Individual entrepreneur and small business status in Georgia

Individual entrepreneur Georgia: what the status is

An individual entrepreneur is a person registered to do business in their own name, without forming a company. The Tax Code calls this an "entrepreneur natural person". Small business status "may be granted to an entrepreneur natural person" (Tax Code Art. 88(1)). The IE applies to the tax authority, which issues a certificate (Art. 89(1)).

So there are two steps:

1. Register as an IE with the National Agency of Public Registry (NAPR), usually at a Public Service Hall, the state office where you file most registrations.
2. Apply separately to the Revenue Service, the state tax office, for small business status on rs.ge.

NAPR's fees page, as shown in search results, lists GEL 26 for IE registration within 1 working day, or GEL 75 for same-day service. We did not open the page itself. According to the advisory firm Gegidze, registration does not require a residence permit.

Rates and the GEL 500,000 limit

Some older guides still give a limit of GEL 100,000 and a rate of 5%. That was the regime before 2018. The current text has the GEL 500,000 limit and the 1% rate.

Why freelancers with foreign clients use it

The tax base is Georgian-source income. That sounds as if foreign clients fall outside it. They usually do not. Under Art. 104(1)(c.g), a service counts as delivered in Georgia when the provider is a Georgian resident and the client is in another state. So a resident IE's fees from foreign clients are Georgian-source and fall inside the 1% base. Without small business status, the same fees would face the standard 20% rate. Foreign income and Georgian tax explains the source rules.

How you lose small business status

Art. 89(2) lists five grounds:

1. Gross income exceeded GEL 500,000 (or GEL 700,000 for the tourism operators above) in each of 2 calendar years. Revocation then applies from 1 January of the next year (Art. 89(3)).
2. You ask for it.
3. You carry out an activity the Government has excluded (Art. 88(2)).
4. You receive at least 3 fines in a calendar year for cash-register breaches.
5. You stop being an entrepreneur natural person.

Some secondary sources say one year over the limit ends the status. The statute requires two years. In a single year over GEL 500,000 you keep the status, but income from the start of the month in which you pass the limit until the end of that year is taxed at 3%.

VAT registration does not end small business status. It ends micro business status, a separate regime. A small business that must register for VAT does so under Art. 165 and records its inventory (Art. 92).

Excluded activities

The Government sets a list of activities that cannot use small business status, together with the Parliament's Financial-Budget Committee (Art. 88(2)). Commonly cited examples are consulting, notary and legal-type services and other professional services, currency exchange, and activities that need a licence or permit.

VAT

VAT registration is mandatory within 2 business days of exceeding GEL 100,000 of VAT-taxable supplies in any 12 consecutive calendar months (Art. 165(1)). You can also register voluntarily (Art. 165(6)). The VAT rate is 18% (Art. 166).

Many services to foreign clients fall outside Georgian VAT. For a service to a business, the place of supply is where the client is established (Art. 162^1(3)(a)). For listed services to private customers abroad, the place of supply is the customer's location (Art. 162^1(14)). The list includes electronically supplied services, consultancy, engineering, legal and accounting services, advertising, data processing and IP licensing. When the place of supply is outside Georgia, the service is not provided in Georgia (Art. 162^1(1)), so no Georgian VAT applies.

Crypto and the GEL 500,000 limit

It is disputed whether proceeds from crypto sales count toward the GEL 500,000 limit. One source says they do, while staying tax free. We have not confirmed this either way.

Other small regimes

• Micro business: no hired staff, gross income up to GEL 30,000 a year, 0% income tax (Arts. 84(1), 86). The status ends on VAT registration or if inventory exceeds GEL 45,000 (Art. 85(2)).
• Fixed tax: GEL 1 to 2,000 per object, or 3% of revenue, for activity types set by the Government (Art. 95^3).

Pension contributions

The funded pension scheme is voluntary for self-employed people, which includes an IE. Once you join, you pay 4% of self-employed income (Law on Funded Pension, Art. 3(3), 3(6)(d), 21(3)). The law covers foreigners only if they hold a permanent residence permit (Art. 1(4)).

IE status does not give you a right to stay or work

Registering as an IE and getting small business status are tax steps. Neither one is a residence permit.

Since 1 March 2026, a foreigner may work or do business in Georgia only with the right to work (a work permit from the State Employment Support Agency) and a work residence permit, a D1 visa or another residence permit (Law on Labour Migration, Art. 13^2, 13^3). Self-employed foreigners apply for the right to work themselves. Enforcement against self-employed foreigners already active on 1 March 2026 started on 1 May 2026. The older practice of getting a work residence permit just by registering an IE and meeting a GEL 50,000 turnover test no longer works on its own.

The Law on Labour Migration exempts people who work for, or provide services to, a non-resident where the work relates to that non-resident's activity outside Georgia (Art. 1(4)).

An IE with small business status who does qualifying IT work, has the right to work, at least 2 years of IT experience and at least USD 25,000 a year in pay may qualify for the IT residence permit (Aliens Law Art. 15(l)). For the permit routes, see the business residence permit, the work residence permit and the work permit.