Georgia Company Types 2026: LLC vs Individual Entrepreneur

Georgian law offers six ways to do business, and a foreign founder realistically chooses between three. The question is rarely "which company", it is "company or individual entrepreneur", because the regime that makes Georgia famous, the 1% tax, belongs to the second.

This guide sets out each form as the Law on Entrepreneurs defines it, the conditions of the small business status as the Tax Code writes them, and the decision a non-resident founder actually faces.

GEL 0minimum capital of a limited liability company

100kGEL, minimum capital of a joint-stock company

1%turnover tax of a small business, individuals only

500kGEL, yearly ceiling of the 1% status

The forms the law recognises

The Law of Georgia on Entrepreneurs, No 875 of 2 August 2021, in force since 1 January 2022, lists them in Article 2. Business can be carried on by an individual entrepreneur or by a company, and five legal forms count as companies.

Two other vehicles sit outside this list and come up in every conversation.

• A branch of a foreign company. It is not a legal person and is registered as an extension of the parent abroad (Article 15).
• Tax statuses such as small business, international company or the zones. They are not legal forms. They attach to a form you have already chosen, and the company ones are covered in the corporate tax guide.

The limited liability company, the default

The LLC is the form most foreign founders end up with, for reasons the law makes plain.

• No minimum capital. The amount is whatever the instrument of incorporation says, and it is kept in lari.
• One owner is enough. A single shareholder, natural or legal person, Georgian or foreign.
• One director is enough, and formation guides report no residence requirement for the director, a point covered in the non-resident guide.
• Liability stops at the company. Creditors of the business cannot reach the owner's personal assets, outside fraud and similar cases.
• Profit is taxed when it leaves. 15% on distribution, then 5% withholding on the dividend. Nothing is due while profit stays in the company.

The instrument of incorporation must be in writing and signed by every founder. The signatures are notarised, certified by the National Agency of Public Registry, or signed electronically, and a representative needs a notarised power of attorney (Article 4). That is what makes registration from abroad possible, as set out in how to register a company in Georgia.

The individual entrepreneur and the 1% status

An individual entrepreneur is a person registered for business, not a separate entity. The law is blunt about the consequence: the entrepreneur is liable to creditors "with all his/her assets" (Article 2(5)).

What draws people to this form is the small business status in Articles 88 to 90 of the Tax Code.

JanuaryYear starts at 1%

Month XGross income passes GEL 500,000

Month X to DecemberTaxable income taxed at 3%

Next JanuaryBack to 1%, status kept

Second year overStatus revoked from the following January

1. JanuaryYear starts at 1%
2. Month XGross income passes GEL 500,000
3. Month X to DecemberTaxable income taxed at 3%
4. Next JanuaryBack to 1%, status kept
5. Second year overStatus revoked from the following January

Where the guides disagree on the 3%

Formation guides describe the rate above GEL 500,000 in two different ways.

• "Only the excess is taxed at 3%." Andersen's 2026 guide puts it this way.
• "The whole year's turnover moves to 3%." Other summaries read it so.
• What the law says. Article 90(2) applies 3% to taxable income from the beginning of the month in which the excess is recorded until the end of the calendar year. Income earned in the earlier months stays at 1%.

The difference is large for a business that crosses the line early in the year. Model it month by month, not on the annual total.

Activities that cannot use the status

The Government sets the list by resolution. As published by Andersen in September 2026, it excludes in particular:

• legal and notarial services, tax advice and audit;
• medical and architectural work;
• consulting and financial services, including currency exchange and intermediation;
• gambling and excise goods;
• staffing services;
• most activities that need a special licence.

The Law on Entrepreneurs points the same way from another angle. Its Article 3 says that artistic, scientific, medical, architectural, legal, arbitration, mediation, notarial, audit or consulting activities of natural persons are not business activities, while allowing these free professions to use an entrepreneur's legal form. A management consultant who planned on 1% should read that twice.

The joint-stock company and the partnerships

These forms exist for situations most foreign founders do not have.

• Joint-stock company. Built for many shareholders and, if needed, a public listing. The law sets a floor of GEL 100,000 of subscribed capital at registration (Article 156(1)).
• General partnership. Partners answer personally and jointly for the debts. It suits professionals who already trust each other, not a founder abroad.
• Limited partnership. At least one partner answers personally, the others up to their contribution. It has investment uses and little else for a small business.
• Cooperative. Designed for members who use its services. It is outside the scope of a formation plan.

The JSC floor, where sources differ

Some guides quote GEL 50,000 as the minimum capital of a Georgian JSC, others give no figure. Article 156(1) of the Law on Entrepreneurs sets GEL 100,000 at the moment of registration. Use the law's figure when budgeting.

The branch of a foreign company

A founder who already runs a company abroad can register a Georgian branch instead of a new company.

The certification of the parent's documents is the slow part. A foreign registry extract usually needs an apostille or legalisation and a translation, which is why most small founders choose a new LLC instead.

How to choose

1. 1
   Will you work alone, without partners or investors?If not, choose an LLC
2. 2
   Is your activity outside the excluded list, and is the income Georgian-source?If not, the 1% status will not apply; choose an LLC
3. 3
   Will turnover stay under GEL 500,000 and can you accept personal liability?If yes, an individual entrepreneur with small business status fits
4. 4
   Do you already own a company abroad and only need a presence?Then compare a branch with a new LLC

In practice the choice settles into four profiles.

• Freelancer living in Georgia, eligible activity, under the ceiling: individual entrepreneur with small business status.
• Consultant, lawyer, auditor or architect: an LLC, since the 1% status is closed to these activities.
• Founder with partners, staff or profit to reinvest: an LLC.
• Existing foreign company testing the market: a branch, or an LLC owned by the parent.

The non-resident angle (who can be director, what the bank expects) is in the non-resident guide.

Common mistakes

• Registering an LLC to get 1%. The status is for natural persons only.
• Assuming foreign clients are covered by the 1%. The base is Georgian-source income. Whether your income qualifies depends on where the work is done, which is covered in the tax guide for non-residents.
• Choosing the individual entrepreneur for a risky activity. Liability reaches everything you own.
• Budgeting a JSC on GEL 50,000. The law says GEL 100,000.
• Ignoring the month rule. Crossing GEL 500,000 in March costs far more than crossing it in November.