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In order to further improve the business environment in the country, to strengthen Georgia’s potential as a regional hub, and to increase the interest of multinational international companies, the Government of Georgia allows companies to obtain “International Company” status and benefit from tax breaks. The benefit applies to companies related to the shipping business as well as IT companies. See the Resolution of the Government of Georgia on International Company here.
“International Companies” enjoy the following tax benefits:
International Company status may be granted to a Georgian enterprise, including a representative of a non-resident enterprise in Georgia if it has at least 2 years of experience in this permitted activity. List of permitted activities include:
IT Services:
Commercial and technical services related to the shipowner and/or ship ownership, including:
The above-permitted activities include services provided under a service contract.
A prerequisite for obtaining the status is that the International Company operates only within the scope of the above-mentioned permitted activity and has at least 2 years of experience in the activity.
An International Company has the right to receive other income other than the permitted activity, however, such income should not exceed 2% of the income from its permitted activity.
In case the company meets all the requirements defined by the legislation, the status is granted on the basis of the application submitted to the Revenue Service and on the basis of the issuance of the relevant ordinance by the Government of Georgia.
The Government of Georgia makes a decision to revoke the International Company 1) status on the basis of a person’s application; 2) If the company carries out activities (s) other than those permitted under the status, the income from which exceeds the threshold amount; 3) If the company does not operate from Georgia and does not meet the other requirements of the status.
The status of an International Company has existed in the Tax Code since 2019, although the list of permitted activities has only been determined by the government since October 8, 2020, hence the tax incentives set out in this section were not actually in effect.
International Company status has significant tax benefits, which creates a very attractive business environment for companies, including international companies working in the field of Information Technology and Shipping. This status is new aims to bring international companies to Georgia, employ Georgian residents, and conduct business from Georgia.
For more information or to get help with obtaining the International Company status contact us.