Why Georgia became a top hub for digital nomads
In 5 years, Tbilisi has gone from an obscure destination for adventurers to one of the busiest low-cost hubs for expats. The reason: a combo that's unique in the world, made of 4 ingredients few countries stack together.
1. The Individual Entrepreneur 1% status. Introduced in 2018 under the name "Small Business Status", it lets freelancers and small businesses be taxed at just 1% on gross turnover (not profit, directly on turnover) up to a threshold of GEL 500,000/year, roughly USD 180,000 at the 2026 rate. It's one of the lowest effective tax rates in the world for this income bracket, and it's legal, declared and enforceable.
2. The exemption on foreign income. The Georgian Tax Code (Article 82) exempts foreign-source income (foreign dividends, foreign interest, capital gains on foreign assets, and certain professional income) for resident individuals. Combined with IE status, this lets you structure: 1% on Georgian income + 0% on foreign income, including distributions from a well-structured US LLC.
3. Visa-free residency for 1 year. Citizens of the US, UK, Canada, the EU and 90+ other nationalities can stay in Georgia up to 365 days without a visa. It's the longest threshold in the world: compared to 90 days per half-year in the EU Schengen area or 60 days for Indian tourist visas, it's a game-changer for those testing a move.
4. The cost of living. A two-bedroom apartment in a modern Tbilisi neighborhood (Vake, Vera, Saburtalo) runs around €500-900/month. Average restaurant meal: €8-15. Coffee: €2-4. Cleaner: €60-100/month. Transport: €0.30 a metro/bus ride. Overall ~40-50% cheaper than Paris or London, ~30% cheaper than Lisbon, but with a European urban standard.
The implicit 5th ingredient: a real expat community. Several thousand expats live in Tbilisi in 2026, with active WhatsApp/Telegram groups, dedicated coworking cafés, and several agents/accountants who speak English. You're not arriving into a vacuum.
The Individual Entrepreneur (IE) status in detail
How it works in practice
The Individual Entrepreneur (in Georgian: ინდივიდუალური მეწარმე) is a Georgian legal status comparable to a sole-trader / self-employed status but with far more favorable taxation. You register as an IE with the Georgian Revenue Service, receive a personal identification number (PIN) that serves as your VAT and tax ID, and you can issue invoices.
On that basis, you can then obtain the Small Business Status (SBS), which is the cherry on top: a flat 1% rate on gross turnover instead of the standard progressive scale.
The 2026 thresholds
- GEL 0 - 500,000/year of turnover: 1% tax on gross turnover
- GEL 500,000 - 1,000,000/year: 3% on the portion between the two thresholds; the 1% stays on the first bracket (but in practice, exceeding these volumes de-registers you from SBS)
- >GEL 1,000,000/year: automatic de-registration from SBS, switch to the standard regime (20% on net profit)
- VAT: no VAT if turnover < GEL 100,000/year. Above that, 18% (obligation to register and charge VAT)
Eligible vs. excluded activities
SBS excludes certain activities, mainly regulated professions and financial services:
- Eligible (most expat cases): freelance dev/design/marketing, consulting, e-commerce, content creator, SaaS founder, writer, photographer, online educator, translator, etc.
- Not eligible: medical, legal, professional accounting services, regulated financial services, gambling, certain commodity-trading businesses
You invoice USD 100,000 via your IE → you pay USD 1,000 in Georgian tax (1%). No profit calculation, no expense deductions, no VAT if you stay under GEL 100,000 (~USD 36,000 at the 2026 rate). A simplified monthly filing your Georgian accountant does in 10 minutes.
How Georgia + a US LLC can combine
This is the central question, and it's subtler than for Paraguay. Three possible configurations depending on your activity and your clients.
Configuration A: everything via the Georgian IE status
You invoice your clients directly (wherever they are in the world) via your Georgian IE number. All your income is then treated as Georgian-source, hence taxed at 1% via SBS.
Pros: maximum administrative simplicity. No US LLC to maintain, no IRS Form 5472, no double bookkeeping.
Cons: no access to the US payment system (Stripe with a US EIN, ACH, routing number), a weaker business image for US clients who prefer to pay a US entity, and above GEL 100k/year you have to charge 18% Georgian VAT (potential friction for clients).
