I hope you find this video helpful. I tried experimenting with b-rolls throughout the video. Let me know if the watching is more engaging with them or no :)
Hi. First of all, nice video. I have several additional questions: 1. Besides the 1% turnover tax, do you need to pay social security and health insurance ? If so, how much ? 2. Do I need to translate all my contracts and invoices issued to my clients also to Georgian language ? I'm currenlty using English for all my invoices. Thank you and keep up the good work!
Thank you! 1. Nope. It's not mandatory in Georgia. You can pay for yourself but nobody care if you do or don't. 2. No, all my invoices and contracts are in English. Also, nobody will ask about you contracts or invoices.
Great insights. I plan to open bank account, remote worker company as well, administration offices efficiency equal between tbilisi batumi, or the capital is the only option to get bureaucracy done?
I think Batumi has the same administrative offices as in Tbilisi. At least they 100% have Public City Hall and Revenue service. It's probably even more convenient because of how close everything is there.
Such a great video! I have some questions please: 1. Do I need a personal or Business Bank account? 2. What if my income varies from month to month, can I pay a different tax each month? 3. Can I make a transfer from my BoG to TBC and count it as income? or should the income be sent exclusively by my client ?
Thanks! 1. Both is fine for this type of company. Even foreign account works (But you will need to figure out how to pay taxes without Georgian bank account it's a bit of a hustle) 2. Yes, of course. You fill in the declaration your actual income. Rarely any businesses have the same income month-to-month. 3. No, it's not an income. It should be paid by your customer(s).
Quick question. How much is the total in cost to open a small business/freelancer there? Do you get taxed at 1% and 20% income tax at the same time? 1% business tax 20% income tax as an employee of your small business. Thanks in advance
Hey! The total cost is very small, I believe I mentioned in the video the opening fee. Regarding to the taxes, you only pay 1% and that's it. In some cases, you're obligated to add VAT as well. Mostly, if you have clients in Georgia, if you're clients are outside of Georgia, you don't need to pay VAT. You're not employee of your company, it's Sole Proprietorship form so no employment.
Hey Dmitrii, I understand you're not a tax advisor but just want your thoughts. What would your advice be for someone who wants to live in a country such as France, but wants to pay low taxes in business. France taxes on world wide PERSONAL income. For example, You start a US LLC, Your Georgian company owns the US LLC, all income passes from the US to the Georgian company. You pay taxes on the total income to the Georgian company. Correct? If you think there is a better situation let me know your thoughts
I don't know much about corporate taxes to be honest since I only had Sole Proprietorship entities. With them you always pay income tax of your country of residence. Many people recommend countries like Estonia, Singapore. Georgia is also good for LLC but I would prefer more developed country for my business to be honest. In your example why not just pay the US corporate taxes? What's the reason transferring money to Georgian company? When you pay yourself a salary or dividends (usually lower taxed), you'll still pay taxes in France on personal income/dividends. There is no avoidance on this. I would strongly advise you to hire French tax lawyer :) That's what I would do for openning LLC.
Hi, I use google spreadsheet :) I've been using it for years. I don't use any bookkeeping because it's not required by Georgian government and there is nothing to bookkeep when you need to pay taxes in three clicks once a month :)
Great video！ i have some questions want to know: 1.As the owner of an ie company, can I apply for work residency for myself or my employees? When I reach the standard of 50,000 lari? 2.Can an IE type company purchase insurance for its employees? 3.When IE's annual turnover exceeds the standard, can I apply to convert it into an LLC?
Thanks! 1. Yes for yourself you can as far as I know. I don't know about your employees. Keep in mind with huge increase of resident permits requests, there are more and more declines nowadays. 2. No idea, I've never had employees. 3. You can open LLC at any time, I don't think it matters the turnover you have. I don't really know about "converting". You probably can ask all this questions at Public Service Hall.
Great Video Dmitrii and very interesting taxation system in Georgia! I am just wondering how much social security you need to pay monthly? And is there any minimum requirement of days you need to stay in Georgia? Best, Sam
Hey Sam! I already replied on Instagram but just for the future reference - there is no mandatory social security and no minimum requirements of stay for the company.
Hey Dimitri, thanks for the video, very insightful. How does the invoicing look like when your individual company is se in Georgia and you work as a freelancer for EU based companies (in Germany or France)? Are you aware of any limitation/issue due to the fact that the company and bank account are Georgian? Or is it very easy to sell your services to these countries? Thanks in advance!
I work as Georgian company for the Dutch company for a while. I didn't have any limitations and my company didn't have any issues of paying me either. They didn't care than I have Georgian bank. Plus, you can use any bank to receive money (Wise, Revolut etc), there is no requirements from Georgian government for bank accounts.
Thank you for the video! What were the requirements for you (Visa) so you were able to rent an apartment? So is it possible to go with a tourist visa until you have everything figured out then open the company and register for short term residency or did you totally move to Georgia on the longterm?
