Georgia: the 1% IE status remains popular with freelancers

Georgia offers individual entrepreneurs a status that replaces taxation of profit with a levy based on turnover.

The rate is 1%¹ of turnover, up to an annual ceiling of up to GEL 500,000², or roughly about €170,000³.

Above the ceiling, the rate rises to 3%⁴. Exceeding it does not therefore push the entrepreneur into the ordinary regime, which is gentler than in most comparable regimes.

By comparison, Georgia's ordinary regime taxes personal income at 20%⁵ and dividends at 5%⁶.

The status requires prior registration with the tax authorities. It does not apply automatically, and certain activities are excluded from it — notably regulated professions and certain consulting set-ups.

The scheme's administrative simplicity is real and is part of its appeal: registration takes a few days, the return is monthly and fits in a few fields, and the Georgian tax authority has an online portal available in English.

The first concerns the tax base. The levy applies to receipts, not to profit. A consulting activity with no expenses is greatly favoured; a low-margin activity is penalised. The rate means nothing until it has been set against the actual margin.

The second concerns the legal form. The status applies to an individual trading in their own name, not to a company. The entrepreneur is therefore liable for business debts with their personal assets.

The third concerns social protection. The regime comes with no cover at all: pension, health and income protection must be financed separately, and their cost considerably reduces the apparent gap with a European regime.

These three trade-offs do not disqualify the scheme, but they determine who it is for: a high-margin, young, mobile freelancer who is able to organise their own social protection.

A fourth, more practical constraint deserves to be added: banking. International invoicing from a Georgian individual business regularly runs up against the compliance procedures of European banks, and some institutional clients refuse to pay this type of service provider.

This point does not show up in a rate comparison, but it sometimes decides whether the arrangement is viable. It should be checked with your own clients before registering, not after.

Georgia allows nationals of many countries, including France, to stay for 365 days⁷ without a visa. This duration has no equivalent, and it is the second pillar of the country's appeal.

This stay does not, however, amount to a residence permit or to tax residency. Tax residency is acquired beyond 183 days⁸ of presence per year.

A freelancer can therefore be registered in Georgia without being a tax resident there, and vice versa. The two are distinct and handled separately.

This is where the main misunderstanding lies. A French national who remained domiciled in France and registered in Georgia would remain taxable in France, and the Georgian levy would be added on top rather than replacing French tax.

For companies, Georgia also applies a tax deferral comparable to the Estonian model: 0%⁹ on undistributed profit, 15%¹⁰ on distributed profit.

• The rate of 1%¹ applies to turnover, not to the margin.
• The status requires registration and excludes certain activities.
• It comes with no social protection: this item must be financed separately.
• The visa-free stay of 365 days⁷ moves neither your right of residence nor your tax residency.
• Above the ceiling, the rate rises to 3%⁴.

Finally, the political and regional context is a factor in its own right. Georgia has experienced sustained internal tensions, and its geographical position, on the doorstep of Russia and the Caucasus, is a risk factor that tax comparisons ignore. A long-term plan must take it into account just as much as the rate, and probably before it.