A beautiful mountainous country along the Black Sea, Georgia is a hidden gem of Eastern Europe. This off-the-radar destination offers a set of perks so beneficial to foreign investors, entrepreneurs, and digital nomads that it has become a cult favorite for all things banking, company incorporation, and immigration.
Georgia wasn’t always like this. Although the country declared independence in 1918, it took Georgia almost a century to clean up its act and emerge as an attractive regional jurisdiction.
A few years after its independence, Georgia became part of the Soviet Union till 1991. During this era, Georgia moved away from agriculture and toward urbanization. The decade after the Soviet split proved quite turbulent for Georgia, marked by instability and conflict of all nature.
The 2003 Rose Revolution proved to be the turning point for the country. Following the revolution, the government realized the only way forward was through a healthy stream of foreign investment and interest and strengthening the private sectors.
After the revolution, the government adopted a pro-Western policy and introduced several economic and political reforms to join the European Union.
Now, almost two decades later, the country, although still pretty off-the-radar, has made itself known as one of the best banking and business jurisdictions. Bordered by Turkey, Armenia, Azerbaijan, and Russia, Georgia offers an attractive base at the intersection of Asia and Europe for investors who want to access both markets.
Before we jump into the details of establishing a second residence in Georgia, let’s discuss some perks and benefits Georgia offers foreigners looking to visit or move to the country.
Georgia is one of the most beautiful countries in Eastern Europe. Georgia’s capital, Tbilisi, is a beautiful blend of ancient and contemporary, offering the best of both worlds.
Georgia offers everything from churches nested in the Caucasus mountains to scenic highways and cave monasteries. The country is also known as one of the oldest wine regions in the world, with the most beautiful wineries you’ll ever see anywhere.
Georgia is a must-visit destination with its seaside attractions, beautiful rivers, and magnificent mountains.
Rich History and Culture
Georgia is one of the oldest countries in the world with significant historical importance for Christians. The oldest church in Georgia dates back to the 6th century. Georgia boasts monasteries and churches that are part of the UNESCO World Heritage sites.
Tbilisi, the capital city, was founded in the fifth century AD by King Vakhtang. While on a hunting trip, the king discovered hot springs in an area, after which he ordered a city (Tbilisi) to be built around those springs. Thus the name of the city, Tbilisi – a warm place.
Georgia is full of ancient stories, myths, and folklore. Throughout the country, especially the capital, you can see remnants of its diverse history under the Persian, Turkish, and Soviet Empires.
Although natural beauty and rich culture are essential parts of a relocation plan, they do not constitute the entirety of it. Many other factors come into play while choosing a place for permanent or temporary residence. Whether the destination offers any tax benefits is one of the primary concerns.
Georgia is not a tax haven, nor is it tax-free by any chance but what the country offers is the next best thing. It has a simplified territorial tax regime with lower rates than most Eastern and Western European countries.
The following are the Georgian tax rates:
- Income Tax: 20 percent
- Value-added Tax: 18 percent
- Corporate Tax: 15 percent
- Capital Gains and Interest: 5 percent
- Property Tax: 1 percent
Foreign income is tax-exempt, even if you are a Georgian tax resident. Moreover, the country has a special tax residence route for high-net-worth individuals who don’t want to spend 183 days a year in Georgia. By establishing tax residency status in Georgia, you can be eligible for the country’s tax benefits.
According to the Henley and Partners Global Passport Index, the Georgian passport allows visa-free travel to 116 countries, including Germany, Iran, Turkey, etc. Georgia lies at the intersection of Asia and Europe, offering a primary base to access both continents and their markets.
As a Georgian citizen or resident, you will be able to enjoy the country’s rich culture, history, and exquisite cuisine. Moreover, you will have access to the country’s world-renowned banking system, business environment, and investment opportunities. Georgia also offers affordable living costs and boasts a low crime rate.
You can be granted Georgian citizenship through naturalization if you legally reside in Georgia for ten years, among other requirements. The Presidential order authorizes the decision to grant Georgian citizenship.
Bring Along Your Tribe
Obtaining a Georgian residence permit comes with a host of benefits for you and your family members. The country offers “residence permits for family reunification” for your family members who are in your guardianship or entirely dependent on you.
Georgia also allows you to facilitate Georgian visa applications for other foreigners by filing invitation letters for them. In addition, obtaining a temporary or permanent residence permit in Georgia is quick and stress-free.
Now that we know the significant benefits of becoming a Georgia resident let’s see how you can become one.
How to Get a Second Residence in Georgia
Georgia offers multiple residence permits to foreign investors, entrepreneurs, and digital nomads looking to establish residency in the country with a path to citizenship. The government also has a tax residency route for high-net-worth individuals looking to yield Georgian tax benefits without spending half a year there.
The country offers the following significant routes for residence permits:
- Investment Residence Permit (Permanent)
- Short Term Residence permit (through Real Estate Ownership)
- Work Residence Permit (Temporary)
Investment Residence Permit
Georgia offers a residence-by-investment program for wealthy individuals seeking permanent residency. Under the program, the foreign investor is issued an investment residence permit for five years.
