Why Georgia – the country offers low taxes, easiness to set up legal entities, and the lowest regulatory barriers. In bonus, your business, would it be Individual Entrepreneur or LLC, will benefit one of the most dynamic & globally integrated financial systems.
Today we dive into establishing and running Individual Entrepreneur, which suits digital nomads, freelancers and remote workers, whether they are physically in Georgia or even outside. IE is the perfect solution for any self employed entrepreneurs or contractors working for big tech companies. It only takes a few business days to set up a compliant and viable entity of that kind. But interested parties should keep in mind that actual dates depend on various factors, such as current location of interested individuals, healthiness of their personal finances and so on.
However, before you register a legal entity, you should gain a work permit from the government. Whether you are in Georgia or outside, you are expected to get that permit. It is done online and remotely. That normally takes 30 days, but there is an option for 10 days with priority pass. Fees depend on how quickly you want to gain legal status. During this process you should present your business plan and proven record of your financial accounts. On this stage the final step will be the video interview with the Labour Migration Agency.
Take into consideration that even if you have already established IE in Georgia and enjoy self-employed status here, you also need to gain a work permit. Otherwise, you will be fined.
The next step is to establish IE. In case you are outside Georgia and would like to establish a company here remotely, you are going to need a power of attorney and someone to represent you here during the set-up process. In case you are already in Georgia and decided to register as self-employed, you have to get ready some papers as well. The whole process is executed in Public Service House. You can find more information on www.psh.gov.ge. For newcomers the part of this process is also to open a bank account in a Georgian bank. While the local banking system is highly digitalized, for this step vigorous KYC practice will examine your financial streams and intentions. You also will need an official address for a legal entity.
Once IE is registered, one can check its status on digital portal www.my.gov.ge. In case Public Service Hall denies registration for some reason, you can find the explanation and possible solution on the same page.
Another step is establishing your presence in the Revenue Service, local tax authority. You will be granted unique code and access to the digital portal. www.rs.ge is the place where you declare and pay tax(es). First tier tax is only 1%. If your annual income does not exceed GEL 500 000, or $150 000 you only pay 1% from your income. Above that threshold tax rises to 3%. However, above GEL 100 000 annual income, the self-employed also have to pay VAT, which is 18% in Georgia. The registrant has to declare his incomes and pay tax on a monthly basis. Digitalisation of revenue services allow you to lead your bookkeeping entirely on your own or seek qualified help.
And last and not least step is to get a labor residence permit. The process is pretty similar to work permit acquisition. But here you have options for 10, 20 and 30 days procedures. The key difference here is to demonstrate that your Georgian legal status is now active and able to generate income and is a viable legal entity.
Some of the regulations have taken into force recently, so one of the mistakes that entrepreneurs make is missing the bigger picture and overlooking some crucial parts of their application process. If you feel Georgia should be your next move but you are focused on your goals and do not have enough time for paperwork, the qualified team of Nomad Georgia will gladly guide you to your new legal and tax destination.
For more information and free consultation with our experts contact us.