0% corporate tax for software companies.

What you get#

A Georgian Virtual Zone LLC pays 0% corporate income tax on qualifying IT income earned from foreign clients. When profits are distributed to shareholders, a 5% withholding tax applies — and that 5% can often be deducted from the dividend tax you owe in your country of residence under one of Georgia's nearly 50 double-tax treaties. The treaty network covers most of the EU, the UK, the UAE, Israel, India, China, and Japan.

The structure has three other clean properties:

0% VAT on services exported outside Georgia. Qualifying foreign-client income is zero-rated regardless of turnover. The 100,000 GEL VAT threshold applies to Georgian-domestic supplies only.

No physical zone, no office requirement built into the status. Despite the name, "Virtual Zone" is a tax status applied to a Georgian LLC — there's no designated geographical zone you operate from. The company can be based anywhere in Georgia.

Estonian-style distribution mechanic. Tax is triggered when profits are distributed to shareholders, not on retained earnings. A VZ company that reinvests its profits into the business pays no corporate tax at all until distribution.

The combined effect: a software company earning revenue from foreign clients pays no corporate tax in Georgia until profits are distributed. At distribution, 5% Georgian withholding applies — and in your country of residence, the 5% can usually be deducted from your home-country dividend tax under the applicable DTT, depending on your home country's rules.

If you become Georgian tax-resident yourself — through the 183-day rule or the HNW programme — the picture gets cleaner still. The corporate side stays at 0%, the 5% withholding still applies at distribution, and Georgia adds no personal income tax on the dividend on top. 5% becomes your entire tax bill across both corporate and personal layers, with no home-country dividend tax in scope.

What we do#

We handle the full setup end-to-end, remotely. You sign a Power of Attorney at a notary in your country and send us a passport scan. We register your Georgian LLC with the National Agency of Public Registry, prepare the Virtual Zone status application with the Ministry of Economy, set up your Georgian legal address, and handle the bank account file.

LLC formation is 3–5 business days. The VZ status application then runs separately through the Ministry of Economy's online portal. Approval typically lands within 6–12 weeks. Once approved, the 0% rate applies to qualifying income from that point forward.

The Georgian-resident developer requirement (covered below) can be handled before or after the LLC is registered. If you're hiring, we can submit the application with the intended developer's CV; the actual hire happens before VZ-qualifying activity starts. If you're becoming Georgian resident yourself and serving as the qualifying developer, we coordinate that path with the residency setup.

What's included#

• Eligibility check — we confirm your activity qualifies and the developer requirement is achievable 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
• Virtual Zone status application with the Ministry of Economy
• Document coordination through the commission review, including responses to any 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 income-separation rules for any Georgian-domestic revenue

What you'll need to qualify#

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

Your activity creates software products. Virtual Zone is designed for companies that create or substantially develop software — not for IT consulting, digital marketing, eCommerce, or general digital services. Custom software development, SaaS products, platform engineering, IT engineering services where the deliverable is code or a software system — all qualify cleanly. The cleaner and more specific your activity description and supporting evidence (code repositories, product documentation, contracts naming software deliverables), the stronger the application.

Your clients are mostly outside Georgia. The 0% rate applies to qualifying income from non-Georgian clients only. Mixed income — some foreign, some Georgian — is permissible but requires clean accounting separation. Georgian-source revenue is taxed at standard rates (15% CIT on distribution, 18% VAT above the 100,000 GEL threshold). For most foreign-founded VZ companies, the entire client base is outside Georgia and the separation question never arises.

At least one Georgian-resident developer. Since 2022, the Revenue Service expects qualifying VZ companies to have at least one Georgian-resident IT developer with skills relevant to the software activity. Three paths satisfy this:

• You hire a local Georgian developer. Tbilisi has a deep talent pool of software engineers; qualified IT engineering costs in Georgia are roughly 30–50% of Western European equivalents.
• You become Georgian tax-resident yourself. If you're the founder/director and you have the relevant IT skills, you can be the qualifying developer. This pairs naturally with Georgian tax residency or the HNW programme.
• You apply with the intended developer's CV. VZ status can be granted before the hire is finalised, on the basis of submitting the intended developer's CV with the application. The actual hire then happens before VZ-qualifying activity begins.

We work through all three options in the consultation and recommend the path that fits your situation.

How distributions are taxed#

The 5% Georgian withholding on dividends is the only Georgian-side tax that qualifying VZ income pays before reaching you. What happens in your country of residence depends on your residency status there, your home country's rules, and the specific double-tax treaty.

