Residency via Business Activity - IE & LLC Path

Register as Individual Entrepreneur or form an LLC to qualify for Georgian residence permit, combining business operations with legal residency status. However, it's essential to understand that IE registration itself is straightforward with no revenue requirements, but obtaining residency based on IE status requires demonstrating annual turnover of GEL 50,000 (approximately $18,500 USD). This represents an accessible pathway for entrepreneurs and remote workers who can build sufficient business activity, while LLC-based residency requires substantially higher investment thresholds.

Critical Distinction: IE Registration vs IE Residency

Many resources conflate two distinct concepts that must be clearly understood. First, Individual Entrepreneur (IE) registration itself is simple, fast, and has no revenue requirements – anyone can register as an IE, operate their business, and pay the 1% tax on whatever revenue they generate, even if that's zero. Second, obtaining residence permit based on IE status requires meeting specific thresholds that demonstrate substantial business activity. These are two separate processes with different requirements.

For citizens of visa-exempt countries – including all EU nations, UK, USA, Canada, Australia, and many others – this distinction matters enormously. These individuals can enter Georgia and stay up to one year from their last entry without any residence permit at all. They can register as an IE, operate their business, file monthly tax declarations, and conduct all business activities during this visa-exempt stay without ever needing to apply for residency. Only if they wish to obtain formal residence status, either for longer-term stability or because they're from non-exempt countries, do the GEL 50,000 turnover requirements become relevant.

Individual Entrepreneur (IE) Registration - No Thresholds

Registering as an Individual Entrepreneur remains remarkably simple and accessible. Visit a Public Service Hall in person or apply through the online portal, present your passport and proof of legal entry to Georgia, complete the IE registration form available in multiple languages, pay the registration fee of 50-100 GEL (approximately $20-40), and receive your IE certificate and tax ID number within one to two hours if applying in person, or within one to two days if applying online. No minimum capital, no business plan, no revenue requirements, no restrictions on business type for most activities.

Once registered, you operate under Georgia's simplified 1% tax on gross turnover up to GEL 500,000 (approximately $185,000 USD) annually. Monthly tax declarations must be filed by the 15th of each month, taking just minutes once familiar with the online system. You can earn any amount from zero to GEL 500,000 annually and maintain valid IE status. This makes IE registration perfect for testing Georgian business operations, establishing legal business structure, operating as a freelancer or consultant, running online businesses, and providing services to international clients.

Residence Permit Based on IE Status - GEL 50,000 Required

To apply for a work residence permit based on your Individual Entrepreneur status, you must meet significantly higher requirements that demonstrate substantial business activity. The primary requirement is annual turnover of at least GEL 50,000 (approximately $18,500 USD) for the 12 consecutive months prior to your application. This turnover must be documented through official tax declarations filed with the Revenue Service, and for non-VAT registered IEs, verification typically requires a certified audit report from a licensed Georgian auditor or comprehensive bank statements from your Georgian business bank account showing the income flows.

Additional requirements include maintaining a bank balance of approximately $5,000 USD (roughly GEL 13,500-15,000) at the time of application, securing housing in Georgia documented through a rental agreement, property ownership, or written confirmation from someone hosting you, and demonstrating sufficient monthly personal income, typically around GEL 1,250 (approximately $460 USD) representing five times Georgia's subsistence minimum. The application process involves submitting all supporting documents to the Public Service Hall, providing biometric data, paying residence fees around 200 GEL (approximately $75), and waiting for processing which typically takes five to fifteen working days.

This means the realistic timeline for obtaining IE-based residency is substantial. Register your IE immediately, operate your business and build turnover throughout a full year while tracking all revenue carefully, ensure all monthly tax declarations are filed correctly and on time, maintain appropriate bank balances and secure housing, then apply for residency once you can demonstrate the required GEL 50,000 annual turnover. For many remote workers and entrepreneurs earning foreign income, reaching GEL 50,000 in annual turnover is quite achievable, but it requires actual business activity and cannot be obtained immediately upon IE registration.

IE Tax Obligations and Ongoing Requirements

Individual Entrepreneurs in Georgia benefit from one of the world's simplest tax systems regardless of whether they hold residency. The IE tax rate is a flat 1% of gross turnover (revenue, not profit) up to GEL 500,000 annually. If you earn GEL 5,000 in a month, you pay GEL 50 in tax. If you earn zero, you pay zero in tax. There are no complex deductions, no accounting requirements beyond basic record-keeping of revenue, and no need to hire accountants for standard situations involving straightforward service income.

