What is the Georgian Virtual Zone?

To stimulate growth in its IT sector and attract foreign investment, the Georgian government has introduced the Virtual Zone (VZ) status. This special designation allows IT-related Limited Liability Companies (LLCs) to benefit from significant tax advantages.

Holding a Virtual Zone license enables businesses to develop and distribute IT products and software services globally while enjoying a tax-free operational environment.

Key Tax Advantages:

✅ 0% Corporate Income Tax

✅ 0% VAT on services provided internationally

✅ 5% Tax on Dividends

The primary requirement: Your IT services must be exclusively sold to non-Georgian clients (foreign individuals and companies).

Understanding Virtual Zone Status

According to Georgian legislation, a Virtual Zone Company must engage in activities such as:

• Software development, research, and implementation

• IT product creation and deployment

• Design and support of information systems

• Development of innovative technology solutions

Crucially, all or part of the development work must take place in Georgia.

Exclusive Tax Benefits of a Virtual Zone Company in Georgia

Unlike standard companies that pay 15% corporate tax, VZ Companies enjoy a 0% corporate tax rate when serving foreign clients.

💡 Note: If a Virtual Zone Company generates income from Georgian clients, it will be subject to 15% Corporate Tax and 18% VAT on that revenue.

1. Corporate Income Tax: 0%

Virtual Zone Companies are exempt from VAT on their business income. However, you may choose to register as a VAT payer with Georgia’s Revenue Service to reclaim 18% VAT paid on eligible purchases.

2. VAT: 0%

There are no customs duties when exporting IT products outside of Georgia.

3. Export Tax: 0%

4. Dividends Tax: 5%

Distributed dividends are taxed at a flat 5% rate, whether the recipient is an individual or a legal entity, resident or non-resident.

💡 Dividends that are not distributed remain untaxed.

For non-resident shareholders, it’s crucial to consider their home country’s tax treaties with Georgia to avoid double taxation.

Managing Your Virtual Zone Company

• Director: The company director can be either a Georgian citizen or a foreign national, residing in Georgia or abroad.

• Remote Management: You can operate your Virtual Zone Company from anywhere in the world.

• Flexible Staffing: Employees can work remotely from any country.

💡 If you hire Georgian-based employees, their salaries will be subject to:

• 20% Personal Income Tax

• 4% Social Security Contributions

How to Apply for Virtual Zone Status in Georgia

The process to register your Virtual Zone Company is straightforward but requires careful preparation:

✔Register Your Business: Establish an LLC in Georgia (2 working days).

✔Register with Revenue Service: Register your LLC for taxation (1 working day).

✔Apply for Virtual Zone Status: Submit your application to the Ministry of Finance (Processing time: 30-45 days).

💡 During the application process, you may need to provide additional documentation, including business model details, proof of operations, and employee contracts.

Remote Registration & Business Banking Solutions

Want to establish your Virtual Zone Company remotely? No problem!

✅ With a Power of Attorney (PoA), we can handle the entire company registration process on your behalf – no need to travel to Georgia.

✅ We also offer remote business bank account opening services, allowing you to set up a corporate account in Georgia without being physically present.

How We Can Help You

Setting up an LLC in Georgia is easy, but obtaining Virtual Zone Status requires expertise. Many applications are rejected due to administrative errors or incomplete documentation—especially if you don’t speak Georgian.

At Kartvelite, we simplify the process, ensuring your application is correctly prepared and increasing your chances of approval. Our services include:

• Full Business Registration Assistance

• Virtual Zone Application Handling

• Ongoing Administrative Support

• Tax & Compliance Advisory

Book a Phone Call Today!

Let’s discuss your business plans and ensure you meet all Virtual Zone requirements.

Contact us today—we’re happy to help!