Base your IT or logistics staff in Georgia. Only 5% tax on salaries.

For a foreign company building out IT engineering capacity, technical operations, or maritime and logistics teams, the staffing decision typically comes down to where the labour cost economics work. Talent availability matters, but so does the total payroll burden — gross salaries plus employer-side social charges plus corporate-level tax on the distributed profits the operation generates. Georgia's International Company Status framework, established under Decree N619 of October 8, 2020, provides a substantive answer for IT and Maritime sector operations.

Under ICS, qualifying employees pay 5% personal income tax on their salaries — down from the standard 20% Georgian rate. Combined pension contributions for Georgian citizens and permanent resident employees run 4% total (2% from the employee, 2% from the employer), the same as under any Georgian employer. Foreign employees not subject to Georgian permanent-resident pension status pay only the 5% PIT. The corporate-level framework similarly favours ICS-status companies — 5% Corporate Income Tax on distributed profits versus the standard Georgian rate, and 0% withholding tax on dividend distributions to shareholders versus the standard rate.

For a foreign company evaluating Georgia as a staffing base, the math is direct: total payroll-side tax burden runs at 9% combined for Georgian-citizen employees (5% PIT + 4% pension) and 5% for foreign employees, against materially higher equivalents in alternative jurisdictions. The corporate-level treatment delivers similar advantages for the parent company's distribution mechanics.

This article walks through what ICS actually does for a staffing decision, who qualifies, the substance requirements, and the structural argument for basing IT or maritime/logistics operations in Georgia.

What ICS does for a staffing decision#

The substantive framework under Decree N619 is consistent and well-documented in the Tax Code provisions implementing the regime. Three benefit layers attach to qualifying ICS companies, all relevant to a staffing decision.

Salary tax — 5% PIT on qualifying employees. Personal income tax on salaries paid by an ICS company to its employees runs at 5%, replacing the standard 20% rate that applies under ordinary Georgian employer arrangements. The 15-percentage-point reduction is the central staffing-decision lever. For a company hiring engineering, technical, or operational staff at salary levels typical of regional or international IT and maritime work, the differential compounds rapidly across a team.

Pension contributions — 4% combined for Georgian citizens and permanent residents. Pension contributions follow the standard Georgian framework regardless of ICS status: 2% from the employee + 2% from the employer = 4% combined, applicable to Georgian citizens and permanent residents. Foreign employees who are not Georgian permanent residents do not trigger the pension contribution. This means total Georgian payroll tax burden for an ICS company is 9% combined for Georgian-citizen staff (5% PIT + 4% pension) and 5% for foreign-employee staff.

Corporate income tax — 5% on distributed profits. ICS companies pay 5% CIT on profits distributed as dividends, against the standard Georgian rate. Reinvested profits remain untaxed under the Estonian model that applies to all Georgian LLCs. The 5% CIT is levied at the time of distribution; profits retained inside the company for further investment, hiring, or operational expansion are not taxed at the Georgian level.

Dividend withholding tax — 0% on distributions to shareholders. Distributions from an ICS company to its shareholders are not subject to Georgian withholding tax, against the rate applicable under non-ICS treatment. This is materially better than the framework that applies to Virtual Zone companies (which retain the dividend withholding even at 0% CIT). For a parent-company structure where profits flow through to foreign shareholders, the 0% withholding eliminates a layer of tax friction that compounds across the dividend stream.

Property tax — 0% on property used for permitted activities. Property used to carry out the ICS company's qualifying activities is exempt from Georgian property tax (except land). For a foreign company building out a Georgian operating footprint with offices, equipment, and operational infrastructure, the property tax exemption is a meaningful operating cost reduction.

Reduced rate on qualifying expenses. Where the ICS company incurs operating expenses inside Georgia per a Government Ordinance, the company can reduce the taxable profit base by those expenses. This further compresses the effective CIT rate on profits attributable to Georgian operating activity.

For a foreign company comparing payroll location alternatives — Eastern Europe (Poland, Romania, Bulgaria), Western Europe (Portugal, Spain, Greece, Estonia), Asia (Vietnam, Philippines, India), or other emerging markets — the ICS payroll framework delivers materially lower total cost on equivalent gross salary inputs. The corporate-level treatment delivers further upside on the distribution mechanics. The combination is substantively distinctive within the regional and international competitive set.

Who qualifies under Decree N619#

ICS is sector-restricted and substance-gated. Decree N619 limits the regime to companies operating in specifically-enumerated activities; the activity scope is narrower than general IT or general logistics work.

Qualifying IT activities. The Decree's IT scope covers software publishing (including games and applications), software development services, IT services in defined categories, and adjacent technology activities specifically listed in the Government's enumeration. General IT consulting without a software-creation component, internet marketing, e-commerce operations, and other broadly-described "IT-adjacent" activities are not within ICS's qualifying scope unless the activity falls within the specifically-listed categories.

Qualifying Maritime activities. The Decree's Maritime scope covers shipping, vessel operation, crewing, ship management, and related maritime-services activities specifically listed in the Government's enumeration. The framework reflects Georgia's positioning at the Caspian-Black Sea logistics corridor and the policy intent of attracting maritime operations to Georgian-flag and Georgian-managed vessels.

