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Sole Proprietorship Registration

Can a foreigner register as a Sole Proprietor in Georgia?

Yes, any foreign citizen can register. You only need a valid passport and a legal address in Georgia. No residency permit is required to start.

When does the 1% tax rate apply?

The 1% tax applies if you have "Small Business Status" and your annual turnover is under 500,000 GEL. Without this status, the standard income tax is 20%.

Do I need a local bank account?

While not strictly mandatory for registration, you need a Georgian bank account to pay taxes and receive payments efficiently. We assist with opening accounts.

Can I register remotely?

Yes, via Power of Attorney (PoA). You can send us a notarized and apostilled PoA, and our lawyers will handle the entire process without your physical presence.

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Sole Proprietorship Registration: Start Your Business Easily with Tax Benefits

The Sole Proprietorship (Individual Entrepreneur) is the most popular and simplest form of starting a business in Georgia. This status is particularly attractive for freelancers, small business owners, and early-stage startups as it offers minimal bureaucracy and a unique tax regime. Registering as a Sole Proprietor gives an individual the right to conduct entrepreneurial activities, open a business bank account, and benefit from "Small Business" status, which implies a tax rate of only 1% on revenue (if annual turnover does not exceed 500,000 GEL). Despite the procedural simplicity, the registration process requires attention to detail: correctly selecting Economic Activity Codes (NACE), activating the tax portal, and, most importantly, timely applying for the preferential tax status. Mistakes at this stage can result in an automatic 20% income tax liability, which is a heavy burden for a budding business.

What Does This Service Cover?

Sole proprietorship registration services handle all bureaucratic and tax matters:

  • Full Registration Support: Preparing and submitting the application at the Public Service Hall (Public Registry).
  • Legal Address Provision: If you do not own property, lawyers will assist in registering a legal address with the owner's consent.
  • Tax Registration (RS.ge): Activating a user account on the Revenue Service portal and passing video identification.
  • Obtaining Small Business Status: Timely submission of the application to qualify for the 1% tax regime (a critical step often overlooked by individuals).
  • Selection of NACE Codes: Correct classification of activities to ensure compliance with laws on "prohibited activities" for Small Business status.
  • Bank Account Opening: Consultation and assistance in opening a business bank account, especially for foreign citizens.

Common Scenarios When You Need This Service

Sole Proprietor status is ideal in the following situations:

  • IT Specialists and Freelancers: Developers, designers, or marketers working for foreign companies (as contractors) who wish to legalize their income with minimal tax.
  • E-commerce: Individuals selling products on online platforms (Amazon, Etsy, or their own website).
  • Small Retailers and Salons: Owners of small shops, beauty salons, or workshops.
  • Consultants and Experts: Individuals engaged in educational or consulting activities.

Georgian Legal Framework

The activities of an Individual Entrepreneur are regulated by the Law of Georgia on Entrepreneurs. According to the law, a Sole Proprietor is not a legal entity but is a subject of entrepreneurial relations. Tax benefits are defined by the Tax Code of Georgia, specifically the special taxation regime for "Small Business." It is important to know that a Sole Proprietor is liable for business obligations with their entire personal property, which is a fundamental difference from an LLC.

Process of Service Delivery

The process begins with a consultation to determine if your activity qualifies for Small Business status (there are exceptions, e.g., currency exchange, medical activities, which are not taxed at 1%). Then documentation is prepared, and a visit to the Public Service Hall takes place. After registration is complete (usually the same or next day), the lawyer activates the RS.ge account and submits the application for the status. The status becomes effective from the first day of the month following the application submission.

Why Legal.ge?

Many believe that registering as a Sole Proprietor is a simple procedure, but most make a critical mistake: they register with the Public Registry but forget to apply for tax status with the Revenue Service, resulting in being taxed at 20% instead of 1%. Legal.ge specialists ensure that your registration is flawless and that you benefit from all tax privileges from day one. Save time and money with professional assistance.

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