Individual Entrepreneur (IE) + Small Business Status (SBS) in Georgia
- Tinatin Tolordava
- Mar 28
- 12 min read
Introduction
Looking to lower your tax bill without setting up an offshore company?
If you work alone, whether as a freelancer, consultant, or remote employee, registering as an Individual Entrepreneur (IE) with Small Business Status (SBS) in Georgia is one of the simplest and most tax-friendly ways to do it.
You’ll pay just 1% income tax on your revenue. No dividend tax. No corporate overhead. No local partner needed.
The setup process is fast. With the proper documents, you can register your business and apply for SBS in just a few days, whether you're a Georgian citizen or a foreigner relocating to Tbilisi.
Why this matters
Georgia offers one of Europe and Central Asia's most attractive solo business environments. This structure wins on simplicity, transparency, and access when comparing business registration in Georgia to other low-tax jurisdictions.
It’s built for:
Self-employed professionals
Solo founders
Remote workers serving foreign clients
Digital nomads seeking legal residency + tax efficiency
You don’t need a Georgian LLC. You don’t need employees. You just need to register your Individual Entrepreneur status, apply for Small Business Status at the Revenue Service of Georgia, and start working legally.
What Is an Individual Entrepreneur in Georgia?
An Individual Entrepreneur (IE) is Georgia’s simplest business structure. It’s designed for solo professionals who want to operate legally, pay minimal tax, and avoid the complexity of setting up a limited liability company (LLC).
When you register as an Individual Entrepreneur, you’re doing business under your name. You don’t need partners, shareholders, or startup capital. With a tax ID and a short registration process, you're legally allowed to invoice clients and earn income locally or abroad.
Legal structure: how it works
The IE structure is a sole proprietorship. Legally, there’s no distinction between you and your business. You’re taxed as an individual, not as a separate legal entity.
Here’s what that means in practice:
You register once with the Revenue Service of Georgia
You report your business income annually.
You can apply for Small Business Status (SBS) and qualify for 1% income tax in Georgia on revenue up to 500,000 GEL.
If you qualify for SBS, there is no corporate tax, dividend tax, or complex reporting; just simple turnover-based taxation.
Who should register as an IE?
The IE model is ideal if you:
Work alone and provide services (freelance, consulting, digital work)
Get paid by foreign or local clients.
Want to formalize your income and reduce your tax rate.
You must show your legal business status for bank accounts, visas, or contracts.
It’s especially popular among:
Freelancers relocating to Georgia
Remote workers earning income from abroad
One-person tech or creative businesses
Georgian citizens doing contract-based work
This isn't the right fit if you're running a team, raising capital, or handling investor funds. But if you're self-employed and under the 500,000 GEL threshold, small business registration in Georgia as an IE gives you a clean, legal, low-cost setup.
What about liability?
Registering as an Individual Entrepreneur in Georgia means no legal separation between you and your business. You operate as a sole proprietor, which means you’re personally liable for any debts, penalties, or client disputes tied to your activity.
Your assets can be at risk if something goes wrong, such as unpaid invoices, breach of contract, or financial claims. This is the main difference between an IE and a limited liability company (LLC), where the business absorbs the legal responsibility. Still, the risk is low for most freelancers, consultants, and remote workers earning under the small business registration Georgia income cap. You’re not managing large transactions or high-risk operations.
And the trade-off is clear: you gain a simple legal structure, fast business registration in Georgia, and access to the 1% tax in Georgia under Small Business Status, one of the most attractive tax setups for solo professionals in the region.
How to Register as an Individual Entrepreneur in Georgia
Registering as an Individual Entrepreneur in Georgia is one of the fastest ways to legally set up a solo business. No local partner required. No complex paperwork. And once you're registered, you can apply for Small Business Status and qualify for Georgia’s 1% tax rate on turnover.
Here’s what you need to register your IE status in Georgia:
1. Valid passport or ID
Bring your passport if you're a foreigner starting a business in Georgia. To complete the registration, you'll also need a notarized Georgian translation of your passport. This can be done at any notary office in Tbilisi or other major cities.
2. Georgian address
You’ll need a local address to register your business. This doesn’t have to be a physical office, many freelancers and remote workers use a virtual office service or a residential rental. The address will appear on your registration certificate and is required for both the Public Service Hall and Revenue Service processes.
3. Tax ID (Personal Number)
This is your unique taxpayer ID for legal and tax reporting in Georgia. If you don’t have one yet, you’ll be assigned a personal number when you register at the Public Service Hall. It’s linked to your name and required to log in to RS.ge, the government’s online tax platform.
After you’ve completed the IE registration, the next step is to apply for Small Business Status in Georgia, which unlocks the 1% income tax rate.
What Is Small Business Status (SBS) in Georgia?
Once you register as an Individual Entrepreneur (IE), the next step is to apply for Small Business Status in Georgia. This makes Georgia one of the most tax-friendly countries in Europe for solo professionals.
SBS is a special tax regime for freelancers, consultants, and remote workers who operate alone and earn less than 500,000 GEL (around $185,000) annually. Under SBS, income is taxed at just 1% of gross turnover.