Configuration B: US LLC for international clients, IE for Georgian clients
You invoice your clients outside Georgia via your US LLC (Wyoming, for example). The US LLC's income is foreign-source distributions, hence exempt from Georgian personal tax (Article 82). You use your IE status only to invoice any local Georgian clients.
Pros: tax-optimal. 0% on US-LLC income (foreign, exempt in GE) + 1% on Georgian IE income. You keep the US business image (Stripe, US bank) for international clients.
Cons: administrative complexity (LLC + IE = two structures to maintain, two filings: IRS and Georgian). But it's what most high-turnover expats in Georgia use.
Configuration C: US LLC only, no IE status
You invoice everything via your US LLC and don't register as an IE. You become a Georgian tax resident through physical presence (≥183 days/year). The US LLC's income is foreign-source dividends/distributions, exempt at the Georgian personal level.
Pros: a single simple structure, no double admin.
Cons: without IE status, you don't benefit from the 1% on any Georgian income. And tax residency through physical presence is legally weaker than a registered IE status, especially vis-à-vis your home country.
Never invoice clients outside Georgia via your IE status thinking it stays at 1%. The Georgian authorities can reclassify this income as Georgian-source (since it was invoiced through a Georgian structure), with a potential 18% VAT obligation above GEL 100,000. Configuration A only works if you accept this risk or stay well below the VAT threshold.
Step by step: open an LLC + IE in Georgia
The practical sequence for someone implementing Configuration B (US LLC + IE status):
Arrive in Tbilisi (visa-free, 1 year)
No visa to apply for. Arrive with your passport, get a stamp at the airport, valid for 365 days. If you want to stay longer, a simple exit-and-re-entry (neighboring Turkey or Armenia) resets the counter.
Open the bank account
Go to a Bank of Georgia or TBC Bank branch within your first 3 days. Bring your passport + proof of accommodation (Airbnb, hotel, lease). Multi-currency account opened the same day, VISA card received within a week. It's your local anchor.
Register as an Individual Entrepreneur
At the Revenue Service (Public Service Hall). Documents: passport + a Georgian address (can be your Airbnb) + declared activity. Cost ~USD 50. Time: 1-2 days. You leave with your Georgian PIN.
Apply for Small Business Status (SBS)
A separate but simple procedure. Apply with the Revenue Service. Decision: ~30 days. Once granted, your rate drops from 20% to 1% on turnover. Working with a local agent (USD 200-400) speeds it up and avoids mistakes.
Hire a Georgian accountant
Essential. Cost: USD 50-150/month. The accountant handles your monthly filing (mandatory) and keeps you up to date on regulatory changes. Several Georgian accountants speak English, so ask in the Tbilisi expat groups.
Form the US LLC (Wyoming)
In parallel, open your Wyoming LLC. Articles of Organization, registered agent, EIN, Operating Agreement. See the Wyoming LLC guide. With Expat LLC, it's included in the €800 all-in.
Business account for the LLC: Wise Business
Wise Business is the #1 recommendation. Multi-currency USD/EUR/GBP/GEL (yes, Wise has supported the Georgian lari since 2023), international IBAN, Stripe-compatible, 100% remote opening. Your clients outside Georgia pay you on your US LLC's Wise Business account.
Solidify Georgian tax residency
To make your residency enforceable vis-à-vis your home country: stay ≥183 days/year on the ground, declare your departure to your home tax authority, close your ties (leases, main accounts), and keep physical evidence (Tbilisi rent, electricity bills, local accounts, a documented social life).
Banking in Georgia: the stack that works
Bank of Georgia (BoG)
The largest Georgian bank, the most international, and historically the most welcoming to expats. In-branch opening mandatory (no remote), 1 day. Multi-currency account in GEL/USD/EUR/GBP. International VISA/Mastercard card. Modern mobile app ("Sco" for younger users, "Business mBank" for pros). Decent SWIFT transfers, moderate fees. Generous daily withdrawal limit. My first choice.
TBC Bank
BoG's challenger, sometimes faster on expat service. Same overall features. If BoG refuses you for some technical reason (rare but it happens), TBC is your natural backup. Both have branches in every Tbilisi neighborhood + a service at the airport.
LLC business account: stick with Wise Business
For the US LLC, keep Wise Business as your main business account. Stripe-compatible, international IBAN, multi-currency GEL/USD/EUR. It's technically possible to use a BoG/TBC business account for your US LLC, but it's heavy and non-standard. Wise remains the royal road.