Monthly tax declarations must be filed even when revenue is zero. The online filing system through the Revenue Service website takes literally five minutes once you're familiar with it. You log in with your credentials, enter your revenue for the month, and submit. The system calculates tax automatically. You can pay online through bank transfer or at banks. Filing deadlines are monthly, typically by the 15th of the following month. Maintaining this filing discipline is essential both for general IE compliance and particularly if you intend to eventually apply for residency, as your tax filing history becomes the primary documentation of your turnover.

For foreign-source income, the tax treatment depends on your tax residency status and Georgia's territorial taxation system. If you're operating as an IE while not being a Georgian tax resident – common for visa-exempt nationals staying under one year or those maintaining tax residency elsewhere – foreign-source income for services provided to foreign clients may not be subject to Georgian taxation even though you're reporting it through your IE. However, if you obtain Georgian residence and become a Georgian tax resident, the analysis becomes more complex. Tax matters require proper planning and potentially professional advice to ensure compliance with both Georgian law and your home country's tax obligations.

If you're maintaining IE status without residency, the ongoing obligation is minimal: file monthly tax declarations on time and maintain your IE registration by not actively deregistering. If you're maintaining IE-based residency, the obligations increase: continue filing monthly tax declarations, maintain annual turnover at or above GEL 50,000 to support residency renewal, keep sufficient bank balances, maintain secured housing documentation, and renew your residence permit annually by demonstrating continued IE activity and turnover. Many foreign IE holders set calendar reminders for their monthly tax filing deadline and complete the process in minutes each month.

LLC Pathway - Two Distinct Routes

Limited Liability Companies in Georgia provide the basis for residency through two completely separate programs that are often confused. Understanding which route you're pursuing is essential because the requirements differ dramatically. Most entrepreneurs and business owners use the standard work residence permit route, while the investment residence permit represents a premium option for wealthy investors seeking immediate long-term status.

LLC Work Residence Permit - Standard Business Route

The standard LLC work residence permit route requires no investment or minimum capital to form the company. You can incorporate a Georgian LLC through the online portal at napr.gov.ge or through notaries and service providers for approximately 100 GEL ($37). Choose your company name, prepare basic formation documents, designate directors and shareholders, and receive company registration within 24 hours typically. Foreign investors can own 100% of Georgian LLCs without requiring Georgian partners or minimum capital contributions.

To obtain work residence permit based on your LLC, the company must demonstrate annual turnover of at least GEL 50,000 (approximately $18,500 USD) for each foreigner (director, shareholder, or employee) seeking residency through the company. This turnover requirement applies whether you're the sole owner-director or one of multiple foreign stakeholders. If your LLC has three foreigners seeking residency, the company needs GEL 150,000 annual turnover total. The turnover is measured over the 12-month period preceding your residence application and must be documented through official sources.

Additionally, you must have an employment contract or appointment as director with the company for minimum six months duration, receive monthly salary of at least GEL 1,000-1,200 (approximately $370-440 USD, representing five times the subsistence minimum in Georgia), maintain personal bank balance of approximately GEL 15,000 (about $5,500 USD) when applying, and have secured housing in Georgia through rental agreement, property ownership, or hosting arrangement. The residence permit is initially granted for one year and renewed annually as long as you maintain these requirements.

This pathway suits entrepreneurs building actual businesses in Georgia, remote workers forming companies to operate through, consultants and service providers creating corporate structures, business owners who need to hire employees (which IEs cannot do), and partnerships or multi-owner ventures requiring formal corporate governance. The key advantage over IE status is the ability to hire employees, have multiple shareholders, present more professional corporate structure, and operate without the GEL 500,000 revenue ceiling that triggers higher IE tax rates.

Investment Residence Permit - Premium Route ($300,000)

The investment residence permit represents a completely separate program designed for wealthy investors making substantial capital commitments to Georgia. This route requires demonstrating investment of minimum $300,000 USD in your Georgian company or Georgian economy. The investment can take various forms: purchasing property in the company's name, making capital contributions to the company, providing documented loans to the company, maintaining substantial term deposits in company accounts, or other verifiable investments approved by Georgian authorities. The investment must be confirmed through certified audit by licensed Georgian auditors.