No income splitting.No corporate tax.No dividend tax.
Just a flat 1% - paid monthly through your online tax account on RS.ge.
Legal structure: how it works
When you hold Small Business Status in Georgia, your business remains a sole proprietorship under your IE registration. However, the tax treatment is different from that of standard individual taxation.
Here’s what that means in practice:
You remain personally liable for business obligations
You file your revenue monthly through the tax portal.
You pay 1% income tax in Georgia on revenue up to 500,000 GEL per calendar year.
If you exceed that limit, the rate increases to 3% on the excess amount.
You may lose SBS altogether if you exceed it for two years in a row.
This setup is ideal if you’re self-employed and work with foreign clients, especially in tech, consulting, design, or content services.
Who qualifies for SBS?
Not everyone with Individual Entrepreneur (IE) status in Georgia automatically qualifies for Small Business Status (SBS). After completing your business registration, you need to apply for it separately through the Revenue Service of Georgia.
To be eligible, you must be a registered Individual Entrepreneur, and your annual turnover must not exceed 500,000 GEL. This limit applies to total revenue, not profit, so tracking your income accurately throughout the year is essential.
Your earnings must come from approved service categories. SBS covers most freelancers, consultants, remote workers, and digital professionals. However, SBS excludes specific industries, including gambling, financial services, tobacco, alcohol sales, and similar high-risk or regulated activities.
If your application is approved, you’ll receive a Small Business certificate confirming your 1% tax status. This document is essential for many practical needs. It can help you open a business account in Georgia, prove legal income, and support visa or residency applications as a self-employed professional.
What are the benefits of SBS?
The tax benefits of Small Business Status in Georgia are among the most attractive for solo professionals, especially those working remotely or serving international clients. With SBS, your income is taxed at just 1% on total turnover, not profit. That means no complicated deductions or expense tracking, just a low, predictable tax rate.
No corporate income or dividend tax makes SBS especially appealing if you're a freelancer or consultant looking for a clean and transparent structure. You also won’t need to register for VAT in Georgia unless you earn more than 100,000 GEL (around $36,000) from Georgian clients. This means fewer filings and lower admin overhead for most remote workers.
Filing is simple. You log into RS.ge, report your income, and pay 1% of your monthly revenue. The application process for SBS in Georgia is also fast, most freelancers are approved within a few business days once their IE registration is complete.
To put it in perspective: if you earn 60,000 GEL per year, you’ll owe just 600 GEL in tax. No corporate structure. No high accounting fees. Just a straightforward way to keep more of what you earn while staying fully legal.
Is SBS right for you?
Suppose you work solo under Individual Entrepreneur (IE) status in Georgia. In that case, Small Business Status (SBS) is likely the most efficient setup available, especially if you want to reduce your tax burden while staying fully compliant.
SBS is designed for freelancers, consultants, remote workers, and digital nomads. Whether serving foreign clients from Georgia or doing contract work for local businesses, this structure allows you to legally report income while paying just 1% tax on turnover.
If you're searching for the lowest freelancer tax in Georgia, SBS delivers exactly that without needing a corporate entity, shareholders, or complex bookkeeping. You get a clean, government-approved status that works for invoicing, residency, and banking, with minimal red tape.
For solo professionals who want a simple legal structure, a low-cost tax setup, and full access to Georgia’s business system, registering as an IE with SBS is hard to beat.
Reporting Requirements Under Small Business Status (SBS)
Even with Georgia’s 1% tax rate under Small Business Status (SBS), you must follow basic tax reporting rules. The system is straightforward, but it’s important to stay compliant to maintain your status and avoid penalties.
As a registered Individual Entrepreneur (IE) with SBS in Georgia, you must submit a monthly turnover declaration through your online account at RS.ge. This is where you report the total revenue earned during the previous month.
The tax owed, just 1% of that amount, is calculated automatically and can be paid directly through the portal.
In addition to monthly filings, you’ll need to submit an annual income report. This is typically due in the first quarter of the following year and summarizes your total earnings for the calendar year. It’s a separate step from your monthly declarations, but just as important.
You’re also expected to keep simple income records, such as invoices, payment confirmations, or client contracts. While Georgia doesn’t require formal accounting for SBS holders, these records are useful if the Revenue Service of Georgia requests supporting documents.
You’re not legally required to work with an accountant to manage your tax filings in Georgia, but doing it all on your own isn’t always as simple as it sounds. The RS.ge portal is only partially translated, forms can be confusing, and communication with the Revenue Service of Georgia often requires Georgian language support.
That’s why many freelancers and remote workers choose to work with a local assistant or tax partner like Gegidze. Our team handles the entire process from registration to monthly reporting, so you don’t miss a deadline or file incorrectly. We speak the language, understand the system, and can step in quickly if the Revenue Service flags your account or requests additional documentation.
If you're serious about keeping your 1% tax status in Georgia and want to avoid headaches, having a reliable local point of contact isn’t just helpful - it’s smart.
