Georgian Residence Permit via Business

[avalanche]

Does anybody know any details about getting Residence Permit in Georgia when you have a Georgian LLC receiving income only from foreign clients?

Based on what I've heard you just need:
1. register your LLC for VAT
2. receive around $20,000 as income on TransferWise or another EMI
3. receive turnover certificate from the Revenue Service
4. withdraw around $5k in dividends on a personal bank account in Georgia
5. apply for the residency.

Is that plan realistic? Anybody tried it before?

 

[unicorn]

you don't even need a company in Georgia to get a residence permit I think. I believe they only apply the 183 day rule - at least that is how I understood it.

 

[avalanche]

you don't even need a company in Georgia to get a residence permit I think. I believe they only apply the 183 day rule - at least that is how I understood it.

You need to. Its either you buy $100,000 worth of properties or you get residence permit due to employment (using your own company). Second option requires your company to have turnover around $17,000 per one foreign employee (e.g you) before you can apply for residency.

Note that I'm not talking about *tax residency*. I'm talking about residence permit.

 

[avalanche]

From gov website http://psh.gov.ge/main/page/6/507:

Labor residence permit
Issued in the manner established by the legislation of Georgia for implementation of entrepreneurial activities or employment in Georgia to an alien who will submit to the Agency a document confirming their entrepreneurial activities or employment in Georgia and also a certificate confirming that monthly income/salary obtained by them from entrepreneurial activities or employment in Georgia is not less than five-time amount of minimum subsistence level of an average customer in Georgia and annual turnover of their employer enterprise/an enterprise established by them (except for the educational institution or medical facilities) is not less than 50 000 GEL per each alien seeking the work residence permit. For the purposes of this article, annual turnover of an educational institution or medical facility employing an alien or established by the alien is not less than 35 000 GEL per each alien seeking the work residence permit.

 

[unicorn]

Ok ... that was new to me, thank you for this update avalanche ! How does this work then with the solo entrepreneurs taking a Georgian statue (without company formation) ? 1 (to 3) % tax finished as well ?

 

[JohnLocke]

There was used to be a few guys around here from Georgia that also were able to setup companies there. Somehow they disappeared again.

Anyway a quick search on google bring up this How to Move to Tbilisi: the Complete Relocation Guide | InterNations GO! I don't know how much they will charge for this guide but it may be worth to buy it to get some insider information.

So there is this website Immigrate to Georgia. Get ready for moving to Georgia which has a lot of good information on the frontpage already.

Anyway, you will need to get in touch with someone in Georgia to get everything clear and correct in order to be able to make a decission.

 

[avalanche]

There was used to be a few guys around here from Georgia that also were able to setup companies there. Somehow they disappeared again.

Anyway a quick search on google bring up this How to Move to Tbilisi: the Complete Relocation Guide | InterNations GO! I don't know how much they will charge for this guide but it may be worth to buy it to get some insider information.

So there is this website Immigrate to Georgia. Get ready for moving to Georgia which has a lot of good information on the frontpage already.

Anyway, you will need to get in touch with someone in Georgia to get everything clear and correct in order to be able to make a decission.

The thing is, I already know contacts in Georgia who might be able to set it up but I was looking for people who already had personal experience with it to verify if that strategy can work.

 

[avalanche]

Ok ... that was new to me, thank you for this update avalanche ! How does this work then with the solo entrepreneurs taking a Georgian statue (without company formation) ? 1 (to 3) % tax finished as well ?

Not sure if sole proprietor can apply for residency honestly.

 

[unicorn]

i thought having to live in Georgia was a requirement to be a sole proprietor. it would be interesting if anyone living anywhere could claim to be a sole proprietor in georgia, it would solve a lot of problems for many people.

 

[avalanche]

i thought having to live in Georgia was a requirement to be a sole proprietor. it would be interesting if anyone living anywhere could claim to be a sole proprietor in georgia, it would solve a lot of problems for many people.

