Key Facts to Know (2026):

• Small Business Status (SBS) tax rate: 1% on turnover up to GEL 500K (~USD $185K)

• Above GEL 500K: 3% on turnover

• If exceeds GEL 500K for 2 consecutive years: SBS revoked; standard rates apply

• Standard personal income tax: 20% flat

• Corporate tax: 15% (or 0% on retained earnings — Estonian-style)

• VAT threshold: GEL 100K

• Physical presence for tax residency: 183 days

• Georgian bank account requirement: yes for Georgian source income

• Currency: Georgian Lari (GEL); ~2.7 to USD (so USD$1,000 = ~GEL$2,700)

How It Works

Register as an Individual Entrepreneur (IE) in Georgia. Apply for Small Business Status (SBS) — the 1% regime. Register with tax authority. Get bank account. Invoice clients from your IE (with GEL amount typically converted from USD).

Under SBS, your business turnover up to GEL 500K (~$185K USD) is taxed at 1%. That’s it.

Combined with Georgian tax residency (183+ days), you have a personal + business tax residency at very low effective rate.

Who Qualifies

Small Business Status is designed for individual freelancers and consultants. Certain activities are excluded:

• Financial services

• Professional services requiring licenses (some)

• Investment activities

• Consulting to Georgian clients (creates VAT + residency complexity)

For a foreign consultant/freelancer with international clients in a non-regulated profession (e.g. not a lawyer, doctor, etc.), SBS typically works.

Physical Presence Trade-Off

To be Georgian tax resident and benefit from Georgian rates, you need 183+ days in Georgia. This means Georgia becomes your actual base — not just a paper residency.

For nomads happy to base in Tbilisi (increasingly popular nomad city), this is fine. For nomads wanting true location independence, it’s a constraint.

Banking Reality

Georgian banks (TBC Bank, Bank of Georgia) are accessible for residents and Individual Entrepreneurs. Setup is relatively fast (days to weeks). Minimum balances low. Multi-currency accounts standard.

Georgian banking has strengthened significantly since 2020 and is generally considered stable and internationally-recognised.

The Traps

Exceeding GEL 500K. If your turnover exceeds the threshold, above-threshold is taxed at 3%. If you exceed for 2 consecutive years, SBS is revoked entirely and standard rates apply.

Not maintaining physical presence. If you don’t hit 183 days in Georgia, you’re not Georgian tax resident, and the SBS benefits don’t cleanly protect you from your other residence.

CFC issues from your home country. If you’re from a country with CFC rules, running income through a foreign structure requires care.

Assumed no reporting. Georgia isn’t a “hide your money” jurisdiction, it complies with automatic reporting under the OECD’s CRS and assists the US with FATCA participation. It participates in international information exchange and its banks report. You’re getting low tax legally, not invisibility.

Comparison

For nomads under ~$185K USD turnover:

Georgia SBS: 1% + full residency

UAE Free Zone: 0% but higher setup + presence costs

Panama: 0% on foreign source, relatively straight forward residency options, no minimum ‘in-country’ time requirement (i.e. don’t have to spend half the year there)

Cyprus: favorable but generally higher effective rates for this income bracket

Georgia often wins on simplicity + rate for the target income bracket.

Aside from tax, the big question that you have to address is ‘do I actually want to live in Georgia at least 6 months per year?’. Some people love Georgia, but it’s not for everyone. Some potential limitations include:

• the biggest city, Tblisi, only has 1.3million people, and there are no other major cities;

• Georgia has very limited racial diversity and a very small expat community compared to other nomad hubs, meaning if you’re black, Latino, or Asian you’ll be in a minority of <1% (Georgians are generally not known for overt racism, but you will physically stand out in daily life if you’re not Caucasian in appearance); and

• unlike Panama, Singapore, or the UAE, Georgia is not a major airline-hub, tourism, or trade destination meaning that flying to-and-from Georgia has limited fast/cheap/direct options.

So, if you are considering Georgia, we highly recommend spending a few months there to test the waters before committing to tax residency. When you are ready to plan tax residency, or for any clarifying questions before you go there, get in touch with us!