This is the second article of the regular Klein Law Group column. To read the previous article on setting up a company in Georgia, please visit the link below.
If you’re looking to reduce your tax burden, one excellent solution is to consider moving your business and/or personal tax residency to a country with lower tax rates. Georgia, a country known for its attractive tax system, offers numerous benefits for tax residents and businesses. This article highlights why Georgia is an appealing option and provides a step-by-step guide to efficiently and legally move your taxes with minimal tax leakage.
Georgia has in place multi-prong programs for businesses, digital nomads and individuals. Simple and Efficient WHY GEORGIA?
Georgia boasts several advantages that make it an enticing location for tax residency. These include:
Low tax rates for Individual Entrepreneurs – Georgia offers a flat 1% tax rate for individual entrepreneurs (sole proprietors) earning less than 500,000 GEL (approximately $190,000) annually. Above 500K GEL, individual entrepreneur rate is 3%. Employees also benefit from a flat 20% tax rate, regardless of income level.
Georgia boasts several advantages that make it an enticing location for tax residency
Simple tax system – Unlike complex tiered tax systems, Georgia’s tax system is straightforward, ensuring that even high earners pay only 20% on their entire income. Corporations charge VAT only once annual invoicing exceeds 100K GEL (about $40K) which provides a competitive advantage for very young start-ups.
Moreover, individuals (with no employees) with less than 30,000 GEL (about $11.5K) turnover can apply for Micro Business Status (0% tax).
Favorable business environment – Georgia has a low cost of living, simplified bureaucracy, and minimal regulations, making it easy to open and operate a business within just two working days.
Moving your taxes to Georgia is beneficial for individuals seeking lower tax rates
High Net Worth Tax Residency program – This program allows individuals with significant income or assets to become tax residents of Georgia without physically residing there, providing tax benefits in certain cases.
WHO SHOULD CONSIDER MOVING THEIR TAXES TO GEORGIA?
Moving your taxes to Georgia is beneficial for individuals seeking lower tax rates. Regardless of income level, if you’re paying higher taxes than desired and feel that the benefits and services received don’t align with your contributions, relocating your tax residency to Georgia can be a solution.
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