Logistics scope. Logistics activities falling within the Maritime sector enumeration qualify; broader logistics operations (warehousing, last-mile delivery, freight forwarding without maritime component) may not be within scope unless they connect to the qualifying maritime activities. For a foreign company evaluating ICS for logistics staff, the activity scope test is the gating question — confirm that the specific operational activities fall within Decree N619's enumeration before structuring the application around ICS.

Two-year operating history requirement. Applicants must demonstrate at least 2 years of operating experience in the qualifying sector. This requirement applies in three alternative forms:

• The Georgian enterprise itself has 2+ years of operating history in the qualifying activity, OR
• The Georgian enterprise represents a foreign (non-resident) enterprise with 2+ years of operating experience in the sector, OR
• The Georgian enterprise is owned by a parent enterprise (Georgian or foreign) with 2+ years of experience and majority ownership (>50%) of the Georgian entity

For a foreign company with 2+ years of established operations in IT or Maritime sectors, the third form typically applies — incorporate a Georgian subsidiary, the parent qualifies the subsidiary's track record, ICS application proceeds.

Substance requirements. The Georgian enterprise must demonstrate physical substance in Georgia. The Decree language requires the company to "carry out basic income-generating activities in Georgia and have adequate human resources to carry out such activities, with the necessary qualifications." In practice, this means a real operating footprint — Georgian premises (office space, operational facilities), Georgian-based staff actually performing the work, and operational reality consistent with the activity description.

Cannot be in a Free Industrial Zone. ICS and FIZ are mutually exclusive; a Georgian company cannot operate under both regimes simultaneously.

For a foreign company evaluating ICS for IT or maritime/logistics staffing, the substance requirements are the substantive entry cost. ICS is not a pure tax wrapper for offshore operations — the regime is designed to attract genuine operating activity to Georgia, and the application succeeds when the company genuinely builds operating capability in Georgia. Companies attempting to apply ICS as a thin tax wrapper without substantive Georgian footprint face rejection on substance grounds.

How the staffing math works#

For a foreign company evaluating Georgia as a staffing base, the practical comparison runs as follows on a representative staffing scenario.

A foreign company employs 10 software engineers at gross salary of EUR 60,000 per year per engineer (typical regional senior-engineer band). The total annual salary cost is EUR 600,000 in gross compensation.

Standard Georgian employer treatment. PIT at 20% on EUR 600,000 = EUR 120,000 PIT. Pension contributions at 4% combined for Georgian citizens and permanent residents = EUR 24,000. Total Georgian-side payroll tax burden = EUR 144,000. Effective burden on top of gross salary: 24%.

ICS-qualifying Georgian company. PIT at 5% on EUR 600,000 = EUR 30,000. Pension contributions at 4% combined = EUR 24,000. Total Georgian-side payroll tax burden = EUR 54,000. Effective burden on top of gross salary: 9%.

Differential. EUR 90,000 saved annually on the same staff at the same gross compensation. Across 10 engineers, the annual saving is a meaningful operating advantage. Across multi-year operations, it compounds to substantial cumulative cost reduction.

The foreign-employee math is more favourable still — for foreign-passport engineers without Georgian permanent residency, the pension contribution doesn't apply, leaving 5% total payroll tax versus 20% standard. The differential expands to 15 percentage points, with EUR 90,000 saved on the same scenario.

The corporate-level math compounds further. If the foreign company distributes profits from the Georgian operation to its parent, ICS treatment delivers 5% CIT and 0% dividend withholding versus the higher combined burden under standard Georgian treatment. On EUR 100,000 of distributed profit, ICS yields EUR 95,000 to the parent versus standard treatment's EUR 80,750. The differential is 17.8 percentage points effective at the distribution stage.

For a foreign company building substantial Georgian operating activity — 20+ engineers, multi-year horizon, with profits flowing to foreign shareholders — the combined payroll and corporate-level advantages of ICS produce annual savings into the seven figures relative to standard Georgian operating treatment, and substantially more relative to high-tax-jurisdiction equivalents.

Application and operations#

ICS application runs through the Revenue Service of Georgia under the framework established by Decree N619 and supplementary Government implementing procedures.

Pre-application — Georgian enterprise formation. The Georgian operating entity must be registered as a Georgian LLC under the Law on Entrepreneurs before ICS application proceeds. Standard Georgian company registration runs through the National Agency of Public Registry within 24 hours, executable remotely through Power of Attorney. The Georgian LLC is established first; ICS status is applied for separately.

Application submission. The application package includes documentation of the qualifying activity (operational descriptions, project history, contracts), demonstration of the 2-year operating history (parent company financials or Georgian-entity track record), and substance documentation (Georgian premises lease, employee structures, operational infrastructure). The Revenue Service reviews against Decree N619 criteria.

Decision timeline. Standard processing under the Decree typically renders a decision within 10 business days of complete documentation submission. Incomplete applications or substance questions extend the timeline through clarifying rounds.

