Georgia offers a range of special tax regimes designed to attract foreign investment, support export-oriented activities, and promote the development of specific sectors such as IT, logistics, and financial services. These regimes provide preferential tax treatment, including reduced tax rates, exemptions from corporate income tax, VAT benefits, and simplified compliance requirements.
Each status is tailored to particular types of business activities and comes with its own eligibility criteria and tax implications. Proper selection and structuring are essential in order to fully benefit from the available incentives and ensure compliance with Georgian legislation.
Virtual Zone Person
The status is available exclusively to legal entities, such as LLCs, registered in Georgia. Eligible companies must be engaged in information technology activities, which, under the Georgian Tax Code, include the research, development, support, implementation, and production of IT systems and software products.
The primary benefit of Virtual Zone Person status is the complete exemption from corporate income tax on profits derived from the export of qualified software or digital services. This means that your company can retain 100% of its pre-distribution profits, provided the services are rendered from Georgia to clients who are non-residents of Georgia.
Another major efficiency arises from Georgia’s Estonian-style corporate tax model, under which profits are only taxed when they are distributed. While Virtual Zone Person companies are exempt from corporate income tax, they are still subject to a 5% dividend tax when profits are paid out to shareholders. Until such distribution occurs, retained earnings remain untaxed, allowing businesses to reinvest profits into growth without immediate tax consequences. On top of this, under Georgia’s extensive network of double taxation treaties, the 5% dividend tax rate may be reduced to 0% in many cases.
Under Georgia’s B2B VAT rules, services supplied to non-resident clients are generally treated as outside the scope of Georgian VAT, meaning they are effectively zero-rated.
International Company Status
The status is for IT companies that provide qualifying software services to non-residents and shipping/logistics businesses.
Businesses granted International Company Status enjoy some of the most competitive tax rates in the region. The tax incentives include:
- Corporate Income Tax (CIT): 5% (instead of 15%) (applied only upon profit distribution, as per Georgia’s Estonian-style tax system);
- Personal Income Tax (PIT) on Salaries: 5% (instead of 20%) for employees working for the international company;
- Withholding Tax (WHT) on Dividends: 0% on dividends distributed by an international company are exempt from withholding tax and are not included in the recipient’s gross income;
- Property Tax: 0% on property (excluding land tax) used for permitted business activities.
In particular, the following expenses, when incurred within Georgia and properly documented, can reduce the amount of profit subject to the 5% corporate income tax upon distribution:
- Salaries paid to Georgian citizen resident employees directly employed by the international company;
- Costs related to scientific research, design, and experimental-construction services that are directly connected to the company’s permitted activities.
It is important to note, that the preferential tax regime applies provided the main income-generating activities are performed from the territory of Georgia. For IT purposes, this means that the core IT staff creating the services shall be working from the territory of Georgia.
Special Trading Company
The Special Trading Company (STC) regime in Georgia is designed for businesses engaged in international trading activities, including intermediary traders, logistics, and distribution companies. It applies to foreign-source trading operations such as re-exports and resale of goods abroad, where goods are purchased outside Georgia and sold outside the country, using customs warehouses in Georgia for storage and handling.
Under this regime, profits from qualifying foreign-source trading activities are exempt from Corporate Income Tax, while VAT does not apply to goods purchased abroad and resold outside Georgia. Goods placed in a customs warehouse for re-export are not subject to import duties or VAT. Dividends are generally subject to a 5% withholding tax, which may be reduced under Georgia’s double tax treaty network.
Free Industrial Zone (FIZ) Enterprise
The Free Industrial Zone (FIZ) Enterprise regime in Georgia is designed for companies engaged in export-oriented and international trade activities. It is best suited for businesses that manufacture goods for export or re-export (including processing of imported goods), as well as companies providing international trade-related services such as logistics, warehousing, and distribution.
Under the FIZ regime, qualifying activities enjoy broad tax exemptions. FIZ enterprises are fully exempt from Corporate Income Tax and dividend withholding tax, and there are no restrictions on the repatriation of profits, allowing eligible income to be earned and distributed tax-free. The import of foreign goods into a FIZ, as well as transactions carried out within the zone, are exempt from VAT and import duties, while property located within a FIZ is exempt from property tax. Instead, a simplified charge applies, under which FIZ enterprises pay 4% of revenue derived from the supply of goods. Eligible activities generally include the importation, storage, handling, processing, and re-export of goods to foreign market
You can learn more about the tax benefits, eligibility criteria, and full legal framework of this regime in our detailed guide on Free Industrial Zones in Georgia.
Investment Funds/Companies
Under the Law of Georgia on Investment Funds, an investment company is a collective investment vehicle with legal personality, typically established as a joint stock company or limited liability company. Unlike common (contractual) investment funds, an investment company manages its own portfolio rather than appointing a separate licensed asset manager – although it may do so if desired.
The NBG exercises supervisory oversight over both authorized and registered investment companies. This includes approval of constitutional documents, review of offering materials, and ongoing prudential and conduct supervision. The regime accommodates both open-end and closed-end structures and permits umbrella formations with segregated sub-funds, enabling structuring flexibility for multi-strategy platforms.
Capital Gains Tax on Investment Fund Units
Capital gains arising from the sale or redemption of units in an investment fund are generally taxed at 15%, with a reduced rate of 5% applying where the fund invests exclusively in bank deposits and financial instruments (excluding equity investments in Georgian resident companies). Capital gains are fully exempt from both personal income tax and profit tax where the units are sold through a public offering in Georgia and traded on a regulated market recognized by the National Bank of Georgia, or where the fund’s portfolio consists solely of qualifying instruments such as government securities, bank deposits, or publicly offered debt instruments issued by resident entities.
Tax Treatment of Investment Companies in Georgia
Investment companies benefit from preferential tax treatment under the Estonian-style CIT regime, whereby Corporate Income Tax is imposed only upon profit distribution and retained earnings remain untaxed. Dividends paid by an investment company are not subject to withholding tax and are not included in the gross income of the recipient. Distributed profits are generally taxed at 15%, with a reduced 5% rate applying where investments are limited to bank deposits and/or financial instruments (excluding dividends from Georgian resident companies), while full exemption applies where the underlying income is not Georgian-source income, is derived from publicly offered securities listed on markets recognized by the National Bank of Georgia, or originates from government bonds, international financial institution securities, or deposits in Georgian banks.
You can find a more detailed explanation of how investment companies and funds are taxed in Georgia, including profit distribution rules and exemptions, in our dedicated guide on investment funds taxation in Georgia.
Value Added Tax
Services related to investment funds, including management, administration, and depositary services, are classified as financial services and are exempt from Value Added Tax under the Georgian Tax Code.
Disclaimer: This article is based on Georgian legislation and public information as of April 2026 and is intended for informational purposes only. It does not constitute legal or tax advice.