Yes, Georgia allows you (most passports) to stay without a visa for 1 year. You can basically live there indefinitely and do quick visa runs every year. You can open a company without any visa.
Thank you for the great video. I have a question about receiving international payments from clients. Do they pay you directly into your TBC account? Do you ever have any problems with this? thanks again
Yes, correct. Never had any issues with getting SWIFT transfers to TBC. As long as it's a well-established bank like TBC/Bank of Georgia it's shouldn't be a problem. There are shady banks like Terabank. They can have some issues because their world credit rating is low. I would not recommend opening less-known banks.
Thanks for the video! Did you use a personal bank account or a business account to receive money for your services and pay taxes in Georgia? You simply withdraw the money (minus company tax 1%) to your personal spending account? Personal bank accounts are a bit cheaper that's why I am asking.
Hi Dmitrii! At first, did you stay in an Airbnb? And later, did you look for something more permanent to rent? Or, how did you go about finding a landlord who allowed you to use his address?
Hey! I have a separate video about finding an apartment in Tbilisi: ua-cam.com/video/OJlqNE8jShs/v-deo.htmlsi=rkQ3JY_9_iz2JBYj. But in short yes, I stayed in Airbnb for the first months and then find a more permanent place. Allowing the tenant to use the address for the company is quite common in Georgia.
Thank you so much for your very helpful video🙏 Do you or anyone else know about the situation for Iranian citizens? In which banks can they open accounts?
There are two case scenario : 1. Im working in dubai and have a two year validity residence permit 2. My passport is Indian Keeping these two things in mind, what should be the convinient way to move to Georgia as a freelancer. I am working in the blockchain industry and usually received payments in UsDT.
The most convenient way for freelancers is to open a Sole Proprietorship as described in this video. You'll have to figure out what you have to pay in front of Saudi Arabia in that case though if you continue to be a tax resident there. Banks here don't support cryptocurrency (as everywhere :) so you have to figure out how to get paid as well.
Hey, thanks for this info. I want to open my businnes as a freelancer fully online. I know it's possible in Georgia to open company. But I have a problem with the resident address. Do you know the other options for the legal resident address? Like virtual offices or to rent small place online and stuff like that?
You're welcome! I only know that you can usually buy this address from the people near the Public City Hall. But I wouldn't consider this 100% legal. You need an approval from the owner of the address. This is the main important thing. Postbox won't work.
Thank you for this very useful video! I have a question - I recently registered as a "small business" because that was what was recommended to me but since I don't work every month and am kind of on a break from full time work, my annual income doesn't even hit 30,000GEL. Is it possible to switch from "small business" status to "micro business" status?
You need to pay income taxes if you're tax resident of Georgia. I've never been tax resident there (opening the company doesn't make you one automatically) so I have very limited knowledge. Plus, trading is usually the whole other world of taxes.
Thanks for this effort! I wish to open a single entrepreneur business, BUT as a Canadian I have actually live elsewhere and have tax residency there. IM happy to live some time in Georgia, but also Bali, Mexico etc. How quickly can I be considered a Georgian tax resident and begin to travel elsewhere- For Canadian purposes I wont be there more then 2-3 months a year to snowboard;) I heard somewhere as long as I add up to 183 days in Georgia in any 12 month period I would qualify, but after qualifying do I need to keep living there 183 days a year to maintain that status?
You will be considered as Georgian tax resident after staying in the country for 183 days. It's not related to openning a company though. Tax residency is for personal income taxes, not for company taxes. If you open a company in Georgia you will have to pay taxes for this company from day 1. For some reason people often mix these two types of taxation.
@@dpashutskii as far as I understand international tax treaties - the reason people link this together is that if you’re not a tax resident of Georgia, then your worldwide income (including income from your Georgian company) will be taxed the country where you are a tax resident. So if you open a Georgian company, and you don’t stay 183 days in Georgia - his income will be taxed under Canadian law, not Georgian. That being the case, you would have to stay 183 days a year to maintain the 1% tax.
Adding my non-expert understanding, once you get foreign tax residency, you technically can keep it without spending 183 days a year there, as long as you do not give reasons to be considered a tax resident in any other country (which may be difficult long term). As an example: in 2023 you spend 200 days in Georgia, you become a tax resident and in 2024 you are digital nomading spending 90 days each in Georgia and 3 other countries - in this case you can remain GE tax resident, as no other country can 'claim' you as their tax resident (as long as you do not have house/ spouse/ kids settled in any country)
@@Lagr3n This is my understanding as well. I think it's a bit complicated because you have to renounce your tax residency in your home country to become a resident in another one. And this process could be hard or easy, depending on your country. But in general, it's true.
Thanks! When openning the company you'll have to show "approval from the owner of the address" that they allow you to open a company there. Unless you own the place of course. If your virtual address provider can give you this approval it could work. But only if it's a real address (office or apartment). Postboxes won't work.
