Estonian Corporate Tax Model — Georgia
Since 2017 Georgia applies Estonian corporate tax model: undistributed company profits taxed at 0%, tax of 15% charged only upon dividend distribution. This stimulates reinvestment and business growth. One of most competitive systems in region.
Estonian Corporate Tax Model
Since 2017 Georgia applies Estonian corporate tax model: undistributed company profits taxed at 0%, tax of 15% charged only upon dividend distribution. This stimulates reinvestment and business growth. One of most competitive systems in region.
Model Benefits
Companies pay 0% tax on undistributed profits. Can reinvest all profit without taxes. Tax of 15% only when paying dividends.
When company distributes dividends, pays 15% corporate tax. Plus 5% tax for individual recipient. Total 19.25% vs usual 35%+ in Europe.
Innovative startups can get status with 5% corporate tax instead of 15% for first 10 years. Plus employee income tax exemption first years.
International IT companies pay 5% corporate tax instead of 15%. Employee salary tax — 5% instead of 20%. Very attractive for IT sector.
Practical Application
Can defer taxation for years or decades, reinvesting profits. No time limit. Ideal for business growth.
Company asset revaluation not taxed. Increase in property or investment value doesn't create taxable event until distribution.
When selling company, rules are more complex. For resident individuals, selling shares of Georgian company may be taxed, foreign — not. Details depend on structure.
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Territorial Tax System
Georgia applies territorial tax principle for individuals — this is the country's key advantage. Tax residents pay 20% tax only on Georgian-source income. Foreign income (dividends, interest, cryptocurrency, salary from foreign companies) is not taxed. Makes Georgia ideal for digital nomads and international investors.
02Small Business Status (1% Tax)
One of Georgia's main advantages — small business status with just 1% tax on turnover. Available to individual entrepreneurs with annual turnover up to 500,000 lari (~$165,000). When limit exceeded, rate increases to 3%. No complex reports, simple system. Ideal for freelancers, consultants, digital nomads.
03Cryptocurrency: Tax Haven (0% Tax)
Georgia is one of the world's best crypto havens. Individual income from crypto trading completely tax-exempt. Ministry of Finance officially confirmed: cryptocurrency not tied to geographical location, so not considered Georgian income. Applies to buying, selling, exchanging, holding. Crypto mining also developed thanks to cheap electricity.
04Tax Calculation Example
Consider two scenarios: employee and freelancer with small business status. Georgia has no social contributions, so effective tax burden is lower than in most European countries. Simple and transparent system.
05Digital Nomad Visa
Georgia offers 'Remotely from Georgia' program for remote workers, plus visa-free access for citizens of 95+ countries for 365 days. Low cost of living, visa-free regime, territorial taxation make Georgia top destination for digital nomads. Tbilisi and Batumi are community hubs.