Common Questions from Foreigners and Businesses about Real Estate, Residence Permits, Business, Taxes and Inheritance in Georgia

In this article, JUST Advisors answers the most frequently asked questions from foreigners and businesses in Georgia: whether a foreigner may purchase real estate, how to obtain a residence permit, how to incorporate a company, what taxes a sole proprietor pays, and how to formalise employment relations, inheritance, marriage and dividends.

Yes. A foreigner may purchase an apartment, an aparthotel unit, a house, commercial premises or a non-agricultural land plot in Georgia.

The principal restriction concerns agricultural land. A foreigner may acquire title to agricultural land only by way of inheritance, including testamentary succession.

Real estate may be acquired in joint ownership (the number of co-owners and the manner in which their shares are allocated are not restricted); a minor may also hold title to real estate (in which case court approval will be required to sell it).

The subject of the purchase may be real estate or commercial premises in a new development (the primary market) or in an already completed building (the secondary market). Georgia has no separate legislation governing real estate investment or the acquisition of property at the construction stage - all real estate transactions are governed by the Civil Code.

Property may be acquired either in person or by power of attorney issued in the principal’s country of residence. Where necessary, such power of attorney must be apostilled in the country of issue or undergo consular legalisation. In Georgia, the power of attorney must be translated into Georgian and the translation notarially certified.

Form of the real estate purchase agreement:

• General rule: the agreement is executed in simple written form.
• If the agreement is concluded on the basis of a power of attorney issued abroad, it must be executed in notarial form.

In all cases, the real estate purchase agreement must be drawn up in Georgian and in a language understood by the parties to the transaction. A translation of the document from Georgian into a foreign language must be certified by a translator. If you conclude the agreement at the House of Justice, the translator may be any person fluent in the languages in which the agreement is drawn up. If the transaction is notarial, a certified translator is present at the transaction before the notary.
Title to the real estate arises upon its state registration in the Public Registry of Georgia.

Real estate may be acquired with a mortgage - Georgian banks provide mortgage loans to foreigners for the purchase of real estate on both the primary and secondary markets. In a number of cases this is possible even without a Georgian residence permit. In addition to a mortgage, when purchasing on the primary market, developers frequently offer in-house interest-free instalment plans.

Payment under a real estate purchase agreement may be made by bank transfer or in cash. To register the transaction, it is sufficient to have a duly executed agreement and to confirm the authority of the parties to the transaction.

Georgia levies a property tax (including on real estate). This tax is payable by all owners of Georgian real estate, including foreigners (regardless of the type of property, the presence or absence of a residence permit, and the fact of residence in Georgia), if the aggregate income of the owner’s household in the reporting year exceeds GEL 40,000 (approximately USD 15,000 at the time of writing).

If the property is purchased for investment, leasing or subsequent resale, the income tax on the sale, VAT and the possible ownership structure - an individual, a sole proprietor or a company - should be assessed in advance.

Real estate may serve as grounds for obtaining a residence permit.

The purchase of real estate does not in itself oblige a foreigner to obtain a residence permit in Georgia.

However, real estate may serve as grounds for obtaining a residence permit.

Short-term residence permit on the basis of real estate.
A short-term residence permit may be obtained by a foreigner who owns real estate in Georgia with a value exceeding the equivalent of USD 150,000 in GEL.

Agricultural land does not qualify as grounds for this purpose.

A short-term residence permit may be issued to:

• the owner of the real estate;
• the owner’s spouse;
• the owner’s children (including adult children).

The market value of the real estate is confirmed by a report of a certified appraiser.

A short-term residence permit is issued for one year and may be renewed for as long as title to the relevant property is retained. If title is terminated, the grounds for the residence permit also cease.

Investment residence permit
Real estate with a value exceeding the equivalent of USD 300,000 in GEL may serve as grounds for an investment residence permit.

An investment residence permit may be issued to a foreigner and to members of their family for a period of five years.

If an investment residence permit is obtained on the basis of real estate, title to that property must be retained throughout the term of the residence permit. If the property is sold, it must be replaced by another property of no lesser value before title to the first property is terminated.

An important practical advantage: an investment residence permit exempts a foreigner from the need to separately obtain the right to engage in employment / a work permit in order to work in Georgia.

A foreigner may conduct business in Georgia - by incorporating a company or registering as a sole proprietor. The citizenship of the founder or director is immaterial.

