How to Register a Sole Proprietorship (Individual Entrepreneur) in Georgia

Working as an independent contractor in Georgia is increasingly appealing. Georgia offers very favourable tax regimes for small businesses and individual entrepreneurs, relatively lightweight bureaucracy, and generally fast registration processes. The main challenges include ensuring your business activity is eligible under Georgia’s tax schemes, watching turnover thresholds carefully (if exceeded, you may lose preferential status), and staying compliant with reporting and licensing requirements. The primary benefits include very low tax rates under certain regimes (as low as 1% of turnover, or 0% for very small “microbusinesses”), simplified accounting, and the ability for foreigners to register without needing full residence or citizenship in many cases.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Georgia?

In Georgia, a sole proprietorship is officially known as an Individual Entrepreneur (IE). It is not a separate legal entity: the entrepreneur is a natural person conducting business on their own, bearing all legal and financial responsibility.

Depending on context, it may also be referred to as:

• Sole trader
• Self-employed worker
• Independent contractor

These terms describe essentially the same business model: one person legally running a business without forming a company or limited liability entity.

How does a Sole Proprietorship (Individual Entrepreneur) work in Georgia?

Individual Entrepreneur vs. LLC in Georgia

When considering how to operate in Georgia, many entrepreneurs compare the Individual Entrepreneur model with alternatives like forming a limited liability company (LLC). The table below highlights the main differences to help you decide which structure best fits your business goals.

Step-by-step guide: How to register a sole proprietorship in Georgia

Step 1: Check if you are eligible to become an Individual Entrepreneur in Georgia

Any natural person can register as an Individual Entrepreneur, including foreign nationals. Residency or citizenship is not always required, though you must maintain a legal address in Georgia. To benefit from the favourable Small Business or Microbusiness tax regimes, your planned business activity must not fall under excluded categories such as legal, medical, or consulting professions.

Step 2: Choose your business name

If operating under your own name, minimal naming requirements apply. If you want a trade name (i.e., a name different from your legal name), you must ensure it is unique and register it formally through the Public Registry or Entrepreneurs Registry.

Step 3: Gather required documents

You will typically need:

• Valid passport or identity document

• Proof of legal address in Georgia (ownership/rental agreement, or landlord permission)

• Contact information (phone number and email address)

• Power of attorney if a representative is filing on your behalf

Step 4: Register with the National Agency of Public Registry

File your application with the Entrepreneurs Registry of the National Agency of Public Registry. This can usually be done in person at a Public Service Hall or through an authorised representative.

Step 5: Pay registration fees and contributions

Government fees are generally modest (26-75 GEL). Once registered, you may also have to make contributions depending on your activity. For example, under Small Business Status, you pay 1% of turnover; under the default system, you pay 20% of net profit. Payroll taxes and pension contributions apply if you employ staff.

Step 6: Complete post-registration obligations

After registration, you must register with the Revenue Service and apply for Small Business or Microbusiness Status if eligible. You will also need to file monthly or annual tax declarations, depending on your chosen regime. Maintaining accurate records is essential, as Georgian law requires you to issue compliant invoices for every transaction. These invoices must include the taxpayer number, transaction details, and client information. Businesses exceeding turnover thresholds must also register for VAT.

Financial and tax obligations for sole proprietors in Georgia

Here are key areas to watch:

• Income taxes: Standard taxation is 20% on net profit. Under Small Business Status, 1% on turnover up to 500,000 GEL annually; Microbusiness (lowest revenue) can get 0%.
• Social security/pension contributions: If you hire employees, you are responsible for payroll taxes, withholding, and pension/social security contributions. As a sole proprietor without employees, obligations are lighter.
• VAT / GST obligations: VAT rate is 18%. Sole proprietors must register for VAT if their taxable turnover crosses 100,000 GEL over any 12-month period.
• Record-keeping requirements: Even under simplified regimes, you must keep records of turnover, invoices, and receipts.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

FAQs

What is the minimum capital required to start an Individual Entrepreneur in Georgia?
There is no minimum capital requirement. You can register without needing to deposit or commit a specific capital amount.

Do Individual Entrepreneurs need to register for VAT?
Only if their taxable turnover exceeds 100,000 GEL in any 12-month period. Below that amount, VAT registration is optional or not required. Some services to foreign clients may be VAT exempt.

How much are the standard monthly or annual contributions?
If on Small Business Status, you pay 1% of turnover monthly (with monthly declarations). If not, you pay 20% on net profit annually, possibly with quarterly or annual payments depending on your setup. If hiring employees, payroll withholding and employer contributions apply.

Can an Individual Entrepreneur hire employees?
Yes. Having employees is allowed under the Individual Entrepreneur model, including under Small Business Status, though some rules apply.

How long does it take to register as an Individual Entrepreneur in Georgia?
Often registration can be done in one business day, especially if all documents are in order.

Can foreign nationals register as Individual Entrepreneurs in Georgia?
Yes. Foreigners are allowed to register as IEs. They do not necessarily need to be citizens or have permanent residency, but new rules effective from March 1, 2026 will require foreigners doing paid activity to hold a work permit and residence permit or D1 visa.

Do Individual Entrepreneurs need a separate business bank account?
It is not strictly required, but it is highly recommended for accounting clarity and easier compliance.

What happens if I stop working as an Individual Entrepreneur?
You should deregister through the Public Registry and file a final tax return with the Revenue Service.

Are there any government incentives or reduced rates for new Individual Entrepreneurs?
Yes. The Small Business Status and Microbusiness Status are such incentives, offering substantially reduced tax rates (1% or 0%) for those who qualify.

Do Individual Entrepreneurs in Georgia need to issue invoices?
Yes. Sole proprietors are required to issue invoices for each business transaction. Invoices must include the taxpayer number, client details, and a description of the service or product. This ensures proper tax reporting and compliance with Georgian law.

Can I use Deel as an Individual Entrepreneur to get paid by international clients?
Yes. As an IE you can invoice clients anywhere in the world, and Deel helps you receive payments securely.

Does Deel generate compliant invoices for Individual Entrepreneurs?
Yes. Deel automatically generates invoices that meet Georgian legal and tax requirements.

Can Deel help me with taxes as a sole proprietor in Georgia?
Yes. Deel provides downloadable payment and income records you can use when filing your tax declarations.

Does Deel offer contracts for freelancers and Individual Entrepreneurs?
Yes. Deel includes contract templates that are compliant with local laws.

Can I access benefits through Deel as an Individual Entrepreneur?
Yes. Deel offers optional perks like health insurance and retirement savings plans.