Georgia

What is the 1% small business regime?

This is the regime that made the country particularly well known among self-employed professionals. A registered individual entrepreneur may apply for small business status, which reduces taxation to 1% of turnover provided that annual turnover does not exceed GEL 500,000, or approximately €165,000. Above this threshold, the rate increases to 3% (Georgian Revenue Service). This is a percentage of turnover, not profit, making the calculation particularly attractive for low-cost service businesses and less so for activities with significant operating expenses. Certain activities are excluded from the regime, including a number of regulated professions and consultancy activities in certain configurations. Eligibility must therefore be assessed by reference to the precise nature of the activity, rather than its generic description.

How does Georgian corporate income tax work?

Georgia adopted the Estonian model on 1 January 2017, and the regime's appeal extends well beyond its headline rate. Profits are not taxed when they are generated: tax is due only when profits are distributed, at a rate of 15% (Tax Code of Georgia). A company that fully reinvests its profits therefore incurs no taxation, regardless of how long the profits are accumulated. This mechanism is particularly well suited to growing businesses that finance their expansion through retained earnings, and it produces a significant cash-flow benefit compared with an annual taxation regime. In return, it requires genuine accounting discipline, as certain expenses may be treated as deemed distributions and taxed accordingly.

Is one year in Georgia without a visa sufficient to become tax resident?

No, and the confusion is common because the two arrangements are exceptionally flexible. The right available to French nationals to stay for 365 days without a visa is a remarkable immigration facility: it allows individuals to test the destination without any prior application. Georgian tax residence is based on a separate criterion, namely actual presence in excess of 183 days over a 12-month period, and results in a certificate issued by the authorities. More importantly, obtaining Georgian tax residence is not enough: the individual must also have ceased to be tax resident in their country of origin, which is an entirely separate issue. A French national spending six months in Tbilisi and six months in France, with their family remaining in France, remains a French tax resident.

What are the banking difficulties in Georgia?

They have increased and need to be addressed clearly. The Georgian banking sector has become considerably more restrictive in recent years as a result of the regional environment and pressure from international correspondent banks. Opening an account for a non-resident or for a structure conducting international business has become lengthy and uncertain, and refusals without detailed explanations are not uncommon. Existing accounts are subject to periodic reviews that may result in account closures. There is also a practical point that is often overlooked: some European clients, and particularly certain compliance departments, approach Georgian invoicing with caution, which can slow down collections or complicate commercial relationships. These factors need to be considered as part of the decision alongside the tax rate itself.

Is Georgia a stable destination?

This is an issue we address directly rather than avoiding it. Georgia offers a liberal business environment, an efficient administration and a very low cost of living. At the same time, it is experiencing significant domestic political tensions, a European integration process whose trajectory has been materially affected over time, and immediate geographical proximity to Russia alongside unresolved territorial conflicts within its own territory. These factors do not make relocation impossible, and many entrepreneurs live there without difficulty. They do, however, justify avoiding the concentration of one's entire wealth and banking arrangements in the country and maintaining alternative options. We recommend Georgia for a light operational business, but rarely as the sole foundation for significant wealth.

Is Georgian 1% status enforceable against the French tax authorities?

Georgia is not a member of the European Union, making the conditions for deferral of payment of the French exit tax less favourable and requiring them to be modelled where the individual holds interests exceeding the relevant thresholds. A tax treaty links the two countries and provides for the allocation of taxing rights as well as tie-breaker criteria in cases of dual residence. The relatively limited economic ties between France and Georgia make demonstrating the transfer of one's actual life all the more important: an application based solely on a residence certificate, without occupied accommodation, genuinely conducted activity from Tbilisi or the relocation of one's family, is fragile. We build the documentation supporting the relocation from day one.

Is registration for Georgian VAT required?