The principal forms of doing business are:

• sole proprietor;
• limited liability company - LLC;
• joint-stock company;
• general partnership;
• limited partnership;
• cooperative;
• branch of a foreign company.

In practice, a sole proprietorship or an LLC is most frequently chosen.
The standard registration period is one business day. Expedited registration is available on the day of application.

To register a company, the following are required:

• a memorandum of association and articles of association, signed by the founders (the Ministry of Justice of Georgia has approved standard articles of association which may be adopted where there is no need for bespoke regulation);
• the director’s consent to hold office - signed by the director;
• a registered office in Georgia;
• the personal confirmation of the owner of the premises that the address may be used as a registered office;
• a Georgian SIM card to which the company’s account on the Public Registry portal and the tax account will be linked;
• translations and notarial execution of documents, where foreigners or foreign companies are involved.

The sequence of steps is as follows:

• Choose the form of doing business.
• Prepare the documents: a memorandum of association and articles of association are required for registration. If there are no special requirements for the corporate documents, the standard documents approved by the Ministry of Justice of Georgia may be adopted.
• Determine the registered office. This may be any real estate property other than a land plot without a building. The owner of the address must provide consent to its use - the corresponding statement is signed by the owner upon registration at the House of Justice or in advance before a notary.
• Appoint a director - this may be a Georgian citizen or a foreigner. Several directors with the same or different scopes of authority are permitted. The appointment of a managing company is also possible. The director must consent to hold office - the corresponding statement is signed upon registration at the House of Justice or in advance before a notary.
• Have a Georgian SIM card to activate the company’s personal account on the Public Registry portal and with the Revenue Service.
• Apply for company registration at the House of Justice.

The following are appended to the registration application: the memorandum of association and articles of association, the consent of the owner of the registered office, the director’s consent, the passports of the founders and director, and proof of payment of the state fee.

The documents must be drawn up in Georgian and in a language understood by the signatories. A translation of the document from Georgian into a foreign language must be certified by a translator. If registration takes place at the House of Justice, the translator may be any person fluent in the languages in which the documents are drawn up. If you sign the documents before a notary, the notary provides a certified translator.

• After registration, obtain the login and password and activate the account on the Public Registry portal.
• Activate the tax account.
• Open a bank account.
• Where necessary, register in the foreign-trade register or in special registers for particular types of business.

A bank account in Georgia is not mandatory for everyone. For VAT payers, for instance, it is effectively necessary. In other cases, a business may operate in the established manner through payment systems or in cash, where this is permissible for the particular activity.

Important: registering a company is only the beginning. Thereafter, you must address the right to engage in employment for a foreign director, the formalisation of employees, contracts, accounting, tax returns, banking compliance, licences and permits.

A sole proprietor in Georgia pays income tax and may pay VAT. These are distinct taxes: VAT-payer status does not relieve the obligation to pay income tax.

Income tax:

General regime
As a general rule, a sole proprietor pays income tax at 20% on profit, that is, on the difference between income and documented expenses.

The tax return is filed by 1 April of the following year. The tax is likewise paid by 1 April. Under the general regime, sole proprietors are required to make advance income-tax payments during the year - quarterly. Their amount is calculated on the basis of the previous year’s tax.

Small business status
Small business status provides for a special income-tax rate (1% or 3%) for sole proprietors engaged in certain types of activity whose income does not exceed the established threshold.

Small business status is not suitable for everyone. It cannot be applied, for example, to consulting, legal, notarial or audit services, or to repair and finishing works performed for corporate / sole-proprietor clients, and to a number of other types of activity.

If income does not exceed GEL 500,000 over 12 months, the income-tax rate is 1%. If the threshold is exceeded, the rate becomes 3% from the month of the excess until the end of the calendar year. Exceeding the threshold for two consecutive years results in the cancellation of small business status and a transition to the general regime.

The small business return is filed monthly. The tax is likewise paid monthly - by the 15th day of the month following the reporting month.

Fixed tax
The fixed tax applies only to certain types of activity. The regime may be used by both a sole proprietor and a company, provided the activity is included in the established list and the taxpayer is not a VAT payer.

For example, in the beauty industry, the fixed tax is available for hairdressing services, make-up, eyelash extensions, eyebrow correction, epilation, depilation, cosmetology services, massage, manicure, pedicure and tanning.