Hi Dmitrii, what are the requirements to get permission for the small business with 1% income tax? I have heard that consulting is not accepted? What is your business?
I was a freelancer. There are not many requirements except type of the business and the turnover up to a certain amount. I think consulting should be accepted.
Hello, i would like to ask if an airbnb rented flat can be used for company adress, or do you need a long term contract with land lord? additionally, really helpful content. thanks in advance
Hey, I don't. My income streams are very straightforward and I don't need an accountant for them. I just pay taxes every month from the certain amount.
@@YOUbandOfficial If you feel you can't/don't want to do taxes yourself, definitely hire an accountant/tax consultant. Taxes filed per payment date when the money arrived at your bank account.
The legal address part is the most important for me, as I am an EU citizen. What is the best way to approach it, just find georgian host that would help me with that for some extra cash?
The best way is to use the address where you're living and ask host for this permit (for free). If they're asking for money it's already something shady going on. If you're not planning to stay in Georgia, than it's not that important for you ;) In that case, you can just find a person who can provide their address for money, yes. There are plenty of people right near the City Hall who're doing this.
So if I open a bank account and start receiving payments before setting up my company. The bank will deduct 20%? Or what you mean when you mentioned that's better not to receive income before the first tax month?
It doesn't matter where you open a bank account. It matters though when you started receiving money as a company. If your company earns money before it was moved to the tax scheme (Small or micro business) which happens on the 1st date after the following the application, then you have to pay 20% income tax instead of 1%.
@@dpashutskii But I mean before setting up a company. If I was receiving money in my Georgian account, am I also entitled to pay taxes for the amounts received during that period?
Yes, it's okay to use personal bank account for individual entrepreneur income or transactions. You don't need specific business account, it's only for LLC.
@@igor8111 Oh, sorry. I didn't know that. It's only for new users then. Because I still use my personal account. I know they changed some rules for citizens of russia or belarus. Do you know if it's for everyone?
Hi there! I’m a registered I.E and I qualify for the 1% tax rate however I am not earning any money as income as yet, I only make personal transfers (day to day transfers that’s not earned as income and get a monthly inheritance from my family, do I still have to declare taxes ? If so I could not see the tax declaration section for Individual Entrepreneurs. Thanks!
You can submit empty declarations (with 0 revenue) or don't submit them at all (I didn't when I wasn't earning anything). You must not submit transfers.
@@dpashutskii if I could pay 1% whilst living in Sweden I'd probably pass out from the complete loop hole but I'm skeptical. Sweden are hardcore with taxes
@@jacklarkins3193 There are no requirements for giving up your tax residency. Company taxes and personal income taxes are kinda different things. 1% in Georgia is basically tax you're paying for operating as a Sole proprietorship (technically company taxes although it's different from corporate taxes since it's not an LLC). Company taxes you pay where your company is. Personal income taxes you pay where you have tax residency. After you pay this 1% you have to pay your income tax if you have a different residency from Georgia. For example, if you're a tax resident in Sweden and let's say you have a personal income tax of 40%. You will pay 1% and then on the remaining money, you'll pay 40%. It's only true if Sweden taxes the foreign income of course. You might be eligible for a tax deduction if Georgia and Sweden have a double taxation agreement hence you pay 39% in that example. Some countries do not tax foreign income but it's also grey area because you can't work remotely as a freelancer from Sweden and even if you charge money as a Georgian company it won't be considered foreign income. Because technically you physically do the work from Sweden. So basically this scheme is good for people who either live in Georgia or for digital nomads who don't live in their country and stay in most of the countries for less than 183 days. If this is the case, you'll pay just 1% and nothing else. But Georgia doesn't care where you live or operate your company, they will tax you 1% anyway. So you can open a company and leave. I did it for a few years. Now I'm planning to move to the Netherlands and I'm gonna be taxed 49% despite having operations in Georgia :) Also, bear in mind I'm not a tax advisor and there are millions of exceptions from what I wrote above :)
If I get a Small Business Certificate and thus pay 1% tax AND unregister my current business from where I am (Germany) and unregister from here (as I travel most of the time), I'd technically only pay the 1% and nothing else, right? (Would have no problem staying 6 months in Georgia within 12 months, as Batumi is very beautiful and just travel the rest)
Is it suitable for dropshipping? For example i live in albania and i sell items worldwide and they're being shipped from china. can i collect payments in georgia and pay %1 tax on it?
It would be best if you double-checked the types of activities Georgian solopreneurship allows. Also, you will have to pay two taxes: Georgian 1% + Albanian income tax. It doesn't matter where your company is, you pay income tax based on your residency.
thanks for the reply mate! actually i'll become a resident of Turkey next month and Georgia and Turkey have an agreement on preventing double taxation. do you know if that also applies to individual entrepreneurs or only for LLCs and Corporations?@@dpashutskii
Double taxation is only applied to personal taxes. Business taxes and personal taxes are not related in any way. You pay business taxes in the country where you'r company is registered. You pay personal income taxes in the country where you're a tax resident. Double taxation treaty is needed when you have personal income from one country but live in another one. It doesn't matter the source of the income. Also, it only covers the lower bracket usually. So if you have income in the country with 1% income tax but live in the country with 30% tax, you'll still pay 29% tax in the country of residence.
is it still true that i don't need to have an account in georgia? i was at rs office and they said that i need it. can the 1% tax be paid from foreign account?
