International tax planning is a strategic process aimed at legally optimizing the global tax burden of a business. In today's world, where capital and services easily cross borders, companies have the opportunity to choose the most efficient jurisdictions for their activities. Georgia is one of the most attractive locations in this regard, offering low tax rates, a liberal business environment, and special tax regimes (e.g., International Company Status for IT and Maritime sectors, Virtual Zone, Free Industrial Zones). However, successful planning requires not only seeking low taxes but also compliance with international regulations (BEPS, AML/KYC) to avoid allegations of tax evasion. Our platform gives you access to highly qualified consultants who will help you create a sustainable and efficient international structure.
The service covers a wide range of strategic solutions:
- Corporate Structuring: Optimal placement of holding companies, subsidiaries, and branches across different jurisdictions.
- Utilizing Special Tax Regimes: Implementing "International Company" status (5% corporate tax, 5% income tax) and Virtual Zone (0% corporate tax).
- Free Industrial Zones (FIZ): Using FIZ benefits for manufacturing and international trade (0% profit tax, 0% import/export tax).
- IP (Intellectual Property) Planning: Registering IP rights and managing royalty flows for tax efficiency.
- Repatriation Strategies: Repatriating profits, dividends, and capital with minimal tax leakage.
- Substance Requirements: Proving real economic activity in Georgia to meet international standards.
International tax planning is essential for many types of businesses. For example, a US IT company opens an office in Georgia with "International Company" status to reduce tax costs while serving global clients. Another scenario involves a European investor establishing a manufacturing plant in the Poti Free Industrial Zone for production and export, thereby benefiting from a full tax holiday. A third example is a digital marketing agency structuring itself in Georgia to utilize the distributed profit tax model (the so-called Estonian model), where reinvested profits are not taxed.
The legal framework is based on the Tax Code of Georgia and its special provisions on preferential regimes. Specifically, the Resolution of the Government of Georgia "On Determining the Status of an International Company" is important as it sets specific requirements. The Law "On Free Industrial Zones" is also applied. Planning necessarily takes into account OECD (Organisation for Economic Co-operation and Development) recommendations within the BEPS (Base Erosion and Profit Shifting) project framework to ensure the structure is internationally recognized and legitimate.
The process begins with an analysis of the client's business goals and existing global structure. The consultant evaluates which jurisdiction and regime best fit the client's needs. For example, if the company is in the IT sector, the "International Company" status is considered. Following this, the legal entity is registered, and necessary licenses and statuses are obtained (application to the Revenue Service). In parallel, contracts and internal policies are developed to confirm economic substance — the existence of an office, hiring of employees, and execution of management processes from Georgia.
Legal.ge is a platform connecting you with world-class tax architects. Correct planning can mean saving millions in the long run. Specialists registered with us will help you leverage Georgia's unique tax potential and make it part of your global success. Start planning your tax strategy on Legal.ge.
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