Virtual Zone vs International Company Status: Choosing Georgia's IT Tax Regime
A side-by-side comparison of Georgia's two headline IT tax regimes — Virtual Zone Person and International Company Status — covering eligibility, corporate and salary taxation, VAT on exports, substance requirements, and which regime fits which kind of software business.
Two Georgian regimes dominate every conversation with software founders: Virtual Zone Person status and International Company Status. They are often mentioned in the same breath, but they are built for different stages of business and carry different obligations. Choosing the wrong one means either leaving benefit on the table or claiming a status you cannot defend.
What they have in common
Both are aimed at IT companies serving clients outside Georgia, both reward real activity rather than a paper presence, and both require the company to be a properly registered Georgian legal entity. Neither is a substitute for personal tax residency, and neither survives a review without substance behind it.
Virtual Zone Person
Virtual Zone Person status targets companies that develop and export software services. Its appeal is a very light corporate-tax footprint on exported IT income, with tax mainly arising when profits are distributed.
- Profit from IT services supplied outside Georgia is generally exempt from corporate profit tax.
- Exported IT services are typically outside the scope of Georgian VAT.
- A dividend withholding usually applies when profit is distributed to owners.
- The status is granted to companies that genuinely create IT products, and the development substance must be evidenced.
It is the natural starting point for a smaller or newer software exporter that actually does its development work but does not yet have a large in-country team.
International Company Status
International Company Status is the more selective, heavier regime, designed for established IT (and certain maritime) businesses relocating a genuine operation to Georgia. It usually requires a track record and real Georgian substance in exchange for reduced headline rates.
- Reduced rates on corporate profit and on employee salary taxation.
- Typically requires prior experience in the qualifying activity and a real presence in Georgia.
- Better suited to a company bringing an actual team, office, and payroll onshore.
- More demanding to obtain and to keep than Virtual Zone status.
Key differences at a glance
- Stage: Virtual Zone suits newer or smaller exporters; International Company suits established operations.
- Substance: both need it, but International Company expects a real local team and track record.
- Salaries: International Company specifically reduces employee salary taxation, which matters once you hire in Georgia.
- Effort: Virtual Zone is lighter to obtain; International Company is more selective and more demanding to maintain.
Which one fits
- A solo founder or small studio exporting software and reinvesting profit usually starts with Virtual Zone.
- A company moving a payroll team to Georgia and paying local salaries often gets more from International Company.
- If you are unsure whether your activity even qualifies as exported IT, resolve that first — it decides both routes.
Substance and evidence decide it
Whichever regime you target, the deciding factor is not the application form; it is whether the company's real activity supports the status. Document what you build, where it is built, who your clients are, and how the money flows before you apply — and confirm the current rates and conditions, because both regimes are refined over time.