You definitely don't HAVE to. I don't have one and doing just fine. It's good to have one if you have complicated case and can't figure the stuff out on your own.
@@citypoint7885 You are picking tax regime that you will be using for your company. They don't need your address, it's already inside the company documents. No, the only difference is that you will standard income tax (20%).
It's not related to staying requirements in any way. Most of the passports can stay in Georgia for 365 days without a visa. It doesn't matter if you have company there or not.
@@adamputh1090 No, because it wouldn't make sense. If you can stay for 1 year without a visa. Digital nomad visas make sense only in visa required countries.
I register the company in Georgia 🇬🇪 bro I’m in Georgia 🇬🇪 but I can’t open a company open in bog & tbc they rejected our application Can you suggest any good idea ?
Why did they reject your application? Did they explain? I've never heard of rejections unless you're from russia but even in that case they usually ask for proof of income and that's it. You can try any other bank.
@@citypoint7885 Credobank, TeraBank, Silk road Bank. But I'd instead ask why previous banks did not open you an account. It could be the same reason that other banks will decline too.
@@citypoint7885 100$ sounds like tooo cheap. I would be worried if it's scam or not. The prices for LLC companies starts from 1000$ from the local lawyers. If you're talking about payment online solution I can recommend paddle.com/
@@dpashutskii hello brother now I’m in Georgia Paddle not supported for us they say we only provide record system videos but our company Doing the course in online can you send any other gateway
I hope you find this video helpful.
I tried experimenting with b-rolls throughout the video. Let me know if the watching is more engaging with them or no :)
hello, do you know any english speaking honest accountant or/and lawyer in georgia?
thank you :)
@@rb9888 I personally never needed one but I know many people use expathub.ge
very useful, thank you!
just what I needed
taxes in Romania are insane and will be worse starting next year....50%~ and 24%~ VAT
Thank you for the video - it was really helpful
Glad it helped!
That was very helpful to me. Thank you Dmitri 🙏
Glad it was helpful!
Great vid mate, huge thanks!
My pleasure!
Your videos are super useful! Thank you!!!
Happy to hear that!
Hi. First of all, nice video. I have several additional questions:
1. Besides the 1% turnover tax, do you need to pay social security and health insurance ? If so, how much ?
2. Do I need to translate all my contracts and invoices issued to my clients also to Georgian language ? I'm currenlty using English for all my invoices.
Thank you and keep up the good work!
Thank you!
1. Nope. It's not mandatory in Georgia. You can pay for yourself but nobody care if you do or don't.
2. No, all my invoices and contracts are in English. Also, nobody will ask about you contracts or invoices.
What do you do for insurance?
@@Ahduciekwndnbbbsvvvghhhyyyyy You mean medical insurance? I usually use SafetyWings (bit.ly/dpashutskii-safetywing) in any country.
Great insights. I plan to open bank account, remote worker company as well, administration offices efficiency equal between tbilisi batumi, or the capital is the only option to get bureaucracy done?
I think Batumi has the same administrative offices as in Tbilisi. At least they 100% have Public City Hall and Revenue service. It's probably even more convenient because of how close everything is there.
Very helpful
Glad you think so!
Such a great video!
I have some questions please:
1. Do I need a personal or Business Bank account?
2. What if my income varies from month to month, can I pay a different tax each month?
3. Can I make a transfer from my BoG to TBC and count it as income? or should the income be sent exclusively by my client ?
Thanks!
1. Both is fine for this type of company. Even foreign account works (But you will need to figure out how to pay taxes without Georgian bank account it's a bit of a hustle)
2. Yes, of course. You fill in the declaration your actual income. Rarely any businesses have the same income month-to-month.
3. No, it's not an income. It should be paid by your customer(s).
Bro this was immensely helpful
Glad to hear it!
Quick question. How much is the total in cost to open a small business/freelancer there?
Do you get taxed at 1% and 20% income tax at the same time?
1% business tax
20% income tax as an employee of your small business.
Thanks in advance
Hey!
The total cost is very small, I believe I mentioned in the video the opening fee.
Regarding to the taxes, you only pay 1% and that's it. In some cases, you're obligated to add VAT as well. Mostly, if you have clients in Georgia, if you're clients are outside of Georgia, you don't need to pay VAT.
You're not employee of your company, it's Sole Proprietorship form so no employment.
