Which Georgian structure fits you.

The four structures we set up#

Happy Georgia sets up four Georgian company structures for foreign clients. Each fits a specific reader. The right one depends on how you work, what you sell, who your clients are, and how you take money out.

Individual Entrepreneur with Small Business Status. The simplest structure Georgia offers. 1% turnover tax up to 500,000 GEL annually, for solo professionals billing foreign clients. No employees, no shareholders, no audit. Read more →

Virtual Zone LLC. A Georgian LLC with Virtual Zone tax status, designed for software companies serving foreign clients. 0% corporate income tax on qualifying IT income, 5% withholding when profits distribute. No experience requirement, so new companies can apply. Read more →

International Company. A Georgian LLC granted International Company status by the Ministry of Finance. 5% corporate tax when profit is distributed, 0% dividend withholding, 5% personal income tax for qualifying employees. For established IT or maritime operations with the required experience and Georgian substance. Read more →

Free Industrial Zone. A Georgian company operating inside one of Georgia's four Free Industrial Zones (Tbilisi, Kutaisi, Poti, Hualing). 0% corporate tax, 0% VAT, 0% import duties, 0% property tax inside the zone. For physical-goods operations. Read more →

Note on Georgian LLCs more broadly: a Georgian LLC without special status pays 15% profit tax when it distributes profit (calculated on the grossed-up distribution), and dividends paid to individuals or foreign companies carry 5% withholding; profit kept and used in the business isn't taxed while it stays there, though some payments, investments and loans are taxed as if distributed. It isn't one of the four featured routes above, but we form ordinary LLCs as a standalone service where they fit — an operating or holding company that doesn't need a special status, or a company that will apply for one later. See Ordinary LLC formation.

How to pick#

The right structure usually picks itself once you map your actual situation against the table above.

If you work alone, billing your own clients: IE with Small Business Status. Small Business Status taxes eligible turnover at 1%, the setup is the simplest, and there's no qualifying period. Most foreign freelancers, IT contractors, designers, consultants, writers, and translators we set up land here. The eligibility check confirms your activity qualifies and your situation doesn't look like disguised employment, then we proceed.

If you run a software company with foreign clients and a small team (or plan to build one): Virtual Zone LLC — an attractive tax structure for qualifying IT companies, with 0% corporate tax on eligible software profits. It has no experience requirement, so a new company can apply straight away, and Happy Georgia handles the company setup and Virtual Zone application. The development needs to take place in Georgia — through a local hire, your own work in Georgia or a planned hire — and we work out the right arrangement with you in the consultation.

If your company brings at least two years of relevant IT or maritime experience and you have or plan a team on Georgian payroll: International Company — a newly formed LLC may qualify. The 5% personal income tax for qualifying employees is real money on a small team's payroll, and Georgian salary and R&D costs can reduce the profit that the 5% distribution tax applies to. On distributions alone the two are close: 5% profit tax with 0% withholding here, against 0% profit tax with 5% withholding under Virtual Zone. Substance requirements are heavier than Virtual Zone — Ministry of Finance review looks at real activity, real Georgian footprint — but for a qualifying IT company with a Georgian team, the International Company regime can offer especially attractive tax advantages. Happy Georgia assesses eligibility and handles the company setup and status application.

If you run a physical-goods operation (manufacturing, warehousing, processing, logistics): Free Industrial Zone. The 0% rate across corporate tax, VAT, import duties, and property tax inside the zone offers a compelling combination of tax and customs advantages for qualifying physical-goods businesses, with Happy Georgia assisting throughout the setup. The four Georgian zones (Tbilisi, Kutaisi, Poti, Hualing) each fit different operational profiles — we map the right zone to your activity in the consultation.

If your situation doesn't map cleanly to any of these, that's exactly what the consultation is for. Sometimes the right answer is a different jurisdiction; we say so when that's the case.

