Georgian Residence Permit via Business

[Traveler]

What do you mean?
AFAIK, you can get utility bills delivered to your address. You can also get confirmation with you name and address from Georgian banks.

In my personal experience, you really can't.

Not only that, but even online bills don't look like what you'd expect to see in most places in the world.

The only bill I've ever seen with an actual name and address on it is the electricity bill, but even that's just a tiny slip, which I very highly doubt would do any good at all in a KYC situation. And if you rent, then even getting that slip would be a challenge, as the main utilities (water, electricity, gas) always remain on the property owner's name. To my knowledge, this isn't by choice but by regulation. So you're stuck with Internet, but I don't believe any of the larger providers provide an actual bill.

Most people seem to take one of two routes - either a bank letter / statement (BoG is a bit better in this regard than TBC), but that's no good in many situations as a lot of banks know full well how easy it is to get any address to appear on a bank statement, and therefore don't consider these sufficient. Or a letter from the embassy of the person's country of origin, but needless to say, that takes a lot of time and paperwork, and may not be possible at all, depending on the country in question.

From my experience having lived in Tbilisi for over half a year, the only document I have ever received in post with my name and address on was a letter from the tax authorities of the country that I resided in previously. And that's it. In 6+ months.

 

[Jea]

@Jea it might depend on which utility company. I don't have to pay bills myself. I've only seen some bills for previous landlords; they didn't have the details I'd need for KYC but maybe others do.

What details they didn't have? There's the address, date and also the name (although just a surname of the person - but this should be enough for KYC).

I don't know about other banks but TBC give me a letter showing my name, passport number and balance, with their stamp to make it official. I think it's about $3. I only have Georgian language versions to hand, but in English it was something like "The address provided to us by our customer is....". Maybe this is OK for your KYC needs; I'll try it with crypto exchanges next month and if it doesn't work I'll register for tax here or get a residence permit.

I assume the reason for the odd wording is that there is not a door to door postal service here. My bank don't know if I live where I say I do.

I think crypto exchanges will accept that even with that wording. You can have it translated by a certified translator.
Next time you can ask TBC for: 1. English version of the reference letter 2. to modify the wording according to your need

The business turnover needs to be GEL 50k per year per residence permit (about $1500 per month) and each employee needs to make 5x the "minimum subsistence level of an average customer" in Georgia. If I read things correctly then it looks like it's about $300 per month. So if your business has deductible expenses then you should be looking at less than 20% * 50k tax. A local tax advisor can probably be very helpful.

Yes, or you can buy property worth 100k USD. I think that the property tax for residents is 1% (and much lower for non-residents).


For what reason(s) do you want to get GE residence permit?

In my personal experience, you really can't.

Not only that, but even online bills don't look like what you'd expect to see in most places in the world.

The only bill I've ever seen with an actual name and address on it is the electricity bill, but even that's just a tiny slip, which I very highly doubt would do any good at all in a KYC situation. And if you rent, then even getting that slip would be a challenge, as the main utilities (water, electricity, gas) always remain on the property owner's name. To my knowledge, this isn't by choice but by regulation. So you're stuck with Internet, but I don't believe any of the larger providers provide an actual bill.

Most people seem to take one of two routes - either a bank letter / statement (BoG is a bit better in this regard than TBC), but that's no good in many situations as a lot of banks know full well how easy it is to get any address to appear on a bank statement, and therefore don't consider these sufficient. Or a letter from the embassy of the person's country of origin, but needless to say, that takes a lot of time and paperwork, and may not be possible at all, depending on the country in question.

From my experience having lived in Tbilisi for over half a year, the only document I have ever received in post with my name and address on was a letter from the tax authorities of the country that I resided in previously. And that's it. In 6+ months.

Hmm, that's weird, I saw gas bill from Tbilisi energy. Delivered to customer's GE address (he's a GE citizen). Looks OK after getting certified translation of it. Which utility companies are you using?

AFAIK, you can go to utility company with the landlord and the rental agreement and register bills in your name. Have you tried that?

 

[khinkali]

BoG is a bit better in this regard than TBC

It looks like I might be heading to BoG this week before they close the doors for covid (people are already asked not to visit branches). Thanks!

For what reason(s) do you want to get GE residence permit?

It is a nice piece of identification when you need it, along with a tax id. I planned to get it when I moved here, but I didn't get round to it after I found a medical insurance provider who works with non residents. Also I see adverts for a driving school that can get a license for non residents (when my Thai license runs out I'll have none).

Right now, the land borders are closed and I am not aware of any waiving of of the 365 day rule for people who can't get back to Georgia, so the residence permit might become a necessity to live here anyway.

