Tax benefical status of International Companies in Georgia

published on 9 August 2021 | reading time approx. 3 minutes

Georgia became a very attractive jurisdiction for IT and vessel companies. The companies registered in Georgia which carry out activities related to vessel or IT business are entitled to get the tax beneficial status of International Company (IC).

The International Company is eligible for the following tax incentives/benefits:

The profit of IC is subject to the corporate income tax at the rate of 5%;
The dividends paid by IC are not subject to the taxation;
The individual income tax rate on salaries paid by IC is 5%;
The property of IC is exempted from the property tax (except for land plot);

The government of Georgia should grant the status of International Company to a Georgian resident company, provided that:

The company carries out only the specific activities defined by the government of Georgia and generates income only through such activities;
The company has at least 2 years of experience in carrying out the above mentioned permitted activities or all its shareholder companies (jointly holding more than 50% shares) have such experience independently;

According to the decision of government of Georgia, International Company has the right to carry out the following activities:

Creating of software; Creating of computer games;
Computer programming, consulting and related activities; Consulting activities in the field of IT;
IT management activities;
Other activities related to information technologies and computer services;
Production and / or delivery of a digital product, including software support and delivery the updated version thereof;
Website development and / or delivery;
Web hosting, remote technical maintenance of software and hardware;
Providing software and software update;
Providing images, texts and information for the access to the database;
Remote administration of the IT system;
Online supply of allocated memory capacity;
Accessing, downloading or updating of software (including purchasing / accounting software or antivirus software);
Banner advertising blocking software;
Downloadable drivers, such as software that connects computers to peripherals (such as a printer);
Automatic online installation of filters on websites;
Automatic online installation of firewalls;
Commercial and technical services related to the shipowner and / or ship ownership, including:
Renting a ship with or without a crew (charter); Trip planning and / or analysis; Giving trip instructions to the ship's captain; Managing disputes related to cargo claims and commercial, legal issues of the chartering; Management of orders for the construction of new ships and / or the service of buying and selling used ships; Supervising the physical condition of the ship and / or supplying the ship with relevant technical parts and / or food products; Coordination of ship building, ship docking and repair, conducting inspections in accordance with the requirements of industry regulations; Ensuring compliance with the ISM Code, the flag and port state control requirements and the rules of the classification society.

In order to obtain the tax beneficial status of an International Company, the company must carry out the permitted activities in Georgia and hire staff with the necessary qualifications. The International Company is entitled to get also the “extra” income other than income gained through the above mentioned permitted activities, if such “extra” income does not exceed 2% of the income received through the permitted activities.