It is possible to be sole prop without residing in Georgia. Very simple actually.

 

[Offshorenerd]

It is possible to be sole prop without residing in Georgia. Very simple actually.

I can confirm this. I live in Georgia and all you need to set up sole proprietor ship is an apostilled copy of your passport and a power of attorney for your representative. Besides some LLCs I use this status as well for some of my business activity. I know some people as well who use it without living in Georgia.

 

[avalanche]

I can confirm this. I live in Georgia and all you need to set up sole proprietor ship is an apostilled copy of your passport and a power of attorney for your representative. Besides some LLCs I use this status as well for some of my business activity. I know some people as well who use it without living in Georgia.

Apostilled copy of the passport? Never needed this one

 

[Offshorenerd]

Apostilled copy of the passport? Never needed this one

This applies if you do it remotely. If you show up personally you only need your passport.

 

[avalanche]

This applies if you do it remotely. If you show up personally you only need your passport.

Did it both physically and then remotely, never needed apostille. Maybe its because I'm Russian I dont know

 

[unicorn]

I live in Georgia and all you need to set up sole proprietor ship is an apostilled copy of your passport and a power of attorney for your representative. Besides some LLCs I use this status as well for some of my business activity. I know some people as well who use it without living in Georgia.

Something is not so clear for me. What I understood is this :

1) you can create a virtual IT zone company - this is basically an LLC with a special name (and the 0 % tax for income generated abroad)
2) you can combine a virtual IT zone (5 % dividend tax) and sole proprietorship eg for a non-IT activity (1 % up to +/- 166.000 euro)
3) an accountant wrote to me that, if you have residency in Georgia, the 1 % does not count : it is 20 % income tax that is applied - correct ?
4) if you become a resident, your LLC must have a minimum annual turnover of 18.000 euro per year and you are obliged to take out a salary - correct ?



What I don't understand is this scenario : what if you set up the virtual IT zone company first - and later on you move and actually become (tax) resident of Georgia. Does the 5 % dividend tax still apply ? As I read somewhere that no dividend tax is withheld for georgian residents. Perhaps Offshorenerd would know ?

By the way (totally off the tax topic but still ... relevant if you consider moving there) : I read somewhere that sometimes, there is no water, or only very low debit, barely enough for washing machine / showers / etc. - correct or exagerated ? Also, Georgia ranks "bad" for internet speed - correct or exagerated ? Finally : in winter, how cold does it get and how many months is it usually freezing ?

Also, what seems lacking, is a decent offer of accounting offices. (and think of it : monthly average salary in georgia for a bookkeeper is about 400 euro per month ; but big firms sell their packages for 150 euro per month even if you have less than 20 invoices). Should be available then for less)

 

[avalanche]

Something is not so clear for me. What I understood is this :

1) you can create a virtual IT zone company - this is basically an LLC with a special name (and the 0 % tax for income generated abroad)
2) you can combine a virtual IT zone (5 % dividend tax) and sole proprietorship eg for a non-IT activity (1 % up to +/- 166.000 euro)
3) an accountant wrote to me that, if you have residency in Georgia, the 1 % does not count : it is 20 % income tax that is applied - correct ?
4) if you become a resident, your LLC must have a minimum annual turnover of 18.000 euro per year and you are obliged to take out a salary - correct ?



What I don't understand is this scenario : what if you set up the virtual IT zone company first - and later on you move and actually become (tax) resident of Georgia. Does the 5 % dividend tax still apply ? As I read somewhere that no dividend tax is withheld for georgian residents. Perhaps Offshorenerd would know ?

By the way (totally off the tax topic but still ... relevant if you consider moving there) : I read somewhere that sometimes, there is no water, or only very low debit, barely enough for washing machine / showers / etc. - correct or exagerated ? Also, Georgia ranks "bad" for internet speed - correct or exagerated ? Finally : in winter, how cold does it get and how many months is it usually freezing ?

