How to Register as an Individual Entrepreneur in Georgia (and Benefit from the 1% Tax Rate)

For globally mobile professionals, Georgia offers one of the most accessible and tax-efficient business setups in the world. By registering as an Individual Entrepreneur (IE) and applying for Small Business Status (SBS), individuals can legally operate with a 1% tax rate on qualifying income, all while maintaining flexibility and minimal overhead.

This guide walks you through how the structure works, how to get started, and what to keep in mind along the way.

Why Choose the IE + SBS Regime?

Georgia’s Individual Entrepreneur status is designed for solo operators and freelancers, offering a simplified legal structure and tax treatment. Once registered, you can apply for Small Business Status (SBS), which reduces your income tax to just 1% on turnover (up to 500,000 GEL per year, roughly €165,000).

There’s no requirement to incorporate a company or hire staff. You can operate under your own name, issue invoices, and access the Georgian tax system with full legal recognition through minimal paperwork and low cost.

Step 1: Preparing Your Documents

To begin, you’ll need two essentials:

1. A valid passport, which must be notarized and translated into Georgian.
2. A Georgian legal address for registration purposes.

This address must be a formal lease or residential property. Short-term rentals like hotels or Airbnb are not accepted by the tax authorities. If you are residing in Georgia, you can use your home rental contract. If not, you’ll need to secure a local address that complies with registration requirements.

Step 2: Registering as an Individual Entrepreneur

Once your documents are ready, you can register either:

• In person by visiting a Public Service Hall in Georgia
• Remotely, by granting Power of Attorney to someone who can file on your behalf

The registration itself is straightforward. You’ll be issued a Georgian taxpayer number and officially recognized as an Individual Entrepreneur. From that point, you’ll be able to issue invoices and open a Georgian business bank account.

Step 3: Applying for Small Business Status (SBS)

After registering as an IE, the next critical step is applying for Small Business Status with the Georgian Revenue Service. This is what activates the 1% tax rate on your turnover.

⚠️ Important: You should wait until SBS is approved before issuing invoices or receiving business income. Any income earned before SBS approval is taxed at the default 20% rate.

The application is usually processed within a few working days. Once approved, your tax obligations become extremely simple: just a monthly declaration and 1% tax on income.

Step 4: Opening a Business Bank Account

To operate fully within the Georgian system, you’ll need a local bank account. This account is used to receive client payments, pay taxes, and manage business finances.

You can open an account once your IE status is confirmed. The process is typically fast and accessible, even for non-residents, though some banks may require an in-person visit.

Ongoing Compliance and Conditions

After registration, staying compliant is easy, but there are a few key conditions to maintain:

• Monthly declarations: Even if you earn nothing in a given month, you must file a zero-income report.
• Annual turnover limit: You must not exceed 500,000 GEL (~€165,000) in a calendar year. If you do so for two consecutive years, you may lose your SBS status.
• Eligible activities: Certain business types (e.g. financial services, legal consulting, gambling) are excluded from SBS benefits. Make sure your declared activity falls within the approved list.

There are no mandatory social contributions or complex reporting obligations, only the monthly flat tax on income and basic bookkeeping.

Final Thoughts

Georgia’s IE + SBS framework is one of the most accessible and tax-friendly systems in the world for internationally active individuals. With a 1% tax rate, minimal paperwork, and the option to operate fully remotely, it’s a compelling alternative to more complex structures.

If you're looking to simplify your setup while keeping more of what you earn, this might be the best place to start.