Virtual Zone Status for IT Companies in Georgia

The Virtual Zone represents a special tax regime offered by the Georgian government, specifically designed for companies operating in the IT sector.
This status allows businesses to significantly reduce their tax burden if their services or products are provided exclusively to foreign clients, i.e., non-residents.

Activities Eligible for Virtual Zone Status

Companies can operate in the following areas

• Software development;
• Providing SaaS (Software as a Service) solutions;
• Other activities in the field of information technology.

Revenue generated from these activities must come from foreign clients.

If your company is registered in Georgia but provides services fully or partially to foreign clients, you can benefit from 0% corporate profit tax and 0% VAT.

Advantages of the Virtual Zone

The Virtual Zone is ideal for companies that operate in the international market and do not target local customers.

advantage	limitation
0% corporate profit tax on products and services exported abroad	Revenue received from clients who are residents of Georgia is taxed normally (15% corporate profit tax, 18% VAT).
0% VAT instead of the standard 18%	Personal income tax (20%) and pension contributions (2% + 2%) still apply to employees’ salaries
5% tax on dividends	When calculating taxes, you must consider the individual’s tax residency and international agreements
0% export tax	—
The certificate is free and there are no annual fees	The application process requires accuracy — incomplete documentation often leads to rejection
To qualify for the Virtual Zone, the company only needs to be registered in Georgia — local residency or a Georgian partner is not required	If the company’s director is a resident or tax resident of Georgia, it significantly increases the chances of obtaining Virtual Zone status
Employees can be located abroad	Having an office in Georgia or employees based locally also improves the likelihood of approval

Eligibility Requirements for Virtual Zone Status

Virtual Zone status is granted only to companies that meet the following criteria:

• Operate in the IT sector (software or technological products);
• Particularly important considerations:
  • The company can be 100% foreign-owned without any restrictions;
  • Having a resident director in Georgia or a local office significantly increases the chances of approval;
  • Company registration in Georgia is straightforward and accessible, especially compared to European countries;
• Registered as a legal entity in Georgia;
• Business activity usually falls under the NACE codes J62, J63, M73 (depending on the specific activity);
• Generate revenue from foreign clients;
• Maintain an economic connection with Georgia — either a local office or employees;
• Have a Georgian bank account and contact number (or use a local representative/accountant).

---