Georgia Tax Guide: the 1% Regime, and the Trap

Georgia sits 58th out of 217 in our world ranking, with a FiScore of 6.3 out of 10. That middling score hides something more interesting: for the right profile, Georgia is one of the cheapest places in the world to be taxed, and one of the easiest to move to.

It is also the country where the most confident advice on the internet is wrong. Let us start with what is true.

The headline numbers

Georgia is territorial for individuals: genuine foreign-source income sits outside the Georgian tax base entirely. There is no progressive scale, no surcharge, no wealth tax.

The 1% regime, and what it really covers

This is what draws people. An individual entrepreneur can apply for Small Business Status and pay 1% of turnover instead of 20% of profit.

Five hundred thousand lari is roughly 170,000 to 180,000 US dollars, which covers the great majority of freelancers and small consultancies. Registration is quick, the accounting is light, and it is entirely legitimate: this is a published regime, not a loophole.

Certain activities are excluded, and the list is worth checking against your own work before you plan around it.

The trap almost every guide gets wrong

Here is the part that matters more than the 1%.

People read "territorial taxation, foreign income is exempt" and conclude that invoicing a client in Berlin from a flat in Tbilisi produces foreign-source income. It does not.

Work performed physically in Georgia is Georgian-source income, whoever the client is and wherever the money lands. A foreign client does not make foreign income; a foreign bank account does not either. What matters is where you were sitting when you did the work.

This misunderstanding is the single most common mistake made about Georgia, and it is repeated confidently on dozens of nomad blogs. The practical consequence is usually benign, because Georgian-source income under Small Business Status is taxed at 1% anyway. It becomes expensive if you skipped registering because you believed you were outside the system entirely.

Getting there is genuinely easy

Citizens of a long list of countries, including the United States, the United Kingdom and most of the European Union, can enter Georgia and stay for a full year without a visa. No sponsor, no minimum investment, no lawyer.

That single fact explains a great deal of Georgia's popularity. You can arrive, test the country for a few months and decide, which is not something Malta, the UAE or Switzerland let you do.

Tax residence itself follows the usual 183-day logic.

If you are American

Citizenship-based taxation follows you to Tbilisi as it follows you everywhere. Georgia taking 1% does not stop the United States from taxing you, and there is no US-Georgia income tax treaty to smooth the overlap.

For many Americans the practical answer still works out, through the foreign earned income exclusion or foreign tax credits, but 1% Georgian tax generates very little credit to offset a US bill. Model it properly rather than assuming the two cancel out.

The drawbacks

Banking is the real friction. Georgian banks have become cautious with non-residents, and international transfers can attract questions. Plan for it rather than discovering it.

Geography is a risk factor. Georgia borders Russia and has occupied territories inside its internationally recognised borders. That is not an abstraction, and it belongs in any honest assessment.

Politics has been volatile, with sustained protests and tension around the country's European path. Nothing about that changes the tax code tomorrow, but it belongs in a ten-year plan.

The 1% status attracts scrutiny abroad. A structure that pays 1% is exactly what your former tax authority will look at hardest. Substance, presence and honest paperwork are what make it hold.

So, who is Georgia for?

• A freelancer or small consultancy under the threshold: the best 1% regime available anywhere, in a country you can move to next week.
• Someone testing a move before committing: unbeatable, thanks to the year of visa-free stay.
• A larger company or a group: less compelling. Look at the corporate rules rather than the individual ones.
• Anyone who needs deep, frictionless banking: think carefully.

The full table of Georgian rates is on our Georgia page, and the comparison tool puts it next to anywhere else.

Sources

Figures verified in August 2026 against the Georgian Revenue Service, PwC Tax Summaries and firms established in Tbilisi. An error reported to us gets fixed.

This page informs, it does not advise. Before deciding anything, talk to a professional who will look at your situation, as our terms of use set out.