Starting a Business in Georgia in 2026: How to Register and Pay 1% Tax

Foreigners can also start a business in Georgia in 2026, and registering as a sole proprietor costs as little as 26 GEL. Small businesses are subject to a 1% tax rate, provided they meet the established requirements. However, this regime is not available for all types of business activities, and foreign entrepreneurs must take into account new rules regarding work permits. We’ll explain how to register a business in Georgia, what taxes you’ll have to pay, and how much it costs to run your own business.

In the previous article, we provided a ranking of the richest countries in the world in 2026 by GDP.

Doing business is always associated with risks: taxes, contracts, inspections, conflicts with partners or government agencies. A personal business lawyer will help you avoid critical mistakes and protect the interests of the company at every stage of its development.

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Why is Georgia Attractive to Foreign Entrepreneurs?

Georgia has become a popular destination for starting a business thanks to its accessible registration process, special tax regimes, and the opportunity to work with international clients. The country is most often considered by entrepreneurs in the IT, trade, tourism, and digital services sectors.

Key advantages of doing business in Georgia:

- Low taxes. Sole proprietors with small business status can pay 1% of their taxable income instead of the standard income tax.

- Fast registration. You can register as a sole proprietor in one business day, or on the same day you apply for an additional fee.

- Accessibility for foreigners. Foreign citizens can register businesses and own Georgian companies without being required to have a local co-owner.

- Opportunities for international operations. In Georgia, you can establish a company to provide services to foreign clients, engage in international trade, or develop digital products.

- Economic growth. According to the World Bank, Georgia’s economy grew by 7.8% in the first half of 2026. The main drivers of growth include manufacturing, information technology, transportation, and construction.

Business sector indicators also show positive trends. According to Geostat, in the second quarter of 2026, the turnover of Georgian companies reached 67.5 billion GEL, which is 11.9% more than in the same period of 2025.

At the same time, starting a business in Georgia does not automatically grant tax benefits or the right to work. Foreigners must take into account immigration requirements, the nature of their business activities, and income tax rules. These factors determine how profitable it will be to do business in the country.

In our previous article, we discussed options for legally moving to Georgia in 2026: which residence permits are available to foreigners.

How to start a business in Georgia in 2026?

Foreigners can register a business in Georgia without a local partner or Georgian citizenship. The procedure takes as little as one business day, but tax and immigration requirements must be taken into account to actually conduct business operations. Starting March 1, 2026, new rules for obtaining work authorization apply to foreign entrepreneurs.

Key steps for starting a business in Georgia:

1. Choose a business structure. An Individual Entrepreneur is suitable for freelancers, small projects, and self-employed individuals. A Limited Liability Company (LLC) allows you to conduct business through a separate legal entity, bring in partners, and hire employees.

2. Prepare the documents. Typically, you’ll need a foreign passport, an application, and a legal address in Georgia. Depending on the type of registration, you may need founding documents, a translation, or notarization.

3. Register the business. Contact the National Agency of Public Registry of Georgia (NAPR). Registration of a sole proprietorship costs 26 GEL within one business day or 75 GEL on the day of application. For an LLC, standard registration costs 200 GEL, and expedited registration costs 400 GEL.

4. Obtain tax status. To qualify for the 1% tax rate, a sole proprietor must separately obtain small business status through the Revenue Service. The mere fact of registration as a sole proprietor does not grant the right to this tax benefit.

5. Open a bank account. The bank may request registration documents, information about the sources of funds, clients, and the nature of the business. Opening an account depends on the results of the review.

6. Verify eligibility to work. Foreign nationals subject to the new rules must obtain the appropriate work permit. If necessary, they must also apply for a D1 visa or the appropriate residence permit.

Important change in 2026: Foreign self-employed individuals who do not have a permanent residence permit and conduct business activities in Georgia must, as a general rule, obtain a work permit. Applications can be submitted through the official portal of the State Agency for Employment Promotion. Certain categories of foreigners are subject to exceptions or transitional provisions.

In a previous article, we reported that Georgia has introduced mandatory work permits for foreigners starting in March 2026.

