Summary
The figures
0%
Tax Code of Georgia, Art. 99·1 Oct 2026
0%
Law of Georgia on Information Technology Zones; Tax Code·1 Oct 2026
5%
Tax Code of Georgia, Art. 130·1 Oct 2026
As written
2 provisions
Defines a Virtual Zone person as a legal entity engaged in information technology activities and sets the procedure for granting the status.Law of Georgia on Information Technology Zones (2010)
Exempts from profit tax the profit received by a Virtual Zone person from supplying information technologies created in Georgia outside Georgia. (Paraphrased.)Tax Code of Georgia, Article 99 (profit tax exemptions)
How it works
The status is granted by the Financial-Analytical Service of the Ministry of Finance, usually within ten working days of an online application, at no charge. The company must be a Georgian legal entity whose activity is the study, support, development, design, production and implementation of computer information systems, in the words of the law.
The exemption covers profit from IT created in Georgia and supplied abroad. Since the Revenue Service tightened its reading, the practical test is substance: developers on the Georgian payroll, management decisions taken here, costs incurred here. A company whose work is done by contractors abroad and merely invoiced from Tbilisi should expect the exemption to be challenged on audit.
Georgian salaries carry the standard 20% personal income tax and 2% pension contribution. That is the main reason a company with a large local team often prefers International Company status.
What to check before relying on it
- Who the clients are: the exemption is for sales to persons outside Georgia.
- Where the work is done: keep the payroll, the contracts and the decisions in Georgia.
- Intellectual property: the company should own what it sells.
- Banking: open the account before the first invoice; non-resident-owned companies face longer checks.
Worked example
A Virtual Zone company bills €600,000 to EU clients and keeps €400,000 after Georgian salaries and costs. Corporate income tax on that profit: 0%. When it pays the €400,000 out as dividends: 5% withholding, €20,000, less under a treaty. Salaries to its Tbilisi staff carry the standard 20% income tax and 2% pension contribution.
FAQ
Questions investors ask about this rule
Can a foreigner own a Virtual Zone company?
Yes, 100%. The owner can be abroad; the work must be done in Georgia.
Does it cover sales to Georgian clients?
No. Profit from services supplied in Georgia is taxed under the standard 15%-on-distribution regime, and those sales carry 18% VAT above the registration threshold.
How is this different from International Company status?
Virtual Zone: 0% on exported IT profit, no salary relief, strict substance test, quick to obtain. International Company: 5% on profit and salaries, 0% on dividends, two years of experience required, slower to obtain.
Sources