Georgia Virtual Zone as an opportunity for IT entrepreneurs

The Georgia Virtual Zone is an attractive opportunity for IT entrepreneurs focused on the international market. Due to zero corporate tax and VAT rates on exports of IT services, simplified registration and administration procedures, no residency requirements and the possibility of remote business operations, Georgia is becoming an increasingly popular destination for IT companies of various sizes.

For potential entrepreneurs considering Georgia for their IT business, it is important to keep a few key points in mind. First of all, it is necessary to make sure that the main activity of the company is related to software development or the provision of closely related IT services. The key condition for obtaining tax advantages is to focus on foreign clients and generate income from them. Registration of a legal entity in Georgia, usually in the form of an LLC, is a mandatory step. When applying to the Financial Analytical Service, it is necessary to prepare a full package of documents confirming IT activities and the existence of international contracts.

It should also be taken into account that in recent years there has been a tendency to strengthen the requirements for economic presence in Georgia, so the presence of an office and, especially, employment of local IT specialists can significantly increase the chances of approval of the application and obtaining full tax benefits. When planning activities, it is necessary to take into account the 5% tax on dividends when paying them to non-residents and consider the possibilities of optimizing the distribution of profits in accordance with the legislation.

Comparing Georgia’s virtual zone with similar programs in Estonia and Lithuania, it can be noted that each country offers its own unique advantages. Georgia stands out with zero income tax and VAT rates for export IT services, as well as ease of registration. Lithuania offers temporary tax vacations and incentives in its FEZs, and Estonia is known for its developed digital infrastructure. The choice of jurisdiction will depend on the specific needs and priorities of the IT entrepreneur.

Overall, the Georgia Virtual Zone represents an attractive and competitive opportunity for IT entrepreneurs seeking to optimize taxation and develop their business internationally in a country with a favorable business climate. It is recommended to thoroughly study all the requirements and conditions of the program and consult with lawyers and tax consultants experienced in working with Georgian legislation in order to take full advantage of the benefits provided.