 

[Jea]

It is a nice piece of identification when you need it, along with a tax id. I planned to get it when I moved here, but I didn't get round to it after I found a medical insurance provider who works with non residents. Also I see adverts for a driving school that can get a license for non residents (when my Thai license runs out I'll have none).

Right now, the land borders are closed and I am not aware of any waiving of of the 365 day rule for people who can't get back to Georgia, so the residence permit might become a necessity to live here anyway.

OK, got it... To get tax ID, you need to either spend 183 days, or register as HNWI, correct?

BTW, do know if this is true? --- Residents need to declare their world wide income to Georgian tax authorities, non residents don't. Neither pay tax on it.

You can get Georgian driving licence (car and/or motorbike) without taking driving lessons, you just need to pass a test (about 1000 questions, would take couple of hours to learn it, can be taken in English, you can book it online - about 2 weeks waiting time in Tbilisi, Georgian citizen needs to come with you and confirm that you live in Georgia; need bring health certificate to the test)

 

[khinkali]

183 days (or the HNWI route) makes you tax resident, but you can be due taxes without being tax resident. For that you need a tax id. I don't know if you get useful documentation as a non resident, but you should be able to get an id easily.

BTW, do know if this is true? --- Residents need to declare their world wide income to Georgian tax authorities, non residents don't. Neither pay tax on it.

The tax code lists non Georgia source income and an exemption, so my guess is that you report it and pay 0% on it.

But this is a good question for a local tax advisor. We're reading the English translation not the Georgian defacto law, plus knowledge of the current practices of the Revenue Service are probably useful.

A couple of hours to learn the driving test? You're a fast learner Jea!

 

[TheGrave]

Guys, all sounds good but how about VAT? I see nobody mentions that. You need to charge 18% to all your EU customers and that is not refundable, ain't that right?

 

[khinkali]

@TheGrave If you sell to VAT registered companies in the EU then usually the customer pays the VAT and immediately reclaims it, so it should be 0% net.

If you sell to individual consumers in the EU then you are supposed to register for VAT and pay on their behalf. You could look into the "Internal Processing Regime" to see if you can claim back any input VAT and duty that you paid in Georgia. Or if you're doing a lot of re-export business, a FIZ (Free Industrial Zone) might work for you.

 

[TheGrave]

Exporting services in my case. Customer will pay Georgian VAT which they can't claim back, believe me. Claiming back VAT is only in cases where you have local trade - with companies registered to VAT in your own country and some special complicated cases in EU trades but when you trade with companies outside EU you are generally f*cked.

 

[khinkali]

Georgian export VAT ended in 1997.

Do you mean EU VAT? Maybe it varies by country but the principle across EU should be that input VAT can be reclaimed by a VAT registered business, if the good or service is for that business. It's more complicated if a non-EU company without a tax presence receives a service on EU territory from another non-EU company.

Non VAT registered consumers do have to pay VAT, which you collect from them, as would a local supplier.

 

[Offshorenerd]

As somebody who runs a business in Georgia with foreign clients I can confirm, no Georgian VAT on exported services.

 

[machinetheory]

As somebody who runs a business in Georgia with foreign clients I can confirm, no Georgian VAT on exported services.

I am on the fence on doing this, are you a foreign national or Georgian citizen? I've heard stories about Georgian banks closing business accounts if they find you don't have ties in Georgia, ex. salary, office rent, etc. Could you clear that up a bit?

 

[Offshorenerd]

I am on the fence on doing this, are you a foreign national or Georgian citizen? I've heard stories about Georgian banks closing business accounts if they find you don't have ties in Georgia, ex. salary, office rent, etc. Could you clear that up a bit?

Im a foreigner here. Its true that banks might close/not open accounts if you dont have a local connection, but I do.
You can start out using EMIs. if you dont.

 

[Min Park]

@Offshorenerd @khinkali Thank you for this great info!

I am Canadian.
I am digital normand.
My income are more then 1M USD year for work i am doing.
My incomes are from clients in US/CA region only.
I want to live in EU.

1. If i open company in Georgia and buy property (to be residence), in EU boarders are open how they can know if i was there 183 days? I want to live in Romania/Austria but pay CIT and dividends tax like Georgia
2. How easy is to get open company and bank account and start getting bank wire from US/CA ?
3. Can you recommend on accounting office that do that job ?

Thank's.

 

[Konstanz]

@Offshorenerd @khinkali Thank you for this great info!

I am Canadian.
I am digital normand.
My income are more then 1M USD year for work i am doing.
My incomes are from clients in US/CA region only.
I want to live in EU.