Rates:

• beauty services - GEL 50 per month per workstation;
• manicure and pedicure - GEL 30 per month per workstation;
• tanning - GEL 70 per month per cabin.

For vehicle repair shops, the fixed tax applies to the maintenance and repair of vehicles. The rate is GEL 100 per month per workstation intended for servicing one vehicle. If the number of workstations cannot be determined, the tax is calculated as GEL 100 for every 40 sq. m of area.

Advantages of the regime: no tax returns need be filed for this activity, payment may be accepted in cash without a cash register, and the ordinary tax accounting of income and expenses for the calculation of this tax is not maintained.
Before applying the regime, you must verify whether the particular activity falls within the fixed-tax list.

VAT
In addition to income tax, a sole proprietor (including a small business sole proprietor) may become a VAT payer; the VAT rate in Georgia is 18%.

A sole proprietor is required to register as a VAT payer if their taxable turnover over any consecutive 12 months exceeds GEL 100,000. This is not a calendar year, but any continuous 12-month period.

An application for VAT registration must be filed no later than 2 business days from the moment the threshold is exceeded. VAT is charged from the transaction at which the threshold was exceeded.

The VAT return is filed monthly by the 15th day of the month following the reporting month. The tax amount is paid within the same time limits.

VAT-payer status may be relinquished if two conditions are simultaneously met: one year has elapsed since the most recent VAT registration, and turnover over the last 12 calendar months, excluding VAT, has not exceeded GEL 100,000.

Work may be performed under an employment contract or under a services agreement. However, the form of the contract must correspond to the actual relationship.

If the relationship is in fact one of employment, then even in the absence of a written employment contract the employment relationship is deemed to have arisen, and the employee is covered by the guarantees of the Labour Code of Georgia.

Indicia of an employment relationship:

• the employee performs the work personally;
• is subordinate to the employer;
• works to a schedule;
• receives regular remuneration;
• uses the employer’s resources;
• is integrated into the company’s working process;
• does not bear independent entrepreneurial risk.

Essential terms of the employment relationship:

• the position or type of work;
• the place of work;
• the start date of the work;
• the term of the contract, if it is fixed-term;
• working time and rest time (Georgia has established a 40-hour working week);
• the amount and procedure for paying wages (Georgia has not established a minimum wage for the commercial sector);
• the procedure for granting leave (the Labour Code provides for 24 working days of paid leave and 15 calendar days of unpaid leave);
• the grounds and procedure for terminating the contract.

Working on an informal, verbal basis is a risk for the employer. In the event of an inspection or dispute, questions may arise regarding wages, leave, overtime, dismissal, occupational safety and discrimination.

First and foremost: do not dismiss an employee by simply telling them not to come in tomorrow. That is a direct route to an inspection by the Labour Inspectorate and a court dispute.

An employee may be dismissed:

• at the employee’s initiative;
• at the employer’s initiative;
• by agreement of the parties.

Dismissal at the employee’s initiative
The employee submits a written application. By law, the employee must give the employer at least 30 calendar days’ notice.

The employer must:

• issue a dismissal order;
• acquaint the employee with the order;
• carry out the final settlement - pay all sums for time actually worked no later than 7 calendar days after the termination of the employment relationship, unless otherwise provided by the contract or by law.

Upon dismissal at the employee’s initiative, compensation for unused leave is, as a general rule, not paid, unless otherwise provided by the contract or the employer’s internal documents.

Dismissal at the employer’s initiative
An employer may dismiss an employee only where there are lawful grounds, which the Labour Code includes as follows:

• economic circumstances, technological or organisational changes;
• liquidation of the employer;
• redundancy;
• the employee’s unsuitability for the position held or the work performed;
• gross breach of employment duties;
• systematic breach of employment duties;
• prolonged incapacity for work (more than 40 consecutive days or 60 days within 6 months);
• other grounds provided for by the Labour Code.

In the case of dismissal for economic reasons, the employee’s unsuitability for the position or work, prolonged incapacity for work, or where there are other objective circumstances justifying the termination of the employment contract, the employer is obliged to choose one of two notice options:

• give the employee at least 30 calendar days’ written notice and pay compensation of no less than one month’s wages;

or

• give the employee at least 3 calendar days’ written notice and pay compensation of no less than two months’ wages.