Hey Dmitrii, I understand you're not a tax advisor but just want your thoughts. What would your advice be for someone who wants to live in a country such as France, but wants to pay low taxes in business. France taxes on world wide PERSONAL income. For example, You start a US LLC, Your Georgian company owns the US LLC, all income passes from the US to the Georgian company. You pay taxes on the total income to the Georgian company. Correct?
If you think there is a better situation let me know your thoughts
I don't know much about corporate taxes to be honest since I only had Sole Proprietorship entities. With them you always pay income tax of your country of residence.
Many people recommend countries like Estonia, Singapore. Georgia is also good for LLC but I would prefer more developed country for my business to be honest.
In your example why not just pay the US corporate taxes? What's the reason transferring money to Georgian company? When you pay yourself a salary or dividends (usually lower taxed), you'll still pay taxes in France on personal income/dividends. There is no avoidance on this.
I would strongly advise you to hire French tax lawyer :) That's what I would do for openning LLC.
Which program you using for your invoices for your costumers? What's about bookkeeping?
Hi, I use google spreadsheet :) I've been using it for years. I don't use any bookkeeping because it's not required by Georgian government and there is nothing to bookkeep when you need to pay taxes in three clicks once a month :)
@@dpashutskii yeah but your costumers needs an invoice? :D
@@patrick1992 Yep, I use google spreadsheet as I said.
Dmitri thanks for the video, for the IE 1% level, will I need contract with the businesses I freelance for?
Hey!
To open IE they don't ask anything, only area where you're gonna work (like software engineering)
Great video！
i have some questions want to know:
1.As the owner of an ie company, can I apply for work residency for myself or my employees? When I reach the standard of 50,000 lari?
2.Can an IE type company purchase insurance for its employees?
3.When IE's annual turnover exceeds the standard, can I apply to convert it into an LLC?
Thanks!
1. Yes for yourself you can as far as I know. I don't know about your employees. Keep in mind with huge increase of resident permits requests, there are more and more declines nowadays.
2. No idea, I've never had employees.
3. You can open LLC at any time, I don't think it matters the turnover you have. I don't really know about "converting".
You probably can ask all this questions at Public Service Hall.
thank you
Great Video Dmitrii and very interesting taxation system in Georgia! I am just wondering how much social security you need to pay monthly? And is there any minimum requirement of days you need to stay in Georgia? Best, Sam
Hey Sam!
I already replied on Instagram but just for the future reference - there is no mandatory social security and no minimum requirements of stay for the company.
Hey Dimitri, thanks for the video, very insightful.
How does the invoicing look like when your individual company is se in Georgia and you work as a freelancer for EU based companies (in Germany or France)? Are you aware of any limitation/issue due to the fact that the company and bank account are Georgian? Or is it very easy to sell your services to these countries?
Thanks in advance!
I work as Georgian company for the Dutch company for a while. I didn't have any limitations and my company didn't have any issues of paying me either. They didn't care than I have Georgian bank.
Plus, you can use any bank to receive money (Wise, Revolut etc), there is no requirements from Georgian government for bank accounts.
Thank you for the video! What were the requirements for you (Visa) so you were able to rent an apartment? So is it possible to go with a tourist visa until you have everything figured out then open the company and register for short term residency or did you totally move to Georgia on the longterm?
Yes, Georgia allows you (most passports) to stay without a visa for 1 year. You can basically live there indefinitely and do quick visa runs every year.
You can open a company without any visa.
Thank you for the great video. I have a question about receiving international payments from clients. Do they pay you directly into your TBC account? Do you ever have any problems with this? thanks again
Yes, correct.
Never had any issues with getting SWIFT transfers to TBC. As long as it's a well-established bank like TBC/Bank of Georgia it's shouldn't be a problem.
There are shady banks like Terabank. They can have some issues because their world credit rating is low. I would not recommend opening less-known banks.
@@dpashutskii Thanks for the reply :)
Thanks for the video! Did you use a personal bank account or a business account to receive money for your services and pay taxes in Georgia? You simply withdraw the money (minus company tax 1%) to your personal spending account? Personal bank accounts are a bit cheaper that's why I am asking.
I used a personal account. For this type of business, it doesn't really matter because it's a sole proprietorship.
Hi Dmitrii! At first, did you stay in an Airbnb? And later, did you look for something more permanent to rent? Or, how did you go about finding a landlord who allowed you to use his address?
Hey! I have a separate video about finding an apartment in Tbilisi: ua-cam.com/video/OJlqNE8jShs/v-deo.htmlsi=rkQ3JY_9_iz2JBYj.
But in short yes, I stayed in Airbnb for the first months and then find a more permanent place.
Allowing the tenant to use the address for the company is quite common in Georgia.
Thank you so much for your very helpful video🙏
Do you or anyone else know about the situation for Iranian citizens? In which banks can they open accounts?
Hello, no, not really but I think you can try any bank and see.
There are two case scenario : 1. Im working in dubai and have a two year validity residence permit
2. My passport is Indian
Keeping these two things in mind, what should be the convinient way to move to Georgia as a freelancer.
