Frequently Asked Questions – Individual Entrepreneurship in Georgia

Below you can find answers to the most common questions about registering an Individual Entrepreneur (IE) in Georgia and obtaining Small Business Status with the 1% taxation regime. This section is designed to help freelancers, remote professionals, consultants, and entrepreneurs understand the legal, tax, and practical aspects of operating a business as a sole entrepreneur in Georgia.

1. What is Individual Entrepreneurship in Georgia?

Individual Entrepreneurship (IE) is a legal form of business activity where a natural person conducts business under their own name. Unlike an LLC, it is not a separate legal entity. The entrepreneur personally operates the business, signs contracts, issues invoices, and pays taxes as a self-employed individual.

2. Who can register as an Individual Entrepreneur in Georgia?

Any natural person can register as an Individual Entrepreneur, including foreign nationals. Georgian citizenship or residency is not required to start this type of business.

3. What is Small Business Status in Georgia?

Small Business Status is a special tax regime available to Individual Entrepreneurs. Once approved by the Georgian Revenue Service, the entrepreneur can pay only 1% income tax on annual turnover up to 500,000 GEL.

4. What is the tax rate for Individual Entrepreneurs with Small Business Status?

Entrepreneurs with Small Business Status pay only 1% tax on gross turnover up to 500,000 GEL per year. If the turnover exceeds this limit, the tax rate may increase according to Georgian tax regulations.

5. What documents are required to register Individual Entrepreneurship?

Typically you will need a valid passport, a Georgian legal address, and an application submitted to the Public Service Hall or National Agency of Public Registry.

6. Do foreigners need residency in Georgia to register an IE?

No. Foreign nationals can register an Individual Entrepreneur without having Georgian residency. However, business activity in Georgia may help support future residence permit applications.

7. How long does it take to register Individual Entrepreneurship?

The registration procedure is very fast. In most cases, an Individual Entrepreneur can be registered within one working day.

8. Can Individual Entrepreneurship be registered remotely?

Yes. The process can be completed remotely using a notarized and apostilled Power of Attorney allowing a local representative to submit documents on your behalf.

9. Is a legal address required for Individual Entrepreneurship?

Yes. Georgian law requires a legal address for business registration. This address may be a residential property or a virtual legal address provided by a landlord or business service provider.

10. What is legal address consent?

Legal address consent is a written declaration from the property owner allowing the entrepreneur to use their address for business registration. It is linked to a cadastral property number and submitted to the Public Service Hall.

11. Can freelancers work as Individual Entrepreneurs in Georgia?

Yes. Many freelancers, IT professionals, consultants, digital marketers, designers, and remote service providers operate as Individual Entrepreneurs in Georgia.

12. Do Individual Entrepreneurs need to open a business bank account?

Opening a business bank account is recommended but not mandatory. Entrepreneurs may receive payments through personal accounts or dedicated business accounts in Georgian banks.

13. What accounting obligations do Individual Entrepreneurs have?

Entrepreneurs must maintain basic accounting records and submit periodic tax declarations to the Georgian Revenue Service. Many entrepreneurs use professional accountants to ensure full compliance.

14. What happens if turnover exceeds 500,000 GEL?

If annual turnover exceeds 500,000 GEL, the entrepreneur may lose Small Business Status and will be taxed under a different regime according to Georgian tax law.

15. Is VAT registration required for Individual Entrepreneurs?

VAT registration becomes mandatory if taxable turnover within Georgia exceeds 100,000 GEL per year.

16. Can Individual Entrepreneurs hire employees?

Yes. Individual Entrepreneurs may hire employees and must comply with payroll taxes and employment regulations in Georgia.

17. What types of business activities are allowed?

Most service activities are allowed, including consulting, IT services, marketing, freelancing, online business, design, and digital services.

18. Are there restricted activities for Small Business Status?

Yes. Certain regulated professions such as legal services, medical services, financial services, and some licensed activities cannot qualify for Small Business Status.

19. Is Individual Entrepreneurship suitable for digital nomads?

Yes. Georgia is popular among digital nomads because the Individual Entrepreneur structure is simple, tax-efficient, and open to foreign nationals.

20. What is the difference between an Individual Entrepreneur and an LLC?

An Individual Entrepreneur operates personally and is fully responsible for business obligations. An LLC is a separate legal entity that provides limited liability protection.

21. Can Individual Entrepreneurs work with international clients?

Yes. Many entrepreneurs in Georgia provide services internationally and invoice foreign clients in EUR, USD, or other currencies.

22. Can Individual Entrepreneurship help obtain a residence permit?

Operating a registered business in Georgia may support applications for residence permits because it demonstrates economic activity and legal income.

23. Is Individual Entrepreneurship suitable for startups?

Yes. Many entrepreneurs start as Individual Entrepreneurs due to the simplicity and low costs, and later convert to an LLC when their business grows.

24. What government authority registers Individual Entrepreneurs?

Registration is handled by the National Agency of Public Registry through the Public Service Hall in Georgia.

25. Can accounting and tax reporting be outsourced?

Yes. Many entrepreneurs outsource their accounting to professional accounting firms that handle tax declarations, payroll, and financial compliance.

26. Is Individual Entrepreneurship a good option for international freelancers?

Yes. Due to the simplified registration procedure, low taxes, and international banking options, Georgia has become an attractive jurisdiction for freelancers and remote entrepreneurs.

27. Can Individual Entrepreneurs issue invoices?

Yes. Individual Entrepreneurs can legally issue invoices, sign contracts, and receive payments from clients both in Georgia and abroad.

Need assistance with registering Individual Entrepreneurship in Georgia? Our team can assist with the full registration process, legal address, Small Business Status activation, bank account setup, and ongoing accounting services.