In the case of dismissal for a gross breach or systematic breaches of employment duties, the notice and compensation under the model set out above do not apply, but the employer must have evidence of the breach. Without evidence, such a dismissal is easily challenged.

Upon dismissal, the employer must pay:

• wages for time actually worked;
• compensation, if it is due by law;
• compensation for unused leave, if the dismissal is at the employer’s initiative and the employee was unable to take paid leave for reasons attributable to the employer;
• other sums provided for by the employment contract or internal documents.

If the employee requests a written justification for the dismissal, the employer is obliged to provide it within 7 calendar days. If no justification is provided, the burden of proving the facts of the dispute falls on the employer in court.

Dismissal by agreement of the parties
This is the most civilised method of terminating an employment relationship. A written agreement must be signed, recording:

• the date of dismissal;
• the amount of the final settlement;
• compensation, if the parties have agreed on it;
• the procedure for handing over property and documents;
• the absence of mutual claims or the procedure for their settlement;
• confidentiality, where this is important.

Who may not be dismissed, or when dismissal is particularly risky
An employee may not be dismissed on discriminatory grounds or on grounds not provided for by the Labour Code.

Areas of particular risk:

• pregnant employees;
• employees on maternity, childbirth, childcare or adoption leave;
• employees on sick leave;
• employees following a complaint, conflict or referral to the inspectorate;
• employees in respect of whom there is a risk of indicia of discrimination.

In such cases, the grounds, procedure and evidence must be verified separately.

Inheritance in Georgia may be received by operation of law or by will.

Heirs at law
If there is no will, succession proceeds by order of priority.
The first-priority heirs are the spouse, the children and the parents of the deceased.
If there are no first-priority heirs, the heirs of subsequent priorities inherit.

Heirs by will
If there is a will, the property is distributed in accordance with the testator’s wishes.
However, even where there is a will, the compulsory share of certain heirs must be taken into account. This means that a will does not always make it possible to exclude close heirs from the inheritance entirely.

If the inheritance is opened in Georgia
The order of steps:

• Obtain the death certificate.
• Determine the composition of the estate.
• Verify whether there is a will.
• Apply to a notary in Georgia - file an application to accept the inheritance, confirming kinship or entitlement under the will.
• Submit the documents relating to the property.
• Obtain the certificate of the right to inheritance.
• Register the right in the Public Registry, if the inheritance includes real estate, a share in a company or other property subject to registration.

The period for accepting an inheritance is 6 months from the date the inheritance is opened. If the deadline is missed, the matter is usually resolved through the courts.

If the inheritance is opened in another country, but there is property in Georgia
If the probate matter is opened outside Georgia, but the estate includes Georgian real estate, a share in a Georgian company, a bank account or other property in Georgia, the procedure is usually as follows:

• Accept the inheritance in the country where the probate matter is opened.
• Obtain a document confirming the right to the inheritance: a certificate of the right to inheritance, a court judgment, a notarial act or another document provided for by the law of the relevant country.
• Apostille or legalise the document, if required.
• Translate the document into Georgian and have the translation notarially certified.
• Apply to a Georgian notary who, on the basis of the documents from the country where the inheritance was opened, will also open a probate matter and issue a certificate of inheritance.
• Register the right to the Georgian property in the Public Registry.

If the foreign document directly confirms the heir’s right to specific Georgian property, it may be used to register the right in Georgia following proper execution and translation.

If the foreign document does not permit the right to be registered directly in Georgia, does not identify the property, or there is a dispute among the heirs, it may be necessary to apply to a Georgian notary to open a probate matter in respect of the Georgian property, or to apply to the court.

Inheritance tax
The tax depends on the heir’s relationship to the deceased.

• First- and second-priority heirs are exempt from income tax irrespective of the value of the property received.
• Third- and fourth-priority heirs are exempt from tax up to GEL 150,000 within a tax year. Income tax may arise on the amount of the excess.
• If the property is received by a person who does not fall within a preferential category, the tax burden is 20%.

Yes, a will executed in another country may be applied in Georgia.

For such a will to be usable in Georgia, the following must be verified:

• the will, in form and content, complies with the law of the country where it was drawn up and with Georgian law;
• the document is apostilled or legalised, if required;
• a notarial translation into Georgian has been prepared;
• the content of the will makes it possible to identify the testator, the heirs and the property;
• the will does not contravene Georgian public policy.