I am working in the blockchain industry and usually received payments in UsDT.
The most convenient way for freelancers is to open a Sole Proprietorship as described in this video.
You'll have to figure out what you have to pay in front of Saudi Arabia in that case though if you continue to be a tax resident there.
Banks here don't support cryptocurrency (as everywhere :) so you have to figure out how to get paid as well.
how to get temporary residency?
You need to have annual turnover on your company more than 50000 lari for the last 12 month. Then you can apply for residency.
Hey, thanks for this info. I want to open my businnes as a freelancer fully online. I know it's possible in Georgia to open company. But I have a problem with the resident address. Do you know the other options for the legal resident address? Like virtual offices or to rent small place online and stuff like that?
You're welcome!
I only know that you can usually buy this address from the people near the Public City Hall. But I wouldn't consider this 100% legal.
You need an approval from the owner of the address. This is the main important thing. Postbox won't work.
Thank you for this very useful video! I have a question - I recently registered as a "small business" because that was what was recommended to me but since I don't work every month and am kind of on a break from full time work, my annual income doesn't even hit 30,000GEL. Is it possible to switch from "small business" status to "micro business" status?
I think you can. But I've never done it. You can ask about it in the Tax office.
Hello and thanks for the video.
I am a trader, I don't have a company. How does it work with taxes in Georgia?
You need to pay income taxes if you're tax resident of Georgia. I've never been tax resident there (opening the company doesn't make you one automatically) so I have very limited knowledge. Plus, trading is usually the whole other world of taxes.
Thanks for this effort! I wish to open a single entrepreneur business, BUT as a Canadian I have actually live elsewhere and have tax residency there. IM happy to live some time in Georgia, but also Bali, Mexico etc. How quickly can I be considered a Georgian tax resident and begin to travel elsewhere- For Canadian purposes I wont be there more then 2-3 months a year to snowboard;) I heard somewhere as long as I add up to 183 days in Georgia in any 12 month period I would qualify, but after qualifying do I need to keep living there 183 days a year to maintain that status?
You will be considered as Georgian tax resident after staying in the country for 183 days.
It's not related to openning a company though. Tax residency is for personal income taxes, not for company taxes. If you open a company in Georgia you will have to pay taxes for this company from day 1.
For some reason people often mix these two types of taxation.
@@dpashutskii as far as I understand international tax treaties - the reason people link this together is that if you’re not a tax resident of Georgia, then your worldwide income (including income from your Georgian company) will be taxed the country where you are a tax resident.
So if you open a Georgian company, and you don’t stay 183 days in Georgia - his income will be taxed under Canadian law, not Georgian.
That being the case, you would have to stay 183 days a year to maintain the 1% tax.
@@Ahduciekwndnbbbsvvvghhhyyyyy Yes. As far as I understand the law it is correct.
Adding my non-expert understanding, once you get foreign tax residency, you technically can keep it without spending 183 days a year there, as long as you do not give reasons to be considered a tax resident in any other country (which may be difficult long term). As an example:
in 2023 you spend 200 days in Georgia, you become a tax resident and in 2024 you are digital nomading spending 90 days each in Georgia and 3 other countries - in this case you can remain GE tax resident, as no other country can 'claim' you as their tax resident (as long as you do not have house/ spouse/ kids settled in any country)
@@Lagr3n This is my understanding as well.
I think it's a bit complicated because you have to renounce your tax residency in your home country to become a resident in another one. And this process could be hard or easy, depending on your country.
But in general, it's true.
So do I first need to rent an apartment and get the land lord to help me? How long? Is 2 weeks enough? Or need it be 1 or 2 months?
I am interested
👌
For personal taxes when does the Georgian tax year run from.....is it 1st January to 31st December. Any advice appreciated. Thanks
Georgian tax year is a calendar year, yes. But it's not really related to how you pay your taxes since it's monthly.
can u use a virtual office address as legal resident address? great vid btw! :)
Thanks!
When openning the company you'll have to show "approval from the owner of the address" that they allow you to open a company there. Unless you own the place of course.
If your virtual address provider can give you this approval it could work. But only if it's a real address (office or apartment). Postboxes won't work.
Hi Dmitrii, what are the requirements to get permission for the small business with 1% income tax? I have heard that consulting is not accepted? What is your business?
I was a freelancer. There are not many requirements except type of the business and the turnover up to a certain amount. I think consulting should be accepted.
Interesting.im curious as to if this would be ideal for a manufacturing company?
Hey! I'm not really sure because I know nothing about manufacturing. But I'd say that LLC seems like a more suitable solution.
@@dpashutskii thank you
Hello,
i would like to ask if an airbnb rented flat can be used for company adress, or do you need a long term contract with land lord?
additionally, really helpful content. thanks in advance
I don't think so unless your Airbnb host will allow you to do it and provide the required documents. So it depends on them.
Thanks for watching!