After five years, you are granted permanent residence. The holding period for investment under this route is also five years.
To qualify for an investment residence permit, you must invest in one of the following routes:
- Real Estate
- Business/Company Formation
Obtaining Investment Residence Permit through Real Estate
To qualify under this route, you must invest USD 300,000 (equivalent in GEL) in Georgian real estate. Moreover, you must invest in residential or commercial real estate, not agricultural land.
You must also own the property for five years to maintain your residence permit. Otherwise, it will be revoked. However, you can sell your land and buy another Georgian property of similar or greater value.
Obtaining an investment residence permit through real estate is one of the most straightforward routes for foreign investors seeking permanent residency in Georgia.
Obtaining Investment Residence Permit through Company Formation
To obtain an investment residence permit through company formation, you must register a company in Georgia and invest USD 300,000 in it. The investment could be in the form of purchasing real estate for running the business, putting money on the company’s term deposit, etc.).
After you are granted the investment residence permit, your company must prove an annual turnover of USD 50,000 for the first year, USD 100,000 for the second year, and USD 120,000 for the upcoming years till the five-year mark is up. After which, you will be granted a permanent residence permit.
A permanent residence application has to be accompanied by written recommendations issued by the members of the Georgian government or three Georgian citizens who also represent business entities.
The permanent residence status is for life. However, the residence cards must be renewed every five years.
Short-Term Residence Permit
The short-term residency route is pretty similar to the real estate route under the Georgian investment residency program.
To qualify for the short-term residence permit, you must purchase residential or commercial land (not agricultural) worth over USD 100,000 in Georgia. The short-term residence permit is issued for one year.
However, you can renew it each year for another year of validity for five years. After which, you will be eligible for permanent residence.
The real estate’s market value should be determined by a certified appraiser of an accredited entity. Moreover, you must hold your investment for five years to be eligible for permanent residence.
The investment residence permit and the short-term residence permits are best for international investors and entrepreneurs looking to invest in a booming real estate market or incorporate a business in a business-friendly jurisdiction with low corporate rates.
Work Residence Permit (Temporary)
Obtaining a work residence permit is another option for business people who want to invest less than USD 300,000 in Georgia but still yield the benefits of Georgia’s favorable business and investment environment.
A work residence permit is typically issued for six months and can be extended for another five years. After which, it can be converted to permanent residence.
As with several immigration policies of Georgia, if you are a citizen of any western country, you will be favored over other applicants in the immigration pipeline.
For example, if you are a US national, you will be issued a work residence permit for five years instead of six months (as in the case of other foreign individuals).
If you are a non-US national, you can obtain a five-year residence permit if you show that you own an operating company, have Georgian employees, an office building, have an annual turnover, etc.
According to the new Georgian policies, your company must have a minimum annual turnover of GEL 50,000 (USD 20,000) before you submit the residence application.
There are no turnover requirements to maintain the business. Instead, it is only required to sponsor the company director for legal residence.
Physical presence for residence application is mandatory, so you can’t apply for Georgian residence permits remotely. However, you can also apply for residence through power of attorney.
It’s possible to apply remotely for the extension of residence permits, except for the first time. You must also be physically present in Georgia to receive your residency card.
Tax Residence for High-Net-Worth Individuals
In normal circumstances, you would be eligible to apply for tax residency in Georgia if you spend 183 days in the country in a consecutive twelve-month period.
It is an excellent option for people willing to spend that time in Georgia. However, not everyone wants to spend half a year in a small Eastern European country.
For people seeking Georgian tax residency but not willing to invest the time, the country has a particular route – tax residence for high-net-worth individuals.
To qualify as a high-net-worth individual per Georgian policies, you must:
- own assets worth more than GEL 3,000,000, or
- have an annual income over GEL 200,000 in each of the last three years
To qualify for tax residence as a high-net-worth individual, you must:
- Be a legal resident of Georgia (own a residence permit)
- have a Georgian-sourced annual income of over GEL 25,000
Once you’ve been deemed eligible by the Revenue Service of Georgia, your case is forwarded to the Georgian Ministry of Finance.
The Ministry then issues you a tax residency certificate and a nine-digit tax identification number. The tax residency certificate is issued for one tax year.
How to Get a Second Residence in Georgia – FAQs
Yes, Georgian citizenship can be acquired through naturalization. To be eligible for naturalization, you must:
have legally resided in Georgia for the last ten consecutive years up to the day of citizenship application
Know the official language of Georgia to the extent described in the law
Know the history and law of Georgia to the extent described in the law
Have a job, own real estate in Georgia, run a business in Georgia, or hold interest or shares in a Georgian entity.
No, Georgia doesn’t have a citizenship-by-investment program.
Should You Establish a Second Residence in Georgia?
Considering its tax benefits, business-friendly environment, investment opportunities, and quality of life, Georgia is one of the best residence options for foreign investors.
The country provides an excellent base at the intersection of Asia and Europe and allows you a tax-friendly environment to carry on your business.If this article has sparked your interest in Georgia and setting up a second residence in the country, set up a call with us. We’ll deal with all the legalities so you don’t have to.