Virtual Zone pays 0% on profit and 20% on wages. International Company status flips it.

A Virtual Zone Person pays no corporate income tax on qualifying IT income, 20% wage tax, 5% on dividends and property tax of up to 1%. An International Company pays 5% corporate income tax, 5% wage tax, nothing on dividends and no property tax other than on land. A plain Georgian company, for comparison, pays 15%, 20%, 5% and up to 1%. Put the two special regimes next to each other and the trade is visible: Virtual Zone forgives the profit tax and taxes your staff normally, while International Company status taxes the profit lightly and cuts payroll tax to a quarter of the standard rate. If you run a small team and take money out as dividends, the first shape suits you. If payroll is your main cost, the second one does.

International Company status requires two years of relevant experience, although the experience of a foreign parent or head office can be counted, and it requires employees to be physically present in Georgia for most of the tax year. Virtual Zone status is looser on both counts: the two-year rule is not strictly enforced in practice, and under current Revenue Service guidance local presence is not strictly required provided staff are paid at market level and taxed at source in Georgia. International Companies draw their list of qualifying activities from Government Decree No. 619 and may not let ancillary income exceed 2% of eligible IT income; Virtual Zone covers software development and supplementary services, with licensing potentially qualifying where the software was developed in Georgia and comes with post-sale support. Both regimes assume the same basic story — work performed in Georgia, sold to clients abroad.

Zero is not the whole bill. A Virtual Zone Person stays liable for other taxes, including 4% pension contributions and withholding on royalties and certain service fees, and the exemption only covers IT income supplied outside Georgia — revenue from Georgian clients is taxed at ordinary rates. An International Company can reduce its corporate tax base by salaries paid to Georgian citizen tax residents and by eligible research and development spending. Only a Georgian LLC or joint-stock company can hold Virtual Zone status; an individual entrepreneur cannot. The application goes to the Ministry of Finance after the company is registered and its tax profile activated; the statutory review period is 10 days, in practice around 20 working days to a month, and the Revenue Service issues the certificate within two working days of approval, with no expiry date on it.

Two honest warnings. First, the status can be withdrawn and tax assessed retroactively if the conditions turn out not to have been met, so the paperwork matters: export contracts, invoices, acceptance acts, foreign payment records, and separate accounting for foreign and Georgian revenue. Second, the comparison above comes from practitioners who sell these services, not from the statute book, and the Revenue Service's Virtual Zone guidance is internal rather than published. One of the sources describes the International Company's 5% as applying to distributed profits in one place and to corporate income tax generally in another — exactly the kind of detail that decides whether a structure works. Confirm the rates and the conditions with the Revenue Service or a Georgian tax adviser before you register anything. We are not tax advisers and this is not advice.