Switching between structures#

The structures aren't mutually exclusive over time. Most foreign clients we set up start with one and move when their operation outgrows it.

Solo professional → software company. Common path. Start as IE with Small Business Status. Build the operation. When you have a team and product income that crosses into "this is a real software company" territory, convert to Virtual Zone LLC. We coordinate the transition — closing the IE, forming the LLC, applying for VZ status, transferring banking — without operational interruption.

New software company → International Company. If you or a co-founder already bring relevant experience, a new LLC may apply for International Company status from the start — we check this in a free consultation. Otherwise, start as a Virtual Zone LLC where it qualifies, and apply for IC status once the experience is there and its 5% salary tax is worth more to your team than what Virtual Zone offers. The same Georgian LLC carries forward; only the tax status on top changes.

IE crossing the 500,000 GEL ceiling. Solo professionals approaching the SBS ceiling can plan the move to an LLC well before the threshold becomes forced. We watch for this in our existing clients and recommend the move at the right time.

Why Happy Georgia#

Independent advisory. No tied banks, no referral fees, no hidden product placement. We recommend what fits your situation, not what pays us a kickback. If a different jurisdiction fits better than Georgia, we say so.

Foreign clients only. Our entire practice is foreigners setting up in Georgia. Every engagement starts from your own situation: where you live and pay tax, who your clients are, and what you plan to do in Georgia.

Fixed pricing. We quote in EUR, we honor the quote, no surprises later.

Frequently asked questions#

What if I'm not sure which fits?#

That's what the free consultation is for. Most situations resolve into one clear recommendation after 30 minutes of conversation about how you work, what you sell, who your clients are, where you live, and what you want from the structure. If two structures could work, we explain the trade-offs and let you decide.

Can I have more than one structure?#

Yes, in some configurations. A foreign founder might have an IE for personal solo consulting income and own a Virtual Zone LLC for product income, depending on how the activities are separated. We work through whether multi-structure makes sense for your situation in the consultation.

What if my activity doesn't fit IT, software, or physical goods?#

Some activities don't map cleanly to any of the four structures. Financial services, regulated professional services (legal, medical), real estate development, and a few other categories have separate Georgian regulatory treatment. We'll tell you honestly if your activity falls outside what we set up — sometimes the answer is a different jurisdiction.

How long until I can invoice?#

As soon as the IE or company is registered, and registration takes one working day once we file. What differs is when the special tax treatment starts. IE: Small Business Status, once granted, applies from the day we file for it. Virtual Zone LLC: the law sets a 10-working-day period for the VZ decision (you can invoice during this period under the underlying Georgian LLC, but the 0% rate doesn't apply until VZ approval). International Company: the Revenue Service checks the application within 10 days, then the status is granted by Government decision with no fixed deadline. Free Industrial Zone: zone-resident timing depends on the zone. Your engagement letter sets out the timeline for your structure.

What if I cross a threshold or my situation changes?#

Built into how we work. Crossing the IE 500,000 GEL ceiling, distributing more than expected from a VZ LLC, growing past the substance threshold for IC — these are situations we plan for in advance for ongoing clients. The structures aren't traps; they're starting points that can evolve.

Does my structure choice affect Georgian residency?#

It can. An active Georgian company supports several residency permit applications. On the work-permit side, directors of Category I, II or III companies are exempt under Article 1(4)(l) of the Law on Labour Migration; directors of smaller companies need another ground or the right to work. We coordinate company setup with residency planning when both are in scope. See Residency.

What about tax in my country of residence?#

Your Georgian structure pays Georgian tax on Georgian-side income (the 1%, the 0%, the 5% per the table above). What you owe in your country of residence depends on your residency status there, your home country's rules, and Georgia's tax treaty with that country. We discuss your specific situation in the consultation.

Ready to set up?#

A free consultation tells us which of the four structures fits your situation. If something else fits better — a different jurisdiction, a configuration we don't normally recommend — we tell you. No surprises later.