Various forms of will may be applied in Georgia: notarial, holographic, sealed, as well as a will equated to a notarial one in special cases. However, for a foreign will, the safest option from a practical standpoint is written notarial form with an apostille or legalisation.

Important: the will must be sufficiently specific. The notary or the Public Registry must be able to identify who the testator is, who the heir is, and what property is being transferred.

Compulsory share
Even where there is a will, not all heirs can be entirely excluded from the inheritance.
The right to a compulsory share belongs to:

• the testator’s children;
• the testator’s parents;
• the testator’s spouse.

The size of the compulsory share is one half of the share that the heir would have received under intestate succession.

Example: if, under the law, the spouse and two children would each receive 1/3 of the inheritance, then the compulsory share of each of them will be 1/6.

Foreigners may register a marriage in Georgia. Citizenship, a residence permit or permanent residence in Georgia are not required for this.

What is required:

• the passports of both prospective spouses;
• notarial translations of the passports into Georgian;
• two witnesses (who must be of full age, but need not be Georgian citizens);
• an application for marriage registration;
• a document confirming the dissolution of a previous marriage, if one of the spouses was previously married.

If the documents are ready, a marriage may be registered quickly, including on the day of application.

Following registration, a Georgian marriage certificate is issued. For use abroad, it usually needs to be apostilled or legalised - depending on the country in which the document will be presented.

Yes, a business in Georgia may be registered remotely.

For this purpose, a notarial power of attorney is executed in favour of a representative in Georgia. If the power of attorney is issued abroad, where necessary it must be apostilled or legalised and, in any event, its translation into Georgian must be notarially certified in Georgia.

Remotely, you can:

• register a sole proprietorship;
• register an LLC;
• obtain a tax number;
• activate the tax account;
• register changes within the company.

There is, however, one important limitation: opening a bank account may require the personal presence of the director, founder or beneficiary.

Remote registration is therefore not suitable for everyone. If the business needs a Georgian bank account, it is better to verify banking compliance in advance and prepare the package of documents.

The package of documents depends on the type of residence permit. The general documents always include a notarial translation and a copy of the passport, an application, a photograph and proof of payment of the state fee.

A residence permit application must be filed no earlier than 90 and no later than 40 days before the expiry of the applicant’s lawful stay in Georgia (with the exception of the IT residence permit).

Note that the term of the residence permit and the term of visa-free stay are NOT cumulative and are NOT suspended. Look to the latest date of your lawful basis (visa / visa-free / residence permit).

Example: If you entered Georgia on 1 January and obtained a one-year residence permit on 1 March, then the term of visa-free stay (if you have not left the country) will expire on 1 January of the following year, while the term of lawful stay will end on 1 March of the following year (on the day the residence permit expires). If the residence permit is NOT renewed, then by 2 March you are already unlawfully present.

Standard processing times and fees for a residence permit application:

• 30 calendar days - GEL 300;
• 20 calendar days - GEL 450;
• 10 calendar days - GEL 600.

Additional documents for particular types of residence permit:

1. Employment residence permit

• an employment contract or a document evidencing sole-proprietor registration;
• a document confirming the right to engage in employment;
• a document confirming the applicant’s income (an employment contract with a salary of at least GEL 1,500 per month, or a bank statement confirming funds in the account of at least GEL 13,800);
• a statement of the turnover of the employer or sole proprietor confirming turnover of at least GEL 50,000 for each foreign employee (GEL 30,000 for authorised educational or medical institutions);
• a statement from the employer or sole proprietor as to the number of foreign employees.

2. Residence permit on the basis of real estate

• an extract from the Public Registry confirming title to the real estate;
• a certified appraiser’s report confirming a market value of the real estate of at least the equivalent of USD 150,000 in GEL. Agricultural land does not qualify.

3. Investment residence permit

• documents confirming an investment in a Georgian company of at least the equivalent of USD 300,000 in GEL, or documents for real estate with a value exceeding USD 300,000;
• an appraisal of the real estate, if the grounds are real estate;
• an audit report, if the grounds are an investment in a business;
• three recommendations from Georgian citizens who are directors of Georgian companies.

If the grounds are an investment in a business, during the term of the investment residence permit the turnover of the company into which the investment was made must be confirmed:

• at least USD 50,000 for the first year;
• at least USD 100,000 for the second year;
• at least USD 120,000 for the third, fourth and fifth years.