Under most of Georgia's nearly 50 DTTs, the 5% Georgian withholding can be deducted from the dividend tax owed at home — reducing your home-country tax liability rather than stacking on top of it. Some DTTs grant exemption rather than deduction. The exact treatment depends on the treaty and your home country's domestic rules; we settle the specifics in the consultation alongside the structure recommendation.

If you become Georgian tax-resident, the calculation simplifies. The 5% Georgian withholding becomes the entire tax on the distribution — no further dividend tax claimed by Georgia, and depending on your prior residency exit rules, no other country in scope either. For founders building toward Georgia as their primary base, 5% across both corporate and personal layers is the realistic end-state.

When VZ LLC is the right structure#

Virtual Zone LLC fits readers who:

• Build software products, SaaS, or technical platforms
• Sell mostly to clients outside Georgia
• Have or can establish at least one Georgian-resident developer (including yourself, if you're moving to Georgia)
• Are running a real company, not solo contracting

If you're a solo developer working alone and billing your own clients, IE with Small Business Status at 1% on turnover up to 500,000 GEL per year is usually the better fit — simpler to set up, simpler to maintain, and the 1% rate is the lowest tax Georgia offers. The Virtual Zone path makes sense once the operation has the substance of a software company: a team (even a small one), product development, contracts that describe software deliverables.

For IT operations with 2+ years of sector operating history, International Company status is the third option — 5% corporate tax with 0% dividend withholding. More restrictive than VZ but stronger on the dividend side. See International Company for the comparison.

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. We understand the tax-treaty questions a Berlin software founder asks, the source-of-funds documentation a Tel Aviv SaaS team needs, the home-country reporting a Singapore IT consultancy has to keep clean.

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

Trusted by clients across Western Europe, Israel, the UK, Singapore, and beyond.

Frequently asked questions#

Can I run a VZ LLC while living outside Georgia?#

Yes. The director and shareholders can live anywhere. The Georgian-resident developer requirement is about the company's operational substance, 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?#

LLC formation is 3–5 business days. The VZ status application takes 6–12 weeks at the Ministry of Economy. Total from start to confirmed VZ status: typically 10–16 weeks. We don't recommend structuring client contracts around VZ tax treatment until the certificate is in hand.

Can I get VZ status before hiring the developer?#

Yes. The application can be submitted with the intended developer's CV, and VZ status can be granted on that basis. The hire then happens before any VZ-qualifying activity is invoiced. We coordinate the timing.

What if I'm the developer myself?#

If you have the relevant IT skills and become Georgian tax-resident, you can be the qualifying developer. This is a clean path for solo founders moving to Georgia — the structure becomes self-staffed. We handle the residency side alongside the company setup. See Tax Residency and the HNW programme.

What about Georgian-domestic clients?#

Standard rates apply: 15% CIT on distribution and 18% VAT once the 100,000 GEL threshold is crossed. Georgian-source income must be tracked separately from foreign-source VZ-qualifying income — mixed-revenue companies need clean accounting separation. For foreign-founded VZ companies whose entire client base is outside Georgia, this is rarely an operational concern.

Can VZ status be revoked?#

Yes, if the company's activity changes materially or stops meeting the qualification criteria. The most common cause is activity drift — a company that registered as a software developer gradually taking on consulting or marketing work where the deliverable is no longer software. We brief you on the documentation discipline that keeps the status clean over time.

How does VZ compare to International Company status?#

Both reduce tax on qualifying IT income, structured differently. VZ is 0% corporate tax + 5% dividend withholding, with the Georgian-resident developer requirement. IC is 5% corporate tax + 0% dividend withholding + 5% personal income tax for qualifying employees, requiring 2+ years of IT-sector operating history at application. The comparison depends on your distribution model, your operating history, and your team setup. We compare both paths in the consultation. See International Company.

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

Your VZ company pays 0% in Georgia on qualifying foreign-client income. The 5% Georgian withholding applies when profits distribute to shareholders. What you owe in your country of residence depends on that country's rules and its tax treaty with Georgia (nearly 50 DTTs in force). The 5% Georgian withholding can typically be deducted from your home-country dividend tax under the relevant DTT, but the exact treatment varies by treaty and by domestic rules. We discuss this in your consultation.

Does VZ help with Georgian residency?#

It can. An active VZ LLC supports residency permit applications. Foreign founders and directors of Georgian LLCs are categorically exempt from the 2026 work-permit rules under Law №1509 of April 2026. See Residency & Permit.

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Ready to set up?#

We assess whether VZ fits your situation in a free consultation, confirm the eligibility criteria, plan the developer-requirement path, and quote a fixed price. No surprises later.