Startups in Georgia: Taxes and Benefits 2025 — How to Obtain Status and Attract Investment
August 11, 2025
A new system of statuses for technology businesses has been introduced in Georgia: Innovative Startup, Innovative SME, and R&D Service Provider. Tax benefits are linked to these statuses and will take effect on September 25, 2025 (90 days after publication of Law No. 719-IIმს-XIმპ of June 27, 2025). Definitions, criteria, and procedures are described in the Law on Innovations.
Three Statuses: Criteria and Tax Benefits
1) Innovative Startup
Criteria:
≥ 15 million GEL by the end of year 6 (≥ 30% from the same sources).
Incompatible with statuses "International Company" and "Virtual Zone."
- Innovative activity + before application received ≥ 100,000 GEL investments (fund/angel network/accelerator) or ≥ 150,000 GEL grant from the agency.
- Revenue/expense profile.
- No tax arrears or insolvency procedures.
- Years 1−3: salaries — 0% PIT (within limits set by the Government in agreement with the parliamentary budget committee).
- Years 4−6: 5% PIT on salaries and 5% corporate income tax.
- Years 7−10: 10% PIT on salaries and 10% corporate income tax.
- Status is granted for 1 year, extendable up to 10 years in total.
- Extensions depend on attracted investments:
≥ 15 million GEL by the end of year 6 (≥ 30% from the same sources).
Incompatible with statuses "International Company" and "Virtual Zone."
2) Innovative Small/Medium Enterprise (SME)
Criteria:
When paying dividends, the taxable profit base may be reduced by three times the R&D expenses (procedure to be set by Government decree).
Duration: Unlimited (with annual confirmation).
- Enterprise of category 3 or 4.
- R&D expenses ≥ 5% of revenue and ≥ 100,000 GEL for the previous year.
- One of the following proof criteria met:
- Patent / deposited software.
- R&D agreement with a scientific organization or an accredited R&D provider.
- Accounting of expenses in line with government guidelines.
When paying dividends, the taxable profit base may be reduced by three times the R&D expenses (procedure to be set by Government decree).
Duration: Unlimited (with annual confirmation).
3) Company — R&D Service Provider
Criteria:
- Main activity — code 72.1 (research and experimental development in natural and engineering sciences).
- ≥ 80% of income in the previous year from this activity.
- No tax arrears or insolvency procedures.
- 5% PIT on salaries.
- 5% corporate income tax.
How to Obtain Status
- Prepare a package for GITA ([A1] forms and lists — in secondary legislation).
- Submit to GITA → verification and transfer to the Ministry of Economy.
- Government decision: granting/termination of status.
- Effective date: from the 1st day of the month following the decision.
Annual confirmation:
- Startups: 30 days before the end of the current year of status, with data for the past 12 months ending 60 days before expiry.
- SMEs and R&D Providers: until April 30 — indicators for the previous financial year.
Expected Impact
According to explanatory materials, within 5 years of launch:
According to explanatory materials, within 5 years of launch:
- Number of startups may reach 2,000.
- Private investment — up to 11 billion GEL.
- Employment — up to 26,000 jobs.
- Annual revenue of innovative companies — up to 1.5 billion GEL.
FAQ
question.:
When will the tax benefits take effect?
answer:
From September 25, 2025 (90 days after publication of Law No. 719 of June 27, 2025).
question:
Which taxes are reduced for an innovative startup?
answer:
PIT on salaries: 0% (years 1–3), 5% (years 4–6), 10% (years 7–10); corporate tax: 5% (years 4–6), 10% (years 7–10).
question:
What benefits does an innovative SME have for dividends?
answer:
Deduction from the corporate tax base — three times the amount of R&D expenses from the previous year.
question:
What are the tax rates for an R&D provider?
answer:
5% PIT on salaries and 5% corporate income tax.
question:
Where to apply for status?
answer:
To the GITA agency; the decision is made by the Government upon submission by the Ministry of Economy. Effective from the 1st day of the month following the decision.
Would you like to assess whether your team qualifies for Startup/SME/R&D Provider status in Georgia and how to optimize taxes under preferential regimes? The JUST Advisors team will prepare a criteria audit, a package for GITA, and an extension calendar — helping you access benefits and investments faster.
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MARIA GUSEINOVA
Leading Manager of Commercial Department
Leading Manager of Commercial Department
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