If the grounds are real estate, it must be retained in ownership throughout the term of the investment residence permit or replaced with a property of no lesser value.

4. Residence permit on the basis of family reunification
a document confirming kinship or marriage;

• the residence permit of the principal family member;
• a document confirming the applicant’s income (a bank statement confirming funds in the account of at least GEL 6,000).

5. Study residence permit

• a certificate from an authorised educational institution;
• a document confirming the applicant’s income (a bank statement confirming funds in the account of at least GEL 6,000).

6. Permanent residence permit
A permanent residence permit may be obtained by:

• the spouse of a Georgian citizen;
• a minor child of a Georgian citizen;
• a parent of a minor Georgian citizen;
• a foreigner who has resided in Georgia on the basis of a temporary residence permit for at least 10 years.

The package of documents depends on the grounds: documents on kinship, the citizenship of the family member, previous residence permits, residence, income, etc.

Important: under the latest migration changes and draft laws, the rules for spouses of Georgian citizens may be amended. Before filing documents, you must verify whether the previous model of the permanent residence permit still applies or whether a separate temporary residence permit for spouses of Georgian citizens has already been introduced.

7. IT residence permit
An IT residence permit may be issued to:

• a foreigner employed in Georgia in the IT sector who has the right to engage in employment;
• a sole proprietor with small business status carrying out IT activity under the established activity codes;
• a person who manages or represents an international IT company;
• family members of such a foreigner.

For an IT residence permit, the following must be confirmed:

• at least 2 years of employment or entrepreneurial experience in the IT sector;
• annual remuneration from IT activity of at least the equivalent of USD 25,000 in GEL;
• conformity of the activity with the established IT codes;
• the right to engage in employment, if it is required.

The IT residence permit is issued for the first time for 3 years.

An important condition: the holder of an IT residence permit must actually be present in Georgia for at least 183 days within any consecutive 12 months. Otherwise, the residence permit may be terminated.

If the matter is specifically the due diligence of real estate, the basic procedure is as follows.

1. Request a current extract from the Public Registry
The extract must be up to date. The information you see online or received from the seller in advance may be out of date.

2. Check for attachments, prohibitions and encumbrances
Using the extract, we check for a mortgage, pledge, attachment, prohibition on alienation, servitudes and other restrictions.
If there are encumbrances, we request the underlying documents from the Public Registry and analyse the risks.

3. Verify the owner
If the owner is a minor, court consent will be required for the transaction.
If there are several owners, it must be verified whether they all participate in the transaction in person or whether powers of attorney are required.
If the seller is acting through a representative, we check the power of attorney: its term, the scope of authority, its validity, and the right to sell the property and receive the funds.

4. Request the documents underlying the acquisition of the property
This is necessary in order to assess the risks of vindication and possible disputes over past transactions.

5. Verify the area and configuration
If there is any doubt as to the area, boundaries or layout, it is better to engage a cadastral engineer and compare the actual condition of the property with the registry data.
If there are discrepancies, they must be brought into conformity before the transaction.

6. Check for utility debts
Formally, utility debts do not always follow the property, but in practice they may create problems for the new owner.

7. Check the cultural heritage status
If the property is a cultural heritage monument or is located in a protected zone, special requirements for the repair, reconstruction and use of the property must be taken into account.

The most common mistakes:

• Registering a sole proprietorship or LLC without analysing the tax model.
• Using small business status for activity that does not qualify for it.
• Failing to monitor the VAT threshold of GEL 100,000 over 12 months.
• Working without contracts with clients and contractors.
• Hiring employees without employment contracts.
• Hiring foreigners without verifying the right to engage in employment.
• Receiving funds into an account without a clear economic basis.
• Failing to prepare for banking compliance.
• Failing to keep accounts systematically.
• Failing to file tax returns on time.
• Failing to check whether a licence, permit or registration in a special register is required.

Georgia is convenient for business, but it is not a jurisdiction without rules.

If the company has profit, it may be distributed among the partners as dividends by resolution of the partners. As a general rule, such a resolution requires a simple majority of votes.

When a resolution to distribute profit may not be adopted
Profit may not be distributed if:

• the company has no profit;
• the distribution would lead to insolvency;
• after the payment of dividends the company would be unable to perform its obligations;
• the articles of association, a partnership agreement, a loan agreement or another document contains restrictions on the payment of dividends.

