Georgia's Virtual Zone status is 0% on IT profit — but only if the work is genuinely done here

Andersen's guide sets it out plainly: a Virtual Zone Person pays 0% corporate income tax on profit from exporting software and digital services to clients outside Georgia. The tax appears when the money leaves the company — a 5% tax on distributed dividends, which Georgia's double taxation treaties can reduce, in some cases to nothing. Salaries are taxed normally: 20% withholding plus 2% pension contributions.

The status demands a real operational presence. The guidance requires that the IT services be delivered from Georgian territory, that the company keep local technical staff, and that the revenue come from non-resident clients. A company registered in Tbilisi whose developers all sit somewhere else, or which bills a Georgian client, is not describing a Virtual Zone Person. Failure to hold that line risks revocation of the status.

Much of the foreign demand for flats and offices in Tbilisi comes from people who moved a small software business here, and the tax regime is the reason they came. If you let to that tenant base, or sell to it, the conditions above are what keeps them in the country: local staff and local delivery mean local desks, local leases and local addresses. A tightening of those conditions would show up in the rental market before it showed up anywhere else.

Virtual Zone is one of several preferential regimes in Georgia, and switching between them is not free — the guidance notes that moving to a different preferential status triggers revocation of this one. That makes the choice a decision to take once, with advice, rather than a setting to change when a year looks better under a different label. Anyone reading this as a plan rather than as background should have a Georgian tax adviser look at the actual contracts.