IE or LLC in Georgia: What to Choose as an Entrepreneur in 2026
The first question of anyone moving a business to Georgia: register as an Individual Entrepreneur (IE) or set up a company (LLC)? There’s no universal answer — but there is a fork that resolves in ten minutes if you honestly answer three questions: who are your clients, will you hire people, and what does risk mean to you.
The comparison on one page
| IE | LLC | |
|---|---|---|
| Tax | 1% of turnover (small business status, up to 500,000 GEL/year) | 15% of profit — only on distribution; dividends 5% |
| Liability | Personal, with all your assets | Limited to the company’s capital |
| Employees | The 1% status — only without employees | No restrictions; 20% payroll tax |
| Accounting | One monthly declaration, doable yourself | You’ll need an accountant |
| Registration | 60 GEL, 1 day | ~100–200 GEL, 1–2 days |
| Best for | Freelancers, IT, exported services | Partnerships, hiring, larger counterparties |
Why a freelancer almost always picks IE
If you work alone and provide services — programming, design, marketing — an IE with small business status is unbeatable: 1% of turnover, zero contributions, minimal accounting. An LLC at the same income means an outsourced accountant, more complex reporting and 5% on dividends when you pay yourself.
The one serious downside of an IE is personal liability: you answer for business obligations with all your assets. For services with small invoices this is rarely critical; for trade with inventory and loans it’s already an argument.
When you need an LLC
A company becomes the right choice when at least one of three things appears:
- Partners. Shares, profit distribution, a partner’s exit — in an LLC all of this is solved by the charter; in an IE it isn’t solvable at all.
- Employees. Small business status is incompatible with hired staff — if you’re hiring, you’ve outgrown the IE.
- Large counterparties and risk. Serious clients prefer contracts with a company, and limited liability protects your personal assets.
The main draw of a Georgian LLC is the Estonian profit tax model: the 15% is paid only when profit is distributed. Reinvest in growth — pay nothing. For a growing business this is essentially an interest-free loan from the state.
A separate story — IT companies: Georgia has preferential regimes for them (Virtual Zone status, International Company status) with rates below standard. That’s a topic for its own article, but if you run an IT business with foreign revenue — mention it on the consultation and we’ll run the numbers.
What both forms share
- VAT — registration is mandatory above 100,000 GEL of turnover over 12 months; exported services are generally zero-rated;
- bank compliance — checks for foreigners are equally thorough for IEs and LLCs;
- the work permit — under the labour migration law in force since 1 March 2026, a foreigner needs a proper migration status for activity in Georgia — plan it together with the registration;
- registration by power of attorney — both forms can be set up remotely.
My practical algorithm
Working alone for foreign clients → IE with the 1% status. Partners, employees or tangible risks → LLC. In doubt — start with an IE: switching to an LLC when the business grows is always possible, while maintaining a company “for future growth” is an unnecessary monthly cost.
Tell me about your situation on a free consultation — we’ll estimate the taxes in numbers for both options. And if you’re still planning the move, see how to register an IE step by step.