A Freelancer’s First Year in Georgia: Registration, 1% Status and the Rules Afterward

RIGHTSIDE INSIGHTS · FREELANCER SETUP · 2026

Georgia can be straightforward for an independent professional, but an entrepreneur registration is only the first step. The useful plan connects the right activity, the right status and a reporting routine that lasts.

Three doors, not one

First, a person may register as an individual entrepreneur through the public registry. Second, they separately apply to the Revenue Service for small-business status if their activity qualifies. Third, they run the activity and meet ongoing tax duties. A registration extract does not itself grant 1% treatment. The small-business rate begins under the Code’s status-effective rule, and income from an earlier period can have another tax treatment.

Who can use the 1% regime?

The regime is for an entrepreneur natural person with approved status and qualifying business income. It is not limited to Georgian citizens, and foreign clients are not a bar. Yet some activities are prohibited for the status; others may be carried on but their income is excluded from the preferential base and taxed under ordinary rules. Consulting—including tax consulting—legal, medical, architectural, notarial and audit services need particular attention under the government’s list. Employment salary is outside the regime even when a worker invoices one company.

Ask what you actually deliver. A software developer writing code, a strategic adviser giving recommendations and an employee following a manager’s instructions are not the same tax case, even if each works at a laptop. Contracts, deliverables, independence, tools, client mix and commercial risk should support the classification.

The rate and the ceiling

For qualifying income, the rate is generally 1% of gross small-business income, not 1% of profit after expenses. If annual gross income exceeds GEL 500,000, the Code applies 3% from the beginning of the month in which the limit is crossed through the end of that tax year. Exceeding the threshold in two consecutive calendar years can terminate the status. Count turnover consistently across clients and currencies. A growing freelancer needs a forecast before the first large invoice, not after year-end.

VAT can appear before the small-business ceiling

VAT has its own threshold and place-of-supply rules. Taxable transactions above GEL 100,000 over any consecutive 12 months generally trigger a registration review. A service to a foreign customer may be outside the Georgian place of supply under specific rules, but the customer’s foreign address alone is not an automatic exemption. Evaluate each service and destination. A freelancer can retain small-business status while also having a VAT obligation.

One country cannot settle all tax obligations

A foreign freelancer can use Georgian entrepreneur status without automatically becoming a Georgian tax resident. Conversely, the country of citizenship, former residence or client location may still claim tax under its own law. Georgia’s rules, another country’s domestic rules and any applicable treaty should be assessed together. Banking and payment access likewise require their own compliance checks; registration is not a guarantee of an account.

The sustainable arrangement is simple to explain: real independent work, a qualifying activity, documents that match it, timely monthly returns and a review when clients or services change. That is how a low rate becomes a dependable operating structure.