0% dividend withholding for IT companies.

What you get#

A Georgian International Company (IC) pays 5% corporate income tax when it distributes profit, 0% withholding tax on the dividend that reaches shareholders, and 5% personal income tax on the salaries of qualifying employees. Profit the company keeps and reinvests is not taxed while it stays in the business. For qualifying IT and maritime businesses, International Company status offers attractive tax advantages. Happy Georgia helps determine whether the regime fits your operations and handles the application.

The structure has four other clean properties:

0% dividend withholding to shareholders. Once the company has paid its 5% profit tax on a distribution, the dividend reaches shareholders with nothing further withheld in Georgia. What happens in your country of residence depends on your home country's rules and the relevant double-tax treaty, where one applies.

5% personal income tax on qualifying employee salaries. Georgia's standard personal income tax rate doesn't apply to International Company employees in qualifying roles. For a small IT team, the saving on payroll tax alone often exceeds the corporate tax saving.

Georgian costs reduce the taxable distribution. When the company incurs certain costs in Georgia — salaries of employees who are Georgian citizens resident in Georgia, and research, design and development services in its permitted field — it can reduce the distributed profit that the 5% applies to by those costs, under the Ministry of Finance procedure.

No physical zone, no special location requirement. International Company status is applied to a Georgian LLC. The company can be based anywhere in Georgia.

The combined effect: profit the company keeps is not taxed while it stays in the business. When profit is paid out, 5% of it goes to Georgian profit tax — for every €100 of profit used for a dividend, €5 of profit tax and a €95 dividend, with nothing withheld (before any reduction for Georgian costs) — and qualifying employees' salaries are taxed at 5%.

If you become Georgian tax-resident yourself — through the 183-day rule or the HNW programme — the picture gets cleaner still. The 5% corporate tax is the only Georgian tax on distributed profits — Georgia claims nothing further on the dividend — and, if no other country still taxes you as a resident or citizen, the whole tax on that profit.

What we do#

We handle the full setup end-to-end, remotely. We prepare your Power of Attorney and arrange its notarisation — usually an online notary session, or a notary in your country where needed — together with the apostille and courier to Georgia. You send us a passport scan plus the company documentation that supports your eligibility application. We register your Georgian LLC with the National Agency of Public Registry, prepare the International Company status application with the Ministry of Finance, set up your Georgian legal address, and handle the bank account file.

If a new LLC is needed, registering it takes one working day once we file. The International Company status application then runs separately: the Revenue Service checks it within 10 days, and the file goes through the Ministry of Finance to the Government, which grants the status by decree. That final decision has no fixed deadline, so we give you a realistic estimate once we have reviewed your file. Once granted, the status counts from the beginning of the month in which the Government grants it (Government Ordinance No. 619, Annex 1, Art. 2(12)).

We also coordinate the substance and IT-experience documentation that Ministry of Finance review requires — that work happens in parallel with the LLC formation and is the most time-sensitive part of the setup.

What's included#

• Eligibility check — we confirm your activity and experience qualify for International Company status before recommending the structure
• LLC formation with the National Agency of Public Registry
• Bilingual charter and all founding documents
• Notarisation coordination and remote PoA support
• International Company status application with the Ministry of Finance
• IT-experience documentation package (translated and certified as required)
• Document coordination through the Ministry review, including responses to requests for additional information
• Georgian legal address for your registration
• Bank account file preparation and onboarding support
• A briefing on what to file, when, and how to stay compliant — including the substance maintenance requirements

What you'll need to qualify#

Three things. We confirm all three before recommending the structure.

Your activity is in IT. International Company status applies to information technology operations. Software development, IT services, platform engineering, SaaS operations, IT consulting where the deliverable is technical work — all qualify. Activity outside IT (general consulting, marketing, eCommerce, financial services) doesn't fit the regime. The Maritime sector also qualifies under the same status.

You or your company bring at least two years of relevant experience. The two years relate to activity in the qualifying IT or maritime sector, not to the age of the Georgian company, and the requirement can be met in more than one way — so a newly formed Georgian LLC may qualify. We assess your activity and experience against the requirements, set up the company and coordinate the application. Each application is reviewed by the authorities; contact Happy Georgia for a free consultation to check your eligibility. If you don't meet it yet, Virtual Zone LLC — 0% corporate tax on qualifying IT income — has no experience requirement, so a new company can apply straight away.

Your operation has substance in Georgia. International Company status comes with substance requirements — Ministry of Finance review looks at real activity, real employment, and real Georgian footprint. We work through the substance package in the consultation: which staff configurations satisfy review, how operating history documentation should be assembled, how to position the application for clean approval.

We work through all three in the consultation and recommend the structure that actually fits your situation.

How distributions are taxed#

A distribution is the point at which International Company profit is taxed. The company pays 5% profit tax, calculated on the distribution divided by 0.95, so 5% of the profit paid out goes to tax and the rest reaches shareholders as the dividend. The dividend itself carries no Georgian withholding and isn't taxed again as the recipient's income. Profit retained in the business isn't taxed while it stays there. The same 5% also applies to outflows the Tax Code treats like distributions: transactions with related parties at non-market prices, costs unrelated to the business, gifts of goods, services or money, and representation costs above the statutory limit.

What happens in your country of residence depends on your residency status there, your home country's rules, and the specific double-tax treaty. Because the 5% is paid by the company rather than withheld from your dividend, there is no Georgian withholding for your home country to relieve. Whether it gives any relief for the company-level tax depends on the treaty and its domestic rules — some treaties allow that only to corporate shareholders above a holding threshold. We settle the specifics in the consultation alongside the structure recommendation.