How do you do your accounting? Do you have an accountant or do you use any particular software?
Hey, I don't.
My income streams are very straightforward and I don't need an accountant for them. I just pay taxes every month from the certain amount.
@@YOUbandOfficial If you feel you can't/don't want to do taxes yourself, definitely hire an accountant/tax consultant.
Taxes filed per payment date when the money arrived at your bank account.
The legal address part is the most important for me, as I am an EU citizen. What is the best way to approach it, just find georgian host that would help me with that for some extra cash?
The best way is to use the address where you're living and ask host for this permit (for free). If they're asking for money it's already something shady going on.
If you're not planning to stay in Georgia, than it's not that important for you ;) In that case, you can just find a person who can provide their address for money, yes. There are plenty of people right near the City Hall who're doing this.
@@dpashutskii wow, thank you so much :)
So if I open a bank account and start receiving payments before setting up my company. The bank will deduct 20%? Or what you mean when you mentioned that's better not to receive income before the first tax month?
It doesn't matter where you open a bank account.
It matters though when you started receiving money as a company. If your company earns money before it was moved to the tax scheme (Small or micro business) which happens on the 1st date after the following the application, then you have to pay 20% income tax instead of 1%.
@@dpashutskii But I mean before setting up a company. If I was receiving money in my Georgian account, am I also entitled to pay taxes for the amounts received during that period?
Is it ok to use an individual account for an individual entrepreneur? Or I need to open a business account?
Yes, it's okay to use personal bank account for individual entrepreneur income or transactions. You don't need specific business account, it's only for LLC.
@@dpashutskii no, its wrong. You have to open special business account now. Rules were changed some days ago.
@@igor8111 Oh, sorry. I didn't know that. It's only for new users then. Because I still use my personal account.
I know they changed some rules for citizens of russia or belarus. Do you know if it's for everyone?
@@dpashutskii yes, it's for everyone
and you have to pay 50 GEL fee in Bank of Georgia and 70 GEL in JSC Liberty bank
Does this work if you're a remote worker for a company based in another country getting paid an annual salary?
Yes, it's exactly my case so it's working.
Hi there! I’m a registered I.E and I qualify for the 1% tax rate however I am not earning any money as income as yet, I only make personal transfers (day to day transfers that’s not earned as income and get a monthly inheritance from my family, do I still have to declare taxes ? If so I could not see the tax declaration section for Individual Entrepreneurs. Thanks!
You can submit empty declarations (with 0 revenue) or don't submit them at all (I didn't when I wasn't earning anything). You must not submit transfers.
I assume I have to live in Georgia in order to be under this scheme? Im not able to go there, open up & then leave right?
Nope, you can do it from day one. Once you open everything you can leave and operate from abroad. There is no requirements for stay in Georgia.
@@dpashutskii wait whaaaat? But I'd have to give up my tax residency where I am now?
@@dpashutskii if I could pay 1% whilst living in Sweden I'd probably pass out from the complete loop hole but I'm skeptical. Sweden are hardcore with taxes
@@jacklarkins3193 There are no requirements for giving up your tax residency. Company taxes and personal income taxes are kinda different things.
1% in Georgia is basically tax you're paying for operating as a Sole proprietorship (technically company taxes although it's different from corporate taxes since it's not an LLC). Company taxes you pay where your company is. Personal income taxes you pay where you have tax residency.
After you pay this 1% you have to pay your income tax if you have a different residency from Georgia. For example, if you're a tax resident in Sweden and let's say you have a personal income tax of 40%. You will pay 1% and then on the remaining money, you'll pay 40%. It's only true if Sweden taxes the foreign income of course.
You might be eligible for a tax deduction if Georgia and Sweden have a double taxation agreement hence you pay 39% in that example.
Some countries do not tax foreign income but it's also grey area because you can't work remotely as a freelancer from Sweden and even if you charge money as a Georgian company it won't be considered foreign income. Because technically you physically do the work from Sweden.
So basically this scheme is good for people who either live in Georgia or for digital nomads who don't live in their country and stay in most of the countries for less than 183 days. If this is the case, you'll pay just 1% and nothing else. But Georgia doesn't care where you live or operate your company, they will tax you 1% anyway. So you can open a company and leave.
I did it for a few years. Now I'm planning to move to the Netherlands and I'm gonna be taxed 49% despite having operations in Georgia :)
Also, bear in mind I'm not a tax advisor and there are millions of exceptions from what I wrote above :)
@@dpashutskii Exactly. It is just not that simple.
What if I do not wanna live in Georgia anymore and move away and have no address anymore. what happens to the company?
Nothing will happen to it until you close it. In theory, you have to have a business address though.
If I get a Small Business Certificate and thus pay 1% tax AND unregister my current business from where I am (Germany) and unregister from here (as I travel most of the time), I'd technically only pay the 1% and nothing else, right?
(Would have no problem staying 6 months in Georgia within 12 months, as Batumi is very beautiful and just travel the rest)
Correct.
