Although there are no rules stating you don’t qualify, in practice, cases like these, where it is a single company director with no employees in Georgia, will almost certainly get rejected. A few years ago, the program was easier to join. But since 2020, rejections are typical for anyone without substance in Georgia. Either way, you would have to open an LLC in Georgia, because sole traders and/or foreign entities do not qualify under any circumstances.
What sort of economic substance do I need in Georgia?
Typically, actual physical premises and/or local staff, but the exact requirements depend on the nature of each individual case. One of our advisers can talk through your unique situation and advise what you would need to do, and whether staff/premises would be necessary or not to have a higher chance of a successful application.
Do I, as company director, need to live in Georgia to benefit from the Virtual Zone Status?
No. You can manage the business remotely. But if you’re not residing in Georgia yourself, you’ll need to have some form of other presence here, such as a local office.
It should also be noted that if you are a tax resident elsewhere, you may owe additional taxes in such country or countries, on any income earned from your Georgian business. As Georgia is already part of FATCA, and will join the CRS in 2023, your current country of tax residency may have access to your bank account details in Georgia. If you are a tax resident in Georgia, then no additional tax is levied on dividend distributions after the initial 5%.
Can I open the business remotely?
Yes. If you already have substance here, we can assess your application and help you get a positive result. If you do not have substance, we can give assistance on getting it in place to ensure a successful application.
Are there any capital requirements or annual fees?
No. Once you open an LLC (which also has no capital requirements or annual fees) then, after establishing sufficient substance, you can proceed with the VZ application. Your company does not have to generate any minimum turnover and no additional annual fees are levied against continued operation of the business. We can help you file your monthly tax returns.
How To Apply For The Georgian Virtual Zone
Register your legal entity (business) – takes about 2 working days.
Register your entity with the Revenue Service and its online portal – 1 working day
Submit your digital Virtual Zone Application at http://newzone.mof.ge/ – Minimum 10 working days for application processing (but expect a 30 day wait in practice).
You may then be asked to provide additional proof and clarification of your business model, your services/products, local staff contracts, and more. Another wait of 10 to 30 days for additional documents to be reviewed. If accepted, additional 2 working days to get the certificate.
Whether you need to follow all 4 steps or are just looking to apply for the final Virtual Zone status, we can help make the process as painless as possible, and help you avoid the common mistakes independent applications often suffer from.
Get a free 30-minute consultation with one of our Business registration in Georgia tax advisers.
If you’d prefer to DIY the process, we’ve put together a straightforward checklist that you can follow. Please note, if you’d like to open your VZ company remotely, you must have representation in Georgia.