Common Mistakes to Avoid with IE + SBS in Georgia
Registering as an Individual Entrepreneur (IE) and applying for Small Business Status (SBS) in Georgia is fast, low-cost, and beginner-friendly. However, it’s still a legal and tax setup, and mistakes can lead to unexpected costs or even losing your SBS benefits.
If you're a freelancer, remote worker, or digital nomad planning to take advantage of Georgia’s 1% tax rate, here are the most common pitfalls to avoid:
1. Exceeding the 500,000 GEL income cap
This is the most critical limit under Small Business Status in Georgia.
If your annual turnover exceeds 500,000 GEL, the excess is taxed at 3%.
If you cross that threshold two years in a row, you lose SBS entirely and are reclassified under the general tax regime.
Keep a close eye on your annual earnings, especially if you’re billing clients in foreign currencies. Currency fluctuations can push you over the cap without warning.
2. Mixing business and personal income
Georgia treats your IE as a sole proprietorship, so letting personal and business finances blur together is easy. Don’t.
Use a separate bank account for business transactions.
Always issue proper invoices to clients.
Track income in a way that matches your monthly RS. ge filings
Poor documentation can lead to rejected filings or tax audits, weakening your legal position if you ever need proof of income for a visa, residency, or bank loan.
3. Thinking it's anonymous
Some digital nomads assume that doing business as an Individual Entrepreneur in Georgia offers privacy. That’s not the case.
Your business registration is public.
Income is reported through a government tax portal.
You may be asked to provide documentation for international payments or tax treaties.
Georgia is known for its transparency and legal clarity, not anonymity. This isn't the right setup if you’re looking for secrecy or low-profile tax shelters.
Bottom line?
IE + SBS in Georgia is a powerful tool for freelancers and remote professionals, but only if you treat it like a real business. Understand the limits, report correctly, and keep your finances clean.
Is IE + SBS in Georgia Right for You?
Choosing how to structure your business isn’t just about saving money on taxes; it’s about how you want to work, where your clients are, and what kind of flexibility and protection you need. Georgia’s Individual Entrepreneur (IE) model, paired with Small Business Status (SBS), is one of the simplest and most accessible setups for solo professionals. However, it’s not a one-size-fits-all solution.
Let’s break down when this structure makes sense and when it might not.
Why IE + SBS works for most solo professionals
Suppose you work independently, whether as a freelancer, remote consultant, software developer, designer, or digital marketer, this setup offers a lot of upside. You're taxed at just 1% on turnover, can register quickly, and don't need to deal with shareholders, capital requirements, or complicated accounting.
Georgia’s Small Business Status tax system is especially attractive if you're used to paying high freelance taxes elsewhere. In many countries, freelancers pay progressive income tax, VAT, and self-employment contributions. Here, it's just 1%.
Another plus? The system is transparent. You’re operating legally, reporting to the Revenue Service of Georgia, and maintaining good standing without hiding money or navigating offshore loopholes. If you plan to live in Georgia long-term or apply for legal residency, that's a big win.
When it’s not the right fit
That said, the Individual Entrepreneur structure in Georgia comes with limitations. There’s no legal separation between you and your business, which means your personal assets could be at risk if you’re sued, fined, or fall into debt. That’s usually not a concern for low-risk freelancers, but it matters if your work involves large contracts, financial liability, or regulated industries.
In those cases, you’re better off forming a Georgian LLC (Limited Liability Company). Yes, it’s more complex and may carry higher taxes, but you get legal protection, more credibility for large clients, and a structure that supports scaling.
A reality check before you register
Think about your business not just as it is today, but where it’s going. If you’re a solo professional planning to keep things lean, serve clients remotely, and live or base yourself in Georgia, IE + SBS is probably the smartest move you can make. It’s fast, legal, and ridiculously tax-friendly.
But if you’re aiming to build a company, hire a team, or navigate international investment, it might be time to think bigger.
Not sure where you fit? Talk to Gegidze and we’ll help you make the right call.
How Gegidze Can Help You Register Your IE and Apply for SBS in Georgia
Setting up your business in Georgia shouldn’t feel like guesswork. At Gegidze, we work with freelancers, remote workers, and digital entrepreneurs daily, people like you, who want a fast, clean, and tax-efficient way to go legit.
We don’t just point to government websites or hand you a checklist. We walk you through every step of the IE and SBS registration process, ensuring nothing gets lost in translation.
You don’t need to figure it all out on your own. We’re based here, speak the language, and know the system inside and out.
No delays. No hidden steps. Just clear, reliable help from day one.
Book a free consultation with Gegidze, and we’ll show you exactly how to get started quickly, simply, and fully compliant.
Frequently Asked Questions (FAQ)
What is the tax rate for Individual Entrepreneurs with Small Business Status in Georgia?
If approved for Small Business Status, you pay just 1% tax on annual turnover up to 500,000 GEL (around $183,000). No corporate or dividend tax applies.
Who can register as an Individual Entrepreneur in Georgia?
How long does it take to register as an IE and apply for SBS in Georgia?
What documents are needed to register as an IE in Georgia?
What happens if I exceed the 500,000 GEL SBS income limit?