For an LLC, the management body must prepare a proposal on the distribution of dividends and a solvency statement. The company must confirm that, within the calendar year following the distribution of dividends, it will be able to perform its obligations as they fall due in the ordinary course of business.

Taxes on dividends:

1. General rule
Ordinarily, the distribution of profit attracts:

• corporate profit tax - 15%;
• dividend tax - 5%.

Profit tax on distribution is calculated using a special formula that includes a "gross-up", so the effective tax burden on the amount paid to the partner may differ from a simple 15% calculation on the transferred amount.

A company with virtual zone entity status
For a virtual zone entity, the distribution as dividends of profit from the supply of an IT product outside Georgia attracts the following taxes:

• profit tax - 0%;
• dividend tax - 5%.

International company
A preferential regime applies to an international company:

• profit tax - 5%;
• withholding tax on dividends - 0%.

Innovative start-up
For an innovative start-up, the reliefs depend on the term of the status:

• profit tax, years 4–6 - 5%;
• profit tax, years 7–10 - 10%;
• dividend tax - 5%.

R&D services provider
Preferential rates apply to an R&D services provider:

• profit tax - 5%;
• dividend tax - 5%.

At present, businesses in Georgia should pay attention to several areas.

Migration matters
In migration regulation, several directions are currently of particular importance.

First - the changes relating to residence permits for spouses of Georgian citizens. Under the current model, the spouse of a Georgian citizen falls within the categories that may apply for a permanent residence permit. At the same time, recent legislative initiatives are aimed at more detailed regulation of such grounds and at combating sham marriages. Before filing documents, the current wording of the law must be verified.

Second - study visas and residence permits. Study in authorised educational institutions uses a study basis, including the D3 visa and the study residence permit. Separately, new initiatives regarding the D6 visa for the study of minor foreigners and accompanying family members should be monitored, if such changes come into force.

Third - a general tightening of the approach to the grounds for stay, residence permits and the verification of the genuineness of the circumstances claimed.

Labour migration
From 1 March 2026, a new system of the right to engage in employment applies to the employment, entrepreneurial and self-employed activity of foreigners.

This concerns not only classic employees under an employment contract, but also self-employed foreigners, independent contractors, sole proprietors and persons who derive a financial benefit from activity in Georgia.

Employers and businesses must separately verify each foreign employee, director, sole proprietor and contractor.

Taxes
Taxes remain one of the most pressing topics. It is necessary to monitor not only the Tax Code, but also the decisions of the Revenue Service.

For example, an important area is income tax on the sale of assets. This concerns transactions involving real estate, shares, securities and other property.

Administrative regulation of certain types of activity
For a number of business sectors, simply registering a company is not enough.

Additional permits, notifications or registrations may be required for HoReCa, pharmaceuticals, education, medicine, transport, import, construction, the processing of personal data and other regulated sectors.

Before launching a business, you must verify not only the tax regime but also the administrative requirements for the particular activity.

The following primary sources were used in the preparation of this article:
Law of Georgia "On the Legal Status of Aliens and Stateless Persons"
Law of Georgia "On Labour Migration"
Decree No. 70 of the Government of Georgia on the right to engage in employment of labour immigrants and self-employed foreigners
Organic Law of Georgia "On Ownership of Agricultural Land"
Tax Code of Georgia
Labour Code of Georgia
Civil Code of Georgia
Law of Georgia "On Entrepreneurs"

ConclusionIn Georgia, it is indeed possible to purchase real estate quickly, register a business, formalise a marriage or apply for a residence permit. But "quickly" does not mean "without risk".

The cardinal rule: first the due diligence of documents, the tax model and the legal consequences, then the transaction, registration or launch of the project.

JUST Advisors provides support for real estate transactions, business registration, residence permits, employment matters, inheritance cases, tax planning and corporate procedures in Georgia.

In Georgia, it is indeed possible to purchase real estate quickly, register a business, formalise a marriage or apply for a residence permit. But "quickly" does not mean "without risk".

The cardinal rule: first the due diligence of documents, the tax model and the legal consequences, then the transaction, registration or launch of the project.

JUST Advisors provides support for real estate transactions, business registration, residence permits, employment matters, inheritance cases, tax planning and corporate procedures in Georgia.