Approval and ongoing compliance. Once granted, ICS status applies to the company indefinitely subject to ongoing compliance with the activity, substance, and operating-history requirements. The Revenue Service can revoke status if the company drifts outside the framework — ceasing the qualifying activity, losing substantive Georgian footprint, or generating substantial revenue from non-qualifying activities. Continuing compliance is the operating cost; routine annual reporting and the Georgian accountant relationship handle the day-to-day compliance.

Payroll operations. ICS-status companies operate Georgian payroll through standard Revenue Service-integrated payroll systems. Monthly salary payments, PIT withholding at 5%, pension contribution withholding for qualifying employees, and the corresponding monthly tax declarations all run through the standard Georgian payroll framework. The 5% PIT applies at the source (the company withholds 5% from each paycheck and remits to Revenue Service); employees receive net salary equivalent to 95% of gross.

Banking infrastructure. The Georgian operating company opens a corporate bank account at one of the major Georgian commercial banks for payroll, supplier payments, and operational banking. The corporate banking framework runs alongside the company's parent-company financial relationship and the broader cross-border payment infrastructure.

When ICS is the right answer#

ICS is structurally efficient when several conditions hold simultaneously.

The foreign company has 2+ years of established operations in IT or Maritime sectors meeting Decree N619's qualifying activity scope. New companies in their first or second operating year cannot apply for ICS directly; they operate under standard Georgian LLC treatment until the operating history threshold is met, then transition.

The foreign company is willing to build genuine Georgian operating substance — Georgian premises, Georgian-based staff actually performing the work, real operational footprint. Companies looking for a thin tax wrapper without substantive Georgian operations are not the target audience for ICS and face substance-driven application rejection.

The staffing scale is meaningful — typically 5+ engineers or operational staff justifies the structuring overhead and produces saving levels that materially exceed setup and ongoing operating costs. For very small teams, the operational complexity of cross-border employment, payroll, and ICS compliance may exceed the net tax saving on the limited headcount.

The foreign company plans dividend distributions to foreign shareholders or anticipates corporate distribution events. For companies retaining all profits indefinitely, the 0% dividend withholding is theoretical rather than operative; the 5% CIT on distributed profits remains the operative differentiator at the corporate level.

For companies meeting these conditions, ICS is structurally attractive and the math typically produces substantial annual savings. For companies not fitting — newer companies, companies unwilling to build Georgian substance, very small teams, no distribution plans — ICS is the wrong tool, and either standard Georgian LLC treatment, Virtual Zone status (for software-creation IT companies in earlier operating years), or operations in alternative jurisdictions are the correct answers.

Practical considerations#

Three operational realities for a foreign company considering ICS for IT or maritime/logistics staffing.

Substance is enforced. The Decree's substance requirements are not perfunctory. The Revenue Service evaluates Georgian operating reality during application and on subsequent compliance review. A Georgian entity with no real operations, nominal staff, and all work performed abroad faces rejection or status revocation. Plan the operational footprint as part of the structuring decision — Georgian office space, Georgian-based hires, operational reality consistent with the activity description — not as an afterthought.

Activity scope tracks the Decree's specific enumeration. ICS is not "any IT activity" or "any logistics activity" — Decree N619's qualifying activities are specifically enumerated. Verify that the company's specific operational activities fall within the enumeration before structuring around ICS. Activities that fall outside the enumeration may still benefit from Virtual Zone status (for software creation specifically) or standard Georgian LLC treatment with the broader framework's advantages, but cannot use ICS.

Coordination with home-jurisdiction tax framework. The ICS framework optimizes the Georgian-side tax position; the foreign parent company remains subject to home-jurisdiction tax rules on the consolidated operation. Permanent establishment risk, transfer pricing requirements, controlled foreign company rules, and other home-jurisdiction provisions apply alongside the Georgian framework. Coordinated structuring with home-jurisdiction tax advisors at the design stage produces materially better outcomes than treating the Georgian side in isolation.

Talent availability and operational reality. Georgia has a growing IT engineering workforce, particularly in Tbilisi, with mature universities producing qualified graduates and an established ecosystem of IT companies. Maritime and logistics talent is more concentrated in coastal cities (Batumi, Poti) and tied to the operational infrastructure of Georgian ports and shipping. The talent pool depth and specific skill availability vary; building a substantial Georgian team typically involves a combination of local hires, regional hires, and international hires depending on the role and seniority required.

For a foreign company in IT or Maritime/logistics with established operations and willingness to build genuine Georgian operating capacity, ICS is among the most structurally attractive staffing-base frameworks available within the regional competitive set. The combined payroll and corporate-level advantages produce material operating cost reduction; the application framework is professional and the framework has been operationally stable since its 2020 introduction. For most foreign companies meeting the qualifying conditions, the structural argument produces meaningful savings that compound over multi-year operations.

Read more about International Company LLC formation on the Company Setup pillar.

See LLC formation service details.

See Virtual Zone LLC service details for software-creation IT alternatives.

Have a specific question about your case? Send us a message.