Georgia has emerged as a top destination for international businesses looking for to benefit from its favorable tax regime and business-friendly environment. The International Company (ICS) status in Georgia offers significant advantages, such as reduced taxation and streamlined operations. This status is designed for companies engaged in specific sectors, including IT, digital products, and consulting, making it an ideal choice for technology-driven businