track record and a real operation in Georgia. The Government grants it on an application filed through the Revenue Service, and it can be cancelled back to the day it was granted. The activities it covers, how the experience requirement is met, what substance means, the application step by step, and who should not apply.
International Company status gives a Georgian company with qualifying IT or maritime activity a 5% profit tax on distribution, a 5% income tax on its employees' salaries and no withholding on its dividends. It is not chosen at registration. The Government of Georgia grants it, on an application filed through the Revenue Service, to a company that can show at least two years' experience in the permitted activity, its own or its group's, and that carries on the core of that activity in Georgia with its own people. This article sets out the requirements and the procedure as the Tax Code and the Government's Ordinance No. 619, often called a resolution in English, state them at the time of writing.
5%
Profit tax on distributed profit
Instead of the standard 15%
5%
Income tax on employees' salaries
Instead of the standard 20%
0%
Withholding on dividends
Instead of the standard 5%
2 years
Experience in the permitted activity
In the company, in the foreign enterprise it represents, or in its majority corporate owners
What International Company status changes, rate by rate
| Tax | Standard LLC | International Company |
|---|---|---|
| Profit tax on distributed profit | 15% | 5% |
| Income tax on employees' salaries | 20% | 5% |
| Withholding on dividends | 5% | None |
| Property tax | Up to 1% a year | Exempt, except on land, for property used in the permitted activity |
| Profit that stays in the company | Not taxed until distributed | Not taxed until distributed |
An international company is a Georgian enterprise that carries on activities defined by an ordinance of the Government and earns income solely from them; the Government grants the status. Income from employment at an international company is taxed at 5%. Its profit tax rate is 5%, on the same objects of taxation as other resident enterprises. Its dividends are not taxed at source and are not included in the recipient's gross income. It is exempt from property tax, except on land, on property intended or used for the permitted activity, and it may not be set up in a Free Industrial Zone.
The activities the status covers
- Software publishing, including the publishing of computer games.
- Computer programming, consultancy in computer technology, management of computer facilities and other IT and computer services.
- Related digital services named in the ordinance, among them making or supplying digital products, including software support and updates; building websites; web hosting and remote maintenance of software and hardware; remote system administration; online storage; access to and downloads of software.
- Maritime: defined commercial and technical ship-management services provided to shipowners. Carriage by sea is expressly not a permitted activity.
The IT services count when they are provided under a service contract. The Code requires that the company earn its income solely from the permitted activities; the ordinance tolerates only income incidental to them, up to 2% of the income from the permitted activities in a calendar year, VAT excluded. That is the source of the working rule that about 98% of income must come from the qualifying activity. An activity that is not on the list, once the income from it passes that limit, ends the status from 1 January of the year in which the activity began. A business with mixed income therefore does not fit as it stands: the qualifying activity has to sit in its own company first.
The experience requirement and how a group meets it
The ordinance asks for at least two years' experience of the permitted activity for which the status is sought, and gives three ways of showing it.
- The Georgian company has the two years itself.
- The Georgian company is the representative in Georgia of a non-resident enterprise, and that enterprise has two years' experience of the activity the Georgian company carries on.
- Partner enterprises holding more than 50% of the Georgian company each have, on their own, two years' experience of that activity.
Read closely, each route places the experience in an enterprise. A founder's personal career as a developer is not one of them, which is why a newly formed company owned by individuals, with no operating business behind it, generally does not qualify yet. A group meets the requirement through the second or third route: the Georgian company is the established foreign company's representative in Georgia, a term the ordinance does not define further, or established companies own more than half of it. The evidence is documentary: accounts, client contracts and a group chart.
The substance expected in Georgia: people and expenses
The status is for an activity that is carried on in Georgia. In the ordinance's terms, the holder must perform its core income-generating activity in Georgia, have adequate human resources with the necessary qualifications, and bear the corresponding operating expenses; the core activity means the significant functions that create the economic value of the business, not only or mainly support work. The text gives no headcount and no minimum spend. It is a qualitative test, applied to the file and open to review later. In practice that means developers or ship managers on the Georgian company's payroll, a workplace, and management on the ground. One feature rewards exactly this: salaries paid to employees who are Georgian citizens and residents, and the cost of research and development services in the permitted field, reduce the amount subject to profit tax when they are incurred in Georgia, under a procedure set by the Minister of Finance.
The application runs through the Revenue Service to the Government
- 1
Test eligibility first: the activity against the permitted list, the share of income it produces, the experience route, and what will really be in Georgia.
- 2
Complete the application on the form set by the Minister of Finance and file it with the Revenue Service, on paper or electronically: registration data, legal and actual addresses, the permitted activity applied for and the place where the service is performed.
- 3
Attach the documents that evidence the activity and the experience, and any permit the activity requires. The Revenue Service may ask for more.
- 4
The Revenue Service checks the application against the rules within 10 days and may allow up to 10 days to cure a defect; an uncured application can be left unconsidered. Maritime applications also go to the Maritime Transport Agency, which has 10 working days to give its opinion.
- 5
A compliant application passes to the Ministry of Finance, which presents it to the Government with its proposal. The Government decides to grant or to refuse; the ordinance sets no deadline for this stage.
- 6
The status is granted without a term and counts from the first day of the month in which it is granted. The Revenue Service keeps the register of holders.
The decision belongs to the Government. A complete file is a condition of being considered, not a promise of the outcome, and no adviser can give you a date for a stage that has no statutory deadline. Plan the payroll and the first distribution on the standard rates until the Government's decision granting the status is in hand. The Revenue Service's published position: salaries accrued and profit earned before the status counts keep the standard rates even if they are paid out later.
What has to be kept up after the status is granted
- Income only from the permitted activities, with incidental income inside the 2% limit, tested every calendar year.
- The core activity, the qualified people and the operating expenses in Georgia, for as long as the status is held.
- Information on employees reported to the tax authority under the Minister of Finance's procedure, so that the 5% is applied through payroll.
- Monthly returns as for any Georgian company: the status changes the rates, not the filing calendar.
- No second status: if the holder is granted Virtual Zone status or innovative startup status, the International Company status ends, and a Virtual Zone company that is granted International Company status loses its Virtual Zone status.
The status is cancelled by decision of the Government, on the submission of the Ministry of Finance, where the holder asks for it, where income from activity outside the permitted list exceeds the limit, where the holder does not meet the requirements of the rule, or where the holder is granted Virtual Zone or innovative startup status. On the holder's request it ends from the start of the month of the decision. For an activity outside the list it ends from 1 January of the year in which that activity began. Where the holder does not meet the requirements, it is treated as cancelled from the date on which it was granted. If an amendment to the ordinance causes either situation, the date is the day the amendment takes effect. Virtual Zone status ends it from the moment that status is granted, and innovative startup status from the first day of the month after that decision.
A twelve-person studio moves its payroll to Tbilisi
A software group has traded for five years through a foreign company. It forms a Georgian LLC wholly owned by that company and moves twelve developers and its product management to Tbilisi. Gross payroll is GEL 120,000 a month, and the LLC expects to pay out GEL 500,000 of profit to its parent in the first full year.
- 1Experience: the parent holds more than 50% of the LLC and has more than two years in software development, which is the third route.
- 2Activity and income: the LLC programs under service contracts and has no other income beyond small incidental receipts, far inside the 2% limit.
- 3Substance: the developers are employed by the LLC, the office is leased in its name, and the product decisions are taken in Tbilisi.
- 4Payroll: income tax at 5% instead of 20% is GEL 6,000 a month instead of GEL 24,000, a difference of GEL 216,000 a year.
- 5Profit: of GEL 500,000 of profit paid out in full, the standard rules take GEL 75,000 in profit tax and, before any treaty, GEL 21,250 in withholding on the GEL 425,000 dividend. With the status the profit tax is GEL 25,000 and nothing is withheld from the GEL 475,000 dividend, a difference of GEL 71,250.
The payroll saving is three times the saving on profit. That is the character of the regime: it rewards a company that employs people in Georgia. The same group with its developers left abroad would not meet the substance condition.
Illustrative arithmetic at the rates at the time of writing. Pension contributions, the deduction for certain salaries and transfer pricing between the LLC and its parent are left out, and the Government decides whether the status is granted.
Who should not apply
- A new company with no operating history in it or behind it. A software exporter in that position usually starts with Virtual Zone status.
- A business outside IT and maritime, or one whose income is mixed. The standard LLC, taxed at 15% on distributed profit only, is the honest answer.
- A company that wants the rates while its people and its decisions stay abroad. The status is granted on substance and can be cancelled back to its first day.
- A business that makes, stores or re-exports goods. That is what a Free Industrial Zone is for, and an International Company cannot be set up inside one.
- A small exporter with little payroll in Georgia. The Virtual Zone's exemption on exported IT profit may be worth more, and the two statuses cannot be held together.
Next step
An eligibility answer before any fee
We review the track record, the activity and the planned Georgian operation, and tell you in writing whether an application can stand. There is no list price for this status: the work is quoted after that assessment, because it depends on the group's history and the size of the operation. The Government decides; we build the file that answers its questions.
See the International Company routeWhat this article does not answer
It does not confirm that your particular service is on the permitted list today, or how the authority will read the experience of your group; both are settled on the documents, in an assessment. It leaves out transfer pricing between the Georgian company and its group, and it says nothing about how your home country taxes the owners. If you are choosing between this status and the Virtual Zone, our comparison of the two regimes covers it. We prepare and file the application and keep the substance file current afterwards. We do not promise the outcome or a date.
General information, not legal or tax advice. International Company status is governed by the Tax Code of Georgia and by Ordinance No. 619 of the Government of Georgia of 8 October 2020 as amended; the permitted activities, the conditions and the rates change, and the official Georgian text governs.