Georgia provides a straightforward and accessible framework for those interested in operating as a sole proprietor in 2025. This article outlines the specifics of the “Individual Entrepreneur” status, detailing its availability, application process, and key tax implications for individuals conducting business in Georgia.
Availability of Sole Proprietorship in Georgia
As of 2025, Georgia officially recognizes the sole proprietorship status under the name “Individual Entrepreneur” (ინდივიდუალური მეწარმე, Individualuri Metsarme). This legal status allows any individual to engage in business activity without the need to create a separate legal entity. The process is known for its simplicity and accessibility, enabling swift market entry for individuals across a range of professional activities.
Key Features of the Individual Entrepreneur Status
- Enables individuals to invoice clients and conduct commercial operations independently
- No requirement to establish a separate limited company or corporate entity
- Application and registration are available in-person at the Public Service Hall or online
- Popular among freelancers, small traders, and service providers
Registration Process
The registration process for becoming an Individual Entrepreneur in Georgia is direct and accessible to regular citizens. Applicants can register either at a local Public Service Hall or through online government platforms. There are no publicly reported barriers for local or resident foreign individuals, and the process is widely adopted in practice.
Taxation of Individual Entrepreneurs (2025)
Individual Entrepreneurs in Georgia are subject to the general tax regime. However, those who meet specific criteria may opt for the more favorable “Small Business Status.” This choice allows for preferential tax rates specifically designed to support micro and small business activity.
| Status | Annual Income Threshold (GEL) | Tax Rate (%) | Explanation |
|---|---|---|---|
| Individual Entrepreneur (General Regime) | – | Variable (according to general personal income tax rates) | Subject to standard tax regime. No special reductions. |
| Individual Entrepreneur (Small Business Status) | Up to 500,000 GEL | 1% | Preferential fixed rate for eligible income up to threshold. |
| Individual Entrepreneur (Small Business Status) | Above 500,000 GEL | 3% | Higher rate applies to income exceeding 500,000 GEL. |
Exchange rate for USD conversions (2025): 1 GEL = $0.37; 500,000 GEL = $185,000 (approx.)
Small Business Status: Eligibility and Practical Application
The Small Business Status is potentially available to any Individual Entrepreneur whose qualifying annual income does not exceed 500,000 GEL ($185,000). Eligible entrepreneurs automatically benefit from the 1% rate on income within that bracket, and a 3% rate is applied to any income above the threshold. This system is particularly attractive for independent professionals and microbusiness owners aiming to optimize their tax burden without complex structures.
Who Commonly Uses the Status?
- Freelancers operating in technology, design, or consultancy
- Small-scale merchants and traders
- Service providers, including hospitality, transport, and personal services
Summary Table: Key Conditions for Sole Proprietorship in Georgia (2025)
| Feature | Description |
|---|---|
| Status Name | Individual Entrepreneur (ინდივიდუალური მეწარმე) |
| Registration Channels | Public Service Hall (in-person), official government online platform |
| Legal Entity Required? | No separate legal entity required |
| Main Tax Regimes | General regime or Small Business Status (1%/3%) |
| Eligibility for Small Business Status | Annual business income ≤ 500,000 GEL |
| Typical Users | Freelancers, micro-entrepreneurs, service providers |
Pro Tips for Georgia Sole Proprietorships
- Verify your eligibility for Small Business Status during registration—it dramatically reduces your effective tax rate if your annual business income stays within the stated threshold.
- Keep meticulous business records, especially if you expect your revenue to approach 500,000 GEL, as exceeding this amount will trigger the higher rate on surplus income.
- Consider registering online for speed and convenience, as the process is digitized and widely used by locals and foreigners alike.
- Always review the latest official updates directly from the Revenue Service and Georgia’s e-Government portal to stay compliant with current requirements.
Official Information Sources
For 2025, Georgia continues to offer an accessible sole proprietorship regime under the Individual Entrepreneur status. With a streamlined registration process and notably attractive tax rates—particularly under Small Business Status—individuals benefit from greater operational flexibility than is common in most countries. The system is widely adopted and favored by those seeking a low-bureaucracy, pro-business environment, but it’s essential to stay attentive to relevant thresholds and compliance requirements to retain eligibility for optimal tax treatment.