International personal account: Wise + Xapo Bank
For your international personal banking, the ideal combo:
- BoG or TBC for day-to-day in GEL (rent, groceries, going out)
- Wise personal with a VISA card for travel and purchases in EUR/USD
- Xapo Bank to keep a portion in USD with a 3.35% yield and Bitcoin custody (see my Xapo review after 3 years)
What it really costs: 2026 math
| Item | Upfront cost | Recurring annual |
|---|---|---|
| Wyoming LLC formation (Expat LLC) | €800 all-in | – |
| Wyoming Annual Report (year 2+) | included year 1 | ~€55 |
| Registered Agent (year 2+) | included year 1 | ~€115 |
| IRS filing Form 5472+1120 | – | €150-300 |
| IE registration in Georgia | ~USD 50 | €0 (auto-renews) |
| Local agent for IE/SBS (recommended) | USD 200-400 | €0 |
| Georgian accountant (monthly IE filing) | – | USD 600-1,800/year |
| BoG/TBC bank account | €0 (free) | €0 |
| Flight Europe → Tbilisi | €200-500 | (depending on round trips) |
| Decent one-bedroom rent in Tbilisi | – | €5,000-10,000/year |
| Initial setup | ~€1,800-2,500 | – |
| Recurring annual (excluding rent) | – | ~€1,500-3,000/year |
Compare that with the effective 1% on USD 100,000 of turnover = USD 1,000/year in Georgian tax. If you'd pay 25-35% in your home country on that same turnover = €25,000-35,000 in tax. The setup pays for itself instantly from USD 30-40k/year of turnover.
Georgia vs Paraguay vs Portugal: which country for your profile?
| Criterion | Georgia | Paraguay | Portugal (IFICI) |
|---|---|---|---|
| Business income tax | 1% (IE status up to USD 180k) | 0% | 0% if IFICI-eligible |
| Foreign income tax (US LLC) | 0% (Art. 82) | 0% (territorial) | 0% if IFICI |
| CFC rules | Limited | ❌ none | ✓ (Article 66 CIRC) |
| Easy residency | Visa-free 1 year | Cédula ~USD 2,000 | Variable (D7/D8) |
| Physical presence required | ≥183 days (residency) or IE | ≥120 days or vital center | variable by status |
| Cost of living/month | €700-1,200 | €800-1,500 | €1,200-2,500 |
| Tax regime stability | ⚠️ Medium (frequent changes) | Stable since 1991 | Recent (IFICI 2024) |
| Expat community | Small but active | Small | Very large |
| Expat banking | Excellent (BoG/TBC) | Decent with cédula | Excellent (EU) |
| Flight logistics from Europe | Direct from Paris/Munich | 1 long flight via SP/BA | Short flight from Europe |
| Turnover sweet spot | USD 30k-180k/year | All levels | All levels |
My summary take:
- Georgia: the best compromise if you want to stay relatively close to Europe + turnover in the 30-180k USD window + a very low cost of living. Caveat: less regulatory stability than Portugal/Paraguay.
- Paraguay: tax-optimal (0%) and maximum simplicity, but it requires being able to live far from Europe (long flights, isolation).
- Portugal: best if you want to stay in the EU zone + a large expat community, but adds tax complexity (CFC, LLC classification, strict IFICI conditions).
Who this setup is relevant for, and who it isn't
✅ Georgia + LLC makes sense if
- You do between USD 30,000 and 180,000/year of turnover (the sweet spot of the 1% IE status)
- You can really live 6+ months/year in Tbilisi (or elsewhere in Georgia)
- You value proximity to Europe (direct 5-hour flight from Paris)
- You want a low cost of living without sacrificing urban quality
- You're flexible about regulatory adjustments (the Georgian tax code evolves regularly)
- You mostly work with clients outside Georgia
❌ Georgia doesn't make sense if
- Your turnover regularly exceeds USD 180,000/year: you'll move to 3%, then de-registration. Prefer Paraguay or Dubai.
