If you're looking to establish a business where you're the sole proprietor, registering as an Individual Entrepreneur, with Small Business Status in Georgia can bring significant tax advantages.
The Small Business Status (SBS) is a tailored tax program designed for Individual Entrepreneurs (IEs) in Georgia. It allows eligible IEs to apply for the SBS, enabling them to pay a reduced 1% tax on turnover up to a maximum annual turnover of 500,000 GEL. This often translates into substantial tax savings, particularly beneficial for freelancers and solopreneurs.
Legal Vista offers comprehensive support for both Individual Entrepreneur (IE) registration and Small Business Status (SBS) application (for qualifying individuals). Our services ensure a swift and professional setup, guiding you through potential translation challenges and legal intricacies in Georgian law, guaranteeing a hassle-free registration process without future legal complications.
Advantages of Georgian "Small Business Status" (SBS)
- Low Tax Rate: Enjoy a flat 1% tax rate on gross turnover, eliminating the need for additional personal or corporate income taxes. For Individual Entrepreneurs (IEs) without SBS status, a 20% tax on net profit applies.
- VAT Exemptions: Benefit from a 0% VAT rate on most foreign services, particularly advantageous for B2B services with clients outside Georgia. B2C services delivered electronically also qualify for VAT exemption.*
- Residency Flexibility: Legal residency in Georgia is not mandatory for SBS eligibility. However, becoming a tax resident is a prerequisite.
*Always confirm VAT treatment for your specific business model; exemptions may vary.
Which Business Activities are Ineligible for Small Business Status?
As per Government Resolution №415 of Georgia, the following activities are ineligible for Small Business Status:
- Activities requiring specific licensing or permits
- Currency exchange operations
- Medical, architectural, legal, notarial, auditing, consulting (including tax consulting) activities
- Gambling businesses
- Staffing activities (potentially including HR/recruitment, as per our interpretation due to legislative vagueness)
- Engagement in activities demanding significant investments or producing excisable goods
Income from employment or similar activities will be taxed at the standard 20% rate and is not part of the 1% taxable income for small businesses.
What is Included in the Package:
- Business registration at the business registry
- Registration with the tax authorities
- Legal fees
- Legal address for 1 year
PACKAGE FEE - EUR 699
ENQUIREGET IN TOUCH
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