Yes, once a threshold well below that applicable to the small business regime is exceeded, and this distinction is consistently surprising. VAT registration becomes mandatory when turnover exceeds GEL 100,000 over a rolling 12-month period, with VAT applying at 18% (Tax Code of Georgia). An entrepreneur benefiting from the 1% rate may therefore simultaneously be subject to VAT, with the corresponding invoicing and reporting obligations. The two thresholds—GEL 100,000 for VAT and GEL 500,000 for small business status (Georgian Revenue Service)—are independent, and confusing them can result in costly tax adjustments.

What are the monthly filing obligations in Georgia?

An income tax return must be filed each month through the taxpayer's personal account on the tax authority's online portal, including for a month in which there is no turnover, and the corresponding tax must be paid within the applicable deadline (Georgian Revenue Service). Repeated failures to file expose the taxpayer to penalties and may result in the status being challenged or withdrawn. This requirement, which is rarely mentioned in descriptions of the 1% regime, requires functional local banking facilities, continuously maintained accounting records and regular administrative involvement. In practice, it acts as an initial filter between genuine relocation projects and registrations conducted remotely.

How are dividends from a Georgian company taxed?

Through two successive layers, often reduced in presentations to the single 15% rate. The company pays the Estonian-style tax at 15% when profits are distributed (Tax Code of Georgia), and withholding tax is then applied to the dividend paid to the individual shareholder. The cumulative tax burden therefore exceeds the headline rate, while remaining below European standards. The mechanism clearly rewards reinvestment: a company that retains its profits incurs no taxation, regardless of how long they are accumulated, producing a significant cash-flow benefit for a growing business.

Is there a tax treaty between France and Georgia?

Yes. Georgia is among France's treaty partners (list of tax treaties concluded by France). The treaty provides hierarchical tie-breaker criteria in cases of dual residence and establishes mechanisms for eliminating double taxation, clearly distinguishing Georgia from Paraguay or the Bahamas. It may also, where the relevant administrative assistance and collection provisions are satisfied, allow payment of the French exit tax to be deferred without providing security (Article 167 bis of the French General Tax Code). This treaty protection is a genuine advantage of the Georgian structure, and one that is systematically overlooked in presentations focused solely on the 1% rate.

Are my Georgian bank accounts reported to the French tax authorities?

Yes. Georgia applies the OECD Common Reporting Standard and automatically exchanges information concerning financial accounts held by non-residents. The country does not appear on France's list of non-cooperative states and territories (Order of 15 April 2026), which limits the penalty applicable in the event of a failure to report to the ordinary amount rather than the increased amount (BOFiP, penalties for failures to report foreign accounts). As long as you remain a French tax resident, every account opened in Tbilisi must be included in your annual tax return, and failure to report also extends the tax authorities' assessment period to ten years.

What social protection is available in Georgia?

A public system exists but remains limited, and in practice coverage relies on private insurance, the cost of which remains moderate by European standards. Routine healthcare is accessible in Tbilisi and Batumi, while major medical procedures frequently involve travelling to Turkey or Europe. A French national leaving the French system loses their existing rights and must arrange their own coverage; membership of the Caisse des Français de l'étranger can be used to maintain pension-related rights. This factor, combined with the absence of an approved French-language school system, significantly limits the country's appeal for a family.

Does Georgia tax wealth and inheritances?

A local property tax exists, based on real estate assets and adjusted according to household income, but there is no general wealth tax or inheritance tax comparable to the French system. From the French perspective, Article 750 ter remains applicable: assets located in France remain taxable, while worldwide assets may be taxable where the heir has been resident in France for six of the preceding ten years (BOFiP, territorial scope of inheritance and gift taxes). For an entrepreneur whose children have remained in France, the Georgian advantage in terms of inheritance is therefore largely neutralised, and this issue should be addressed before relocation.

What is the real cost of relocating to Georgia?

It is low on paper and higher in practice. Registering as an individual entrepreneur and obtaining small business status costs a few hundred lari, while the cost of living in Tbilisi remains well below European standards. Against this, one must factor in private health insurance, regular trips abroad, accounting support for the monthly filings (Georgian Revenue Service), and the absence of a banking ecosystem suited to significant wealth. For a self-employed individual who genuinely relocates, the economics remain very attractive. For a structure operated remotely, they do not.