- You want an ultra-stable tax residency over 10-20 years (Paraguay and Portugal are more predictable)
- You don't want to relocate (the ID card alone isn't enough, as everywhere)
- You do less than USD 20,000/year of turnover (the setup + accountant cost isn't amortized)
- You're very sensitive to geopolitics (Georgia borders Russia, which creates periodic uncertainty)
- You operate in a profession excluded from SBS (medical, legal, regulated financial services)
My honest take on Georgia
Georgia is a remarkable country for those who accept the trade-off of "exceptional tax regime against medium regulatory stability". The 1% is NOT a trap: it's a real regime, legally enforceable, used by thousands of freelancers since 2018. But you have to actively watch the changes:
Over the last 4 years, I've seen: the threshold moving from 200k to GEL 500k (positive for users), an adjustment of eligible activities (slightly more restrictive), repeated political discussions about "scrapping SBS" (never enacted, but the risk exists), and the introduction of new reporting obligations. The regime isn't in immediate danger, but its contours shift.
Tbilisi as a city is a favorite for many. The downtown blends 19th-century European architecture with Soviet buildings. The nightlife is rich, the food is exceptional (Georgian cuisine is internationally underrated), and the feeling of being in a city on the rise is palpable.
The day-to-day caveat: the language (Georgian is complex, a unique alphabet; most locals speak Russian + some English, little French), winter air pollution (Tbilisi sits in a basin, so it stagnates), and the political situation with Russia that creates moments of uncertainty (2024 protests, regional geopolitics).
Ready to open your LLC from Georgia?
I handle the US LLC (€800 all-in). For the IE registration in Georgia, I can connect you with agents in Tbilisi.
FAQ: frequently asked questions about the Georgia setup
What is the real tax rate in Georgia for an IE?
1% on gross turnover up to GEL 500,000/year (~USD 180,000 in 2026). It's one of the simplest regimes in the world: no profit calculation, simplified monthly filing, no VAT below GEL 100,000.
Does Georgia have a territorial system on foreign income?
Partially yes. Article 82 of the Tax Code exempts foreign-source income (dividends, interest, capital gains, certain professional income) at the personal level. This enables the 1% IE + 0% US LLC combo.
Do you need a visa to enter Georgia?
No for US, UK, Canadian and EU citizens. Visa-free stay up to 1 year, the longest threshold in the world.
How do you combine a US LLC and Georgian IE status?
Recommended configuration: US LLC for international clients (income exempt in GE as foreign) + IE status for any Georgian clients (1%). Avoid the mixing that can trigger reclassification + VAT.
Which banks to recommend?
Bank of Georgia (BoG) or TBC Bank. In-branch opening mandatory, 1-3 days after you arrive. Multi-currency account in GEL/USD/EUR. For your US LLC, keep Wise Business.
How much does the full setup cost?
Initial setup: ~€1,800-2,500 (LLC €800 + IE agent USD 200-400 + flights + first months). Recurring: ~€1,500-3,000/year (US LLC + Georgian accountant). The 1% on USD 100k = USD 1,000/year in tax. Amortizable from USD 30-40k of turnover.
Do Georgian CFC rules apply?
Limited. Georgia has a general anti-avoidance rule but no specific CFC regime for US LLCs. An operating LLC (services invoiced) is generally out of scope. A purely passive LLC (holding) can be more exposed.
What are the main risks?
(1) Fake resident: an ID card or IE with no real life on the ground = reassessment in your home country. (2) Mixing IE/LLC on the same flows: possible reclassification. (3) Regulatory change (tax code amended 3-4× since 2020). Working with an active Georgian accountant is non-negotiable.
Is the geopolitical situation with Russia a risk?
It's a factor to watch. Georgia has 20% of its territory occupied by Russia (Abkhazia, South Ossetia) and recurring tensions. In practice for expats: Tbilisi stays safe, but moments of uncertainty appear periodically (the 2023-2024 protests in particular). Not a blocker, but factor it into your plan B (Armenia or Turkey are a 2-hour drive away if needed).
Going further
- Why open a US LLC as a non-resident: the 7 real advantages
- Complete guide to opening a Wyoming LLC without an SSN: the technical process
- US LLC from Portugal: compare (NHR/IFICI 2024)
- US LLC from Paraguay: pure territorial, no CFC
- US bank account for non-residents: Wise / Mercury / Relay
- IRS guide: Forms 5472 and 1120: the annual US reporting obligation
- Wise Business for a US LLC: the #1 recommendation
- Xapo Bank: referral code UGD-NEB-JZ: USD 500 in BTC
- My Xapo Bank review after 3 years
- Affiliate disclosure