What taxes do entrepreneurs pay in Georgia in 2026?

Business taxes in Georgia depend on the legal structure, annual income, and type of activity. The most attractive tax regime provides a 1% rate for sole proprietors with Small Business Status. However, different tax rules apply to LLCs.

1% Tax for Small Businesses

Sole proprietors with Small Business Status may pay 1% of their taxable income derived from Georgian sources. The tax is calculated without deducting ordinary business expenses.

Key conditions for applying the rate:

- Annual income limit – 500,000 GEL. For certain wine and agritourism operators, it is 700,000 GEL

- Exceeding the limit – 3% rate. It applies from the beginning of the month in which the limit is exceeded until the end of the calendar year

- Repeatedly exceeding the limit for two consecutive years results in the loss of small business status effective from the beginning of the following year

- Restrictions by Type of Activity. The preferential tax regime is not available for certain professions and business sectors

In particular, entrepreneurs engaged in legal, architectural, auditing, or consulting activities, as well as those involved in foreign exchange transactions or gambling, are not eligible for the 1% rate. Restrictions also apply to certain other types of activities.

For example, if an entrepreneur earned 100,000 GEL in taxable income for the year, they would pay 1,000 GEL in tax at the 1% rate. However, expenses for equipment, rent, or advertising do not reduce the tax base for this calculation.

Important: Income from a foreign client is not always considered income from a foreign source. Its tax treatment depends on the location and nature of the work performed.

In a previous article, we reported that Georgia is simplifying the process of obtaining a residence permit for foreign IT specialists.

Taxes for LLCs

For Georgian companies, the standard corporate income tax rate is 15%. The country uses a distributed profit taxation model: retained earnings that remain in the business for development are, as a general rule, not taxed until they are distributed.

Key tax rates for businesses:

- 15% – corporate income tax under the general regime

- 5% – tax on dividends, if the applicable withholding applies

- 20% – standard income tax on employee salaries

- 18% – standard VAT rate

Pension contributions and other obligations may apply separately, depending on the employee’s status and the company’s activities.

Learn more about Georgia’s citizenship-by-investment program by following the link.

When must a business pay VAT?

The standard VAT rate in Georgia is 18%. Mandatory registration typically applies when the value of transactions counted toward this threshold exceeds 100,000 GEL over any 12 consecutive calendar months.

Small business status and the 1% rate do not exempt an entrepreneur from fulfilling VAT obligations. At the same time, special rules for determining the place of supply and taxation apply to certain international transactions.

Thus, the 1% tax in Georgia can indeed be beneficial for small businesses and freelancers. However, before choosing a tax regime, it is necessary to consider the source of income, permitted types of activities, and possible additional taxes.

Learn more about the C5 visa for remote workers in Georgia by following the link.

What kind of business is profitable to start in Georgia in 2026?

The most promising business sectors in Georgia are related to digital services, trade, tourism, and logistics. According to the Georgian Ministry of Economy, business sector output grew by 10.7% in the second quarter of 2026. Particularly notable growth was recorded in transportation and warehousing (+18.8%), trade (+9.4%), and the hotel and restaurant sector (+9.6%).

Foreign entrepreneurs should consider the following sectors:

- IT and digital services. Software development, web design, online marketing, and the creation of digital products. Such businesses can be run without renting an office and can serve international clients.

- Tourism and hospitality. Mini-hotels, apartments, guided tours, and dining establishments. Tourism services are particularly in demand in Tbilisi, Batumi, and mountain resort regions. The main risk is seasonal demand.

- Retail and e-commerce. Online stores, import of goods, and sales of clothing, electronics, and auto parts.

In the second quarter of 2026, wholesale and retail trade—including vehicle repairs—accounted for 32.4% of the country’s business sector turnover.

- Transportation and logistics. Freight transportation, warehousing services, delivery of goods, and organization of international shipments. This sector is of interest to entrepreneurs with experience working with international supply chains.

- Beauty and personal services. Hair salons, beauty salons, barbershops, repair shops, and cleaning companies. For such projects, location, a steady customer base, and rental costs are important factors.