1. If i open company in Georgia and buy property (to be residence), in EU boarders are open how they can know if i was there 183 days? I want to live in Romania/Austria but pay CIT and dividends tax like Georgia
2. How easy is to get open company and bank account and start getting bank wire from US/CA ?
3. Can you recommend on accounting office that do that job ?

Thank's.

The question is to have Schengen visa for you as Canadian.
Georgia is not part of Schengen or EU. Once you enter or exit EU you will have to pass immigration.
If somebody checks, you will have to prove that you lived in Georgia. Also your home country could raise these questions..

 

[Traveler]

@Offshorenerd @khinkali Thank you for this great info!

I am Canadian.
I am digital normand.
My income are more then 1M USD year for work i am doing.
My incomes are from clients in US/CA region only.
I want to live in EU.

1. If i open company in Georgia and buy property (to be residence), in EU boarders are open how they can know if i was there 183 days? I want to live in Romania/Austria but pay CIT and dividends tax like Georgia
2. How easy is to get open company and bank account and start getting bank wire from US/CA ?
3. Can you recommend on accounting office that do that job ?

Thank's.

Not sure what you're trying to do here but you seem to be missing a couple of very important pieces in your equation. My recommendation is to look up how tax residency works, or better, consult with a professional. But in short - regardless of whether you trigger the Georgian tax residency or not (this can be done by either staying 183 days in a calendar year in Georgia OR by qualifying for the High Net Worth Individual programme, which has no physical stay requirement), what you're suggesting would trigger tax residency also in Romania/Austria, and unless you live physically in Georgia and can prove it, they won't give your Georgian tax certificate any consideration. When it comes to the taxation of your entity, look up the concepts of CFC and PE.

But to answer your other question:

2. How easy is to get open company and bank account and start getting bank wire from US/CA ?

A personal account: very easy to open (just walk into any bank with your passport), but be prepared to have it frozen as soon as any significant funds are remitted to it. Especially if the funds are in USD. At that point, you will have to make sure that your business is clean and straightforward enough for the bank to understand and accept it.

A corporate account: virtually impossible these days unless you can demonstrate significant economic substance (a real connection to Georgia) AND the business is incredibly clean and straightforward/understandable. If either of these is a 'no' then be prepared to get a fast rejection from every single bank.

 

[JohnLocke]

Im a foreigner here. Its true that banks might close/not open accounts if you dont have a local connection, but I do.
You can start out using EMIs. if you dont.

What EMI would you suggest for a company in Gerogia (beside Transferwise) ?

 

[Offshorenerd]

What EMI would you suggest for a company in Gerogia (beside Transferwise) ?

Paysera works good for me.

 

[Momentum]

Hi everyone,

I'm a new member here, and see a lot of useful information, great contributions. Thank you.

I want to ask for some information please.

I work online and have heard about the "Independent Entrepreneur" option, as opposed to registering a company (I don't need a company as I don't invoice anyone for my income). The low tax percentage I read about, is also more favorable than a company it seems.

Could someone tell me how to go about registering as an Independent Entrepreneur, and based on that, apply for a residency permit in Georgia?

I would appreciate any information, requirements and steps I need to take and be aware of.

Thank you in advance.

 

[Traveler]

Hi everyone,

I'm a new member here, and see a lot of useful information, great contributions. Thank you.

I want to ask for some information please.

I work online and have heard about the "Independent Entrepreneur" option, as opposed to registering a company (I don't need a company as I don't invoice anyone for my income). The low tax percentage I read about, is also more favorable than a company it seems.

Could someone tell me how to go about registering as an Independent Entrepreneur, and based on that, apply for a residency permit in Georgia?

I would appreciate any information, requirements and steps I need to take and be aware of.

Thank you in advance.

Firstly, some corrections:

* The Individual Entrepreneur status itself doesn't provide any taxation benefits. You'll be paying the standard 20% income tax on personal level. What you're probably referring to is the Small Business Status that an Individual Entrepreneur can apply for. Upon approval, you'd indeed be taxed at 1% on turnover (not income). But there are also conditions. Primarily two: your turnover cannot exceed 500,000 GEL (approx. US $160k) for more than a year, and there's a list of prohibited activities, consulting of any kind being among those.

Also note that for a work residency permit, your employer (your own IE in this case) needs to have demonstrated at least 50k GEL in annual turnover, and at the time of applying, you need to be in the country legally and have at least 40 days left on your visa.

The registration itself (for both IE & the SBS if you qualify) is incredibly straightforward. Takes a couple of days and the cost is around 100 GEL if you do it on your own, or 500-1500 GEL if you have a professional help you (any reputable tax advisory or law firm will do), which is recommended, assuming you don't speak Georgian.