If you become Georgian tax-resident, the calculation simplifies further. The 5% corporate tax is the entire tax on distributed company profits — no further dividend tax claimed by Georgia, and depending on your prior residency exit rules, no other country in scope either.

When International Company is the right structure#

International Company fits readers who:

• Bring at least two years of relevant IT or maritime experience — we confirm how it can be met for your company
• Have or can establish substance in Georgia (real activity, real Georgian-based team, real footprint)
• Want the 0% dividend withholding outcome on distributions
• Are running a real company at scale, not solo contracting

If you're a solo developer or IT contractor without team and operating history, IE with Small Business Status at 1% on turnover up to 500,000 GEL/year is the better fit — simpler to set up, with 1% tax on eligible turnover.

If your company doesn't yet meet the experience requirement, Virtual Zone LLC at 0% corporate tax is the better fit — VZ has no experience requirement, so a new company can apply straight away, and it uses the same Georgian-LLC base. The trade-off compared to International Company:

• VZ: 0% corporate tax on profit from qualifying IT supplied outside Georgia, 5% dividend withholding, open to new companies (status application required), requires genuine software development in Georgia
• IC: 5% corporate tax when profit is distributed, 0% dividend withholding, 5% personal income tax for qualifying employees, requires relevant experience in the qualifying activity and substantial Georgian substance

Neither structure taxes profit that stays in the business. On qualifying profit paid out to an individual shareholder, the Georgian tax is 5% either way — withheld from the dividend under VZ, paid by the company under IC. The real differences sit elsewhere: IC's 5% salary tax and its reduction for Georgian salary and R&D costs, VZ's narrower exemption, treaty relief that can lower VZ's withholding for some shareholders, and how your home country treats each. We map the comparison to your actual situation in the consultation.

See Compare structures for the full picture across the four featured routes, plus ordinary LLC formation.

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.

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, no tourist tax. The same rate for foreign and Georgian clients. We quote in EUR, we honor the quote, no surprises later.

Frequently asked questions#

Can I run an International Company while living outside Georgia?#

Yes. The director and shareholders can live anywhere. Substance requirements are about the company's operational footprint in Georgia, not about your personal location. Most foreign founders manage the company remotely and visit Georgia occasionally — once for the setup, then as needed.

How long does the full setup take?#

If a new LLC is needed, registering it takes one working day once we file. The Revenue Service checks the International Company application within 10 days; the status is then granted by Government decision, which has no fixed deadline. Preparing the IT-experience and substance file is usually the longest part on our side. Your engagement letter sets out the timeline for your setup. We don't recommend structuring client contracts around International Company tax treatment until the certificate is in hand.

What counts as relevant experience?#

Substantive activity in the qualifying IT or maritime sector, demonstrable through contracts, invoices, financial statements, or other evidence the authorities accept. The requirement can be met in more than one way, in some cases through an existing company abroad, so a newly formed Georgian LLC may qualify. We review your documentation in the free consultation.

How does International Company compare to Virtual Zone?#

Both reduce tax on qualifying IT profit, structured differently. VZ is 0% corporate tax on profit from qualifying IT supplied outside Georgia + 5% dividend withholding + genuine development in Georgia, open to new companies. IC is 5% corporate tax when profit is distributed + 0% dividend withholding + 5% personal income tax for qualifying employees, requiring relevant experience in the qualifying activity and substantial Georgian substance. Neither taxes reinvested profit, and on qualifying profit paid out the Georgian tax is 5% under both — it simply sits at a different level. The choice usually turns on payroll, eligibility and your home country's treatment rather than on reinvesting versus distributing. We compare both paths in the consultation alongside your actual numbers.

What about the 5% personal income tax for employees?#

International Company status reduces the personal income tax rate on the salaries of qualifying employees. The qualifying-employee definition has criteria around the employee's role and the company's substance — not every employee on payroll automatically qualifies. We brief you on the configuration that maximises the saving, including how to structure the employment relationships to fit the criteria.

What about my home-country tax on IC profits?#

Your IC pays 5% profit tax in Georgia when it distributes profit. The 0% dividend withholding means the dividend then reaches you without further Georgian tax. What you owe in your country of residence depends on that country's rules and its tax treaty with Georgia, where one applies. We discuss this in your consultation.

Can International Company status be revoked?#

Yes, if the company's activity changes materially or stops meeting qualifying criteria — substance erosion, activity drift outside IT, failure to maintain the operating standards. We brief you on the documentation discipline that keeps the status clean over time.

Does International Company help with Georgian residency?#

It can. An active International Company supports 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. See Residency.

What's the substance requirement in practical terms?#

Real activity in Georgia: typically a Georgian-based team, a Georgian office or shared workspace footprint, contracts and invoices that reflect real operations from Georgia. Ministry of Finance review looks at substance holistically — there's no checkbox formula, but there's a clear floor below which approval doesn't happen. We work through your actual situation against that floor in the consultation.

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Ready to set up?#

We assess whether International Company fits your situation in a free consultation, confirm the eligibility criteria including the two-year IT experience and substance, and quote a fixed price. If something else fits better — IE with Small Business Status for solo work, Virtual Zone LLC for software companies without the qualifying experience yet, Free Industrial Zone for physical-goods operations — we tell you.