Small businesses in Georgia that target foreign customers deserve special consideration. For freelancers and specialists who provide services remotely, the country can be attractive due to low startup costs.

At the same time, profitability depends not only on demand but also on the tax regime. For example, consulting services may not qualify for the 1% tax rate, even if the entrepreneur is self-employed. Therefore, before launching a business, it is necessary to verify the eligibility of a specific type of activity and calculate the actual costs of running the business.

In a previous article, we reported that Georgia is tightening residence permit rules for students and spouses of foreign nationals.

How much does it cost to start and run a business in Georgia?

The cost of starting a business in Georgia depends on the legal structure and field of activity. For freelancers and entrepreneurs who work online, initial costs can be minimal. In contrast, opening a store, café, or beauty salon requires additional investments in rent, equipment, and staff.

Key expenses for entrepreneurs in 2026:

- Registration as a sole proprietor – 26 GEL within one business day or 75 GEL for expedited processing.

- Registration of an LLC – 200 GEL within one business day or 400 GEL on the day the application is submitted.

- Accounting services—approximately 130–250 GEL per month for small businesses. For companies with more complex accounting, the cost may exceed 500 GEL.

- Banking services—depends on the bank, account type, currencies, and the selected plan. Individual transfers and transactions are charged separately.

- Registered address and documents – costs for renting an address, translations, notarization, and registration assistance are calculated separately.

- Office rent – depends on the city, square footage, and location. Commercial real estate is typically more expensive in the central and tourist districts of Tbilisi and Batumi.

Official registration fees are published on the website of the National Agency of Public Registry of Georgia. Estimated accounting costs are based on publicly available rates from local companies.

For example, a sole proprietor who works remotely and does not rent an office may only incur registration costs, bank fees, taxes, and accounting services. For a brick-and-mortar business, the budget increases significantly due to rent, the purchase of goods and equipment, and labor costs.

We previously reported that Georgia is raising the minimum threshold for a real estate investor visa to $150,000.

What are the risks and drawbacks of doing business in Georgia?

Despite low taxes and affordable registration, doing business in Georgia comes with a number of restrictions. Foreigners planning to work remotely, take advantage of the 1% tax rate, or move to the country to develop their own business should be particularly cautious.

Key risks for entrepreneurs:

- The 1% tax rate is not available to everyone. This special tax regime has restrictions based on business activities and income levels. Additionally, the tax is calculated without deducting standard operating expenses, so businesses with low profit margins may not achieve the expected savings.

- New immigration requirements. As of March 1, 2026, foreigners conducting business in Georgia generally require a work permit. Depending on the circumstances, an appropriate visa or residence permit may also be required.

- Tax Residency. Registering as an entrepreneur in Georgia does not automatically terminate tax obligations in another country. It is important to consider the place of actual residence, business management, and international tax treaties.

- Bank due diligence. Georgian banks may require proof of the source of funds, contracts with clients, and information about business operations. Company registration does not guarantee that a bank account will be opened.

- Limitations of the domestic market. Georgia’s population is approximately 3.7 million. Scaling certain types of businesses may require reaching international clients.

- Seasonality in certain industries. Tourism services, hotels, and restaurants in resort regions may experience significant fluctuations in demand throughout the year.

Working with foreign clients requires special attention. The place of business registration, the client’s country, and the source of income do not always align for tax purposes. Therefore, the applicability of Georgian tax incentives to international transactions must be assessed on a case-by-case basis.

Key takeaway: Low taxes in Georgia do not guarantee low overall business costs. Before registering a business, it is advisable to calculate the tax burden, verify immigration requirements, and assess the growth potential of the chosen business sector.

Investments, opening a company in another country, remote launch of a representative office or team relocation require a clear legal strategy. A personal business lawyer accompanies the entire process: from choosing a jurisdiction and tax model to visa processing and asset protection.

Engage a personal business lawyer and ensure safe relocation and development of your company abroad!

We remind you! Are you planning to invest in real estate under the Golden Visa program? We have already told you which programs in 2025 have become the most profitable for investors. The article compares the UAE, Greece, Turkey, Latvia and Asian countries, the real return on real estate and key risks that should be considered before investing.