Also, what seems lacking, is a decent offer of accounting offices. (and think of it : monthly average salary in georgia for a bookkeeper is about 400 euro per month ; but big firms sell their packages for 150 euro per month even if you have less than 20 invoices). Should be available then for less)

1) dividend tax 5%
2) I'm doing the same
3) not true. get small business status and you pay 1% then 3% if income exceeds $50k or so.
5) never heard of this requirement.

- yes 5% still applies if you are resident of Georgia (never heard accountant say otherwise).
- regarding washing machine / showers never encountered any issues at all.
- internet speed was one of the best (especially after southeast asian countries).
- accounting sucks balls in Georgia (most of the accountants are totally incompetent or saying different things), but you can try cloud accounting software balance.ge (google it). you will have to use it on your own though I guess.

I also dont like that accountants charge per invoice while UK accounting solutions are usually not bound to the number of invoices (because they are automated). Im thinking of combining UK LTD for collecting payments and Georgian LLC for receiving the chunk of money and paying lowest fee possible to Georgian accountants.

 

[khinkali]

if you become a resident, your LLC must have a minimum annual turnover

I think they mean that your business will need turnover and pay salary in order to get you a residence certificate. Depending on citizenship you can live here and work for 365 days plus a 3 minute border hope to Armenia for the next 365 days. But legal residency might be useful for dealing with organisations outside Georgia (banks, your home countries tax office, etc). I'm in two minds about it.

Regarding water pressure I agree with avalanche; it's fine. But if you come here from Singapore or Switzerland you might not like to have no water or electricity for a few hours occasionally. Internet is OK. Mine is from the landlord and shared with other people. When it's slow I use my phone as a 4G hotspot on Magti, which has been very reliable and pretty quick (5mb to 20mb+ downloading from USA/Europe).

Weather? Well that depends where you compare it to. Tbilisi is about as South as Rome or Barcelona, but it's high. Last Thursday it was 19c in the afternoon, but 2 days later it reached -8c at night. You feel the cold in Winter when it's windy, but sometimes in January you can sit in the strong sunshine without a coat or jumper. There's a lot more Sunshine than Northern Europe, so I'd say it's like Spain but with colder winds sometimes.

 

[khinkali]

1. register your LLC for VAT
2. receive around $20,000 as income on TransferWise or another EMI
3. receive turnover certificate from the Revenue Service
4. withdraw around $5k in dividends on a personal bank account in Georgia
5. apply for the residency.

I have not gone through this process (I'm not sure if I want to yet) but I advise checking about the salary requirement. I don't know if you can take that as dividend.

https://sda.gov.ge/?page_id=11645&lang=en

monthly income/salary obtained by them from entrepreneurial activities or employment in Georgia is not less than five-time amount of minimum subsistence level of an average customer in Georgia

If they do require it as salary, it means paying 20% on the first $300 per month (assuming a one person household), then 5% for the dividends (assuming virtual zone IT company with foreign sales so no profit tax).

 

[avalanche]

I have not gone through this process (I'm not sure if I want to yet) but I advise checking about the salary requirement. I don't know if you can take that as dividend.

https://sda.gov.ge/?page_id=11645&lang=en

If they do require it as salary, it means paying 20% on the first $300 per month (assuming a one person household), then 5% for the dividends (assuming virtual zone IT company with foreign sales so no profit tax).

It says income/salary (might be interpreted as Other Income or Salary). Income might be confirmed by just depositing $4k to your bank account (without proof that it came from your company). Thats what I heard from lawyers so far. Need to research further.

 

[khinkali]

It's great to check with local lawyers. The official rule would be the Georgian original (I can't read Georgian) not the translation, but also the approach by officials doesn't always match the letter of the law anyway.

From some discussions I had, it seems to depend quite a lot on nationality. Some nationals seem to be treated more strictly and others more leniently.