@@dpashutskii Interesting. Gonna try it next month!
@@marcof1804 did you try ?#
Is it suitable for dropshipping? For example i live in albania and i sell items worldwide and they're being shipped from china. can i collect payments in georgia and pay %1 tax on it?
It would be best if you double-checked the types of activities Georgian solopreneurship allows.
Also, you will have to pay two taxes: Georgian 1% + Albanian income tax. It doesn't matter where your company is, you pay income tax based on your residency.
thanks for the reply mate! actually i'll become a resident of Turkey next month and Georgia and Turkey have an agreement on preventing double taxation. do you know if that also applies to individual entrepreneurs or only for LLCs and Corporations?@@dpashutskii
Double taxation is only applied to personal taxes. Business taxes and personal taxes are not related in any way. You pay business taxes in the country where you'r company is registered. You pay personal income taxes in the country where you're a tax resident.
Double taxation treaty is needed when you have personal income from one country but live in another one. It doesn't matter the source of the income. Also, it only covers the lower bracket usually. So if you have income in the country with 1% income tax but live in the country with 30% tax, you'll still pay 29% tax in the country of residence.
thanks for the info dude!@@dpashutskii
Do I have to apply for individual entrepreneur for doing Wolt delivery in Tbilisi
I think it's best to ask Wolt.
But all the delivery services usually use individual entrepreneurs instead of direct employment.
How do I make an online appointment for business registration?
I think it should be somewhere on the Public City Hall website: psh.gov.ge/.
@@dpashutskii That is the most horrible website ever :)
Isn’t there a revenue cap?
There is a turnover cap of 500,000 GEL for 1% tax, and then you jump to 3% tax. I think 3% doesn't have any limits.
@@dpashutskii ohh, okay, this is cool. I thought the cap puts you on some high tax, but 3% is fine
Is it necessary to stay 183 days in Georgia to benefit from 1% tax?
No. 183 days rule only applies to personal taxes. Not to taxes you pay for your company.
is it still true that i don't need to have an account in georgia? i was at rs office and they said that i need it.
can the 1% tax be paid from foreign account?
You definitely don't HAVE to. I don't have one and doing just fine. It's good to have one if you have complicated case and can't figure the stuff out on your own.
hello, Is LLP the same as individual entrepreneur?
Hey, Nope. LLP is a dedicated company.
@@dpashutskii thank you .
After the registration we need to must apply for tax department?
Yes, correct.
@@dpashutskii what is the requirements to apply the tax department
@@citypoint7885 You have to open your sole proprietorship beforehand. That's the only requirement.
@@dpashutskii it’s different from the company address | we need have rental agreement again?
Without tax registration our company will ban ?
@@citypoint7885 You are picking tax regime that you will be using for your company. They don't need your address, it's already inside the company documents. No, the only difference is that you will standard income tax (20%).
how long can we live in Georgia by this method?
It's not related to staying requirements in any way.
Most of the passports can stay in Georgia for 365 days without a visa. It doesn't matter if you have company there or not.
@@dpashutskii Okay so there is nothing like digital nomad visa or business visa?
@@adamputh1090 No, because it wouldn't make sense. If you can stay for 1 year without a visa.
Digital nomad visas make sense only in visa required countries.
I register the company in Georgia 🇬🇪 bro
I’m in Georgia 🇬🇪 but I can’t open a company open in bog & tbc they rejected our application
Can you suggest any good idea ?
Why did they reject your application? Did they explain? I've never heard of rejections unless you're from russia but even in that case they usually ask for proof of income and that's it.
You can try any other bank.
@@dpashutskii can you suggest any. Other banks
@@citypoint7885 Credobank, TeraBank, Silk road Bank. But I'd instead ask why previous banks did not open you an account. It could be the same reason that other banks will decline too.
@@citypoint7885 You could also be rejected if you are from Syria.
@@sbadrawi2011a I’m from Sri Lanka 🇱🇰
Does this give me the opportunity to stay in Georgia fulltime cz I'm from India and Indians need visa for Georgia.
It's hard to tell. It's better to discuss it with professionals but you can get residency based on your company. Residency allows you stay for sure.
@@dpashutskii Do you know any professionals that you can recommend to me?
expathub.ge is probably most well known
@@dpashutskii Thanks and BTW you have done every process on your own, right?
@@prateekwalia1898 Yes, correct!
Hello
hi
Within 2 week I will come to Georgia and register the LLC company registration brother
My agent say he will do everything for $100 is that far price ?
And
I need payment gateway can you suggest good one for me bro
@@citypoint7885 100$ sounds like tooo cheap. I would be worried if it's scam or not. The prices for LLC companies starts from 1000$ from the local lawyers. If you're talking about payment online solution I can recommend paddle.com/
@@dpashutskii hello brother now I’m in Georgia
Paddle not supported for us they say we only provide record system videos but our company
Doing the course in online can you send any other gateway