The major advantage of this route is receiving an initial five-year residence permit immediately rather than annual renewals. However, maintaining this status requires meeting substantial ongoing turnover obligations: minimum $50,000 USD annual turnover in year one, minimum $100,000 USD in year two, and minimum $120,000 USD annually in years three, four, and five. These requirements ensure the investment generates meaningful economic activity rather than serving purely as residency mechanism. After successfully maintaining investment and turnover for five years, you become eligible for permanent residence, providing faster track than standard temporary residence pathways.

This pathway suits wealthy individuals with substantial capital to deploy, established businesses planning significant Georgian operations with reliable revenue streams, investors seeking to combine property investment with business operations, and those prioritizing immediate long-term residence status over cost minimization. The $300,000 investment requirement and escalating turnover obligations make this unsuitable for most entrepreneurs, freelancers, or small-scale operators who should pursue the standard LLC work permit route instead.

Critical Distinction - Don't Confuse These Routes

Many sources and advisors conflate these two programs, creating dangerous confusion. When someone says "LLC residency requires $300,000," they're referring specifically to the investment residence permit, not the standard work permit route. Most entrepreneurs, remote workers, and business owners pursue the work residence permit requiring only GEL 50,000 company turnover plus salary requirements – no $300,000 investment needed. The investment residence permit is an optional premium route for those with substantial capital seeking immediate long-term status.

Choose based on your actual financial capacity and business trajectory. If you're building a real business that can generate GEL 50,000+ annual revenue and you need corporate structure or employees, the standard LLC work permit makes perfect sense with minimal capital requirements. If you're a wealthy investor with $300,000+ to deploy and need immediate 5-year residence, the investment permit provides fast-track access. Don't let misconceptions about $300,000 requirements deter you from the standard business route that's accessible to most entrepreneurs.

LLC Tax Obligations and Compliance

Georgia uses the Estonian model for corporate taxation, which means LLCs pay 15% tax only when distributing profits to shareholders through dividends. Retained earnings that remain in the company are completely tax-free, regardless of amount. This applies to both standard work permit LLCs and investment residence permit LLCs – the tax treatment is identical regardless of which residency route you're pursuing. This creates powerful cash flow advantages and incentivizes reinvestment in business growth rather than profit extraction.

In practice, this means a company can earn revenue, pay expenses, and retain profits without any corporate tax liability. Only when shareholders want to extract money as dividends does the 15% tax apply. Salaries paid to directors or employees are handled differently – they're deductible business expenses for the company and subject to personal income tax for the recipient at standard rates. Directors receiving the minimum GEL 1,000-1,200 monthly salary required for work residence permits pay personal income tax on this employment income.

LLCs must file annual financial statements and tax declarations regardless of which residency pathway they support. This requires more administrative work than IE status with its simple monthly filings. Most companies hire accountants to handle financial reporting, bookkeeping, and tax compliance. Accounting costs in Georgia are reasonable – monthly accounting services typically cost 150-400 GEL ($55-150) depending on transaction volume and complexity. Companies pursuing investment residence permits face additional audit requirements to document the $300,000 investment and verify annual turnover thresholds.

Comparing IE vs LLC for Residency

The choice between IE-based and LLC-based work residence permits depends on your business needs rather than financial capacity, since both require the same GEL 50,000 annual turnover threshold. IE suits solo operators without employees, simple service-based businesses, those wanting absolute simplicity with 1% tax and five-minute monthly filings, and businesses staying under GEL 500,000 annual revenue. The main limitations are inability to hire employees and less professional corporate appearance for some business contexts.

LLC work permit suits businesses needing to hire employees (IEs cannot have employees), partnerships or multi-owner structures, operations requiring formal corporate governance, businesses with revenue approaching or exceeding GEL 500,000 annually, and contexts where corporate structure enhances credibility with clients or partners. The trade-off is more administrative complexity with annual financial statements, accounting requirements, and potentially higher costs for professional services, but the 0% tax on retained earnings can offset this for profitable businesses reinvesting earnings.

For most digital nomads, remote workers, freelancers, and consultants operating alone, IE-based residency represents the optimal pathway. Build your business to GEL 50,000 annual turnover, then apply for residency based on demonstrated IE activity. For businesses needing employees, corporate structure, or partnership arrangements, form an LLC, build to GEL 50,000 turnover, ensure you're receiving the required salary, then apply for work residence permit. Both routes are accessible with similar financial thresholds – choose based on your actual business structure needs.

The investment residence permit requiring $300,000 represents a completely different category suitable only for wealthy investors or established businesses with substantial capital and reliable high revenue. This is not a choice between "IE or LLC for residency" but rather a premium option for those with significant resources seeking immediate long-term status. Most entrepreneurs should ignore this route and focus on the accessible IE or LLC work permit pathways requiring only GEL 50,000 turnover.

Virtual Zone Status for IT Companies

Georgian companies in qualifying IT activities can apply for Virtual Zone status, which provides 0% corporate income tax and 5% personal income tax for employees and contractors. This creates one of the world's most favorable tax environments for technology businesses. Virtual Zone companies must be engaged in software development, digital services, or related technology activities.

Virtual Zone status can support residency applications for company directors, shareholders, and employees. If you're forming or joining an IT company in Georgia, investigating Virtual Zone eligibility makes sense. The tax savings can be substantial, particularly for higher-revenue operations or companies with multiple employees. Our dedicated IT and Virtual Zone pages provide detailed information about qualifying for and operating under this beneficial regime.

Permitted Activities with Business-Based Residency

Residence permit based on business activity provides the same comprehensive rights as other residency pathways. You can live in Georgia indefinitely with annual renewals, freely enter and exit the country, open and maintain bank accounts with full banking access, purchase property without restrictions, work in your business and potentially other employment, access healthcare services, and pursue education if desired.

The business forming your residency basis must remain active. For IEs, this means maintaining registration and filing monthly declarations. For LLCs, this means keeping the company registered, filing required reports, and maintaining your director or shareholder position. If you deregister your IE or dissolve your company without establishing new residency basis, you lose the foundation for residency and your permit will not be renewed.

Annual Renewal Process

Business-based residence permits are initially granted for one year and must be renewed annually. The renewal process requires proof of active business status through current IE registration certificate or company extract, tax compliance showing you've filed required declarations, valid passport, payment of renewal fee around 100 GEL ($37), and updated biometric data collection.

Processing takes three to seven working days typically. The renewal can be submitted before your current permit expires, and many residents establish an annual routine. As long as your business remains active and compliant, renewal should be straightforward. Immigration authorities verify your business status through integrated government databases, making the process efficient.

Permanent Residency After Five Years

After five years of continuous temporary residence, you become eligible for permanent residence. Requirements include maintaining legal residence for five years without extended absences exceeding 90 consecutive days, continued active business status, clean criminal record, and potentially basic Georgian language knowledge depending on implementation of language requirements.

Permanent residence eliminates annual renewal requirements and provides stronger legal status. Many business operators maintain their IE or company even after obtaining permanent residence, continuing their operations and tax compliance. Permanent residence doesn't require maintaining the original business basis – you can close your IE or company after obtaining permanent status – though most residents keep their businesses active as they're actually operating real businesses, not just maintaining residency bases.

Practical Considerations and Common Questions

Many people wonder whether they need legitimate business operations or can register IE purely for residency. Technically, IE status requires intending to engage in business activity. In practice, authorities don't scrutinize actual business operations heavily as long as you file tax declarations and maintain registration. However, you should have at least plausible business purpose – freelancing, consulting, online services, or other activities you could legitimately conduct as an IE.

Some residents earn all their income from foreign clients and report zero revenue in Georgia, treating their IE as dormant for Georgian tax purposes while their foreign earnings aren't considered Georgian-source income. Others report all or some revenue through their IE and pay the 1% tax. The correct approach depends on your specific situation, income sources, and tax residency status. Consulting with Georgian tax advisors helps ensure proper compliance.

Banking relationships sometimes require showing business activity if you're receiving significant income through Georgian accounts. Banks want to understand the source and purpose of funds. Having active IE or company status helps establish legitimacy for business banking activities. Many residents maintain business bank accounts separate from personal accounts.

Who Should Choose This Pathway?

The business activity pathway is ideal for digital nomads and remote workers, freelancers and consultants, online business owners, e-commerce entrepreneurs, software developers, content creators and influencers, coaches and trainers, and anyone conducting location-independent business. The minimal costs, simple process, low tax burden, and flexibility make it the default choice for most foreign residents who don't have $100,000+ to invest in property.

Even if you plan to eventually purchase property for investment purposes, starting with IE-based residency allows you to establish legal status immediately while taking time to understand the property market and find the right investment. You can transition from business-based to property-based residency later if desired, or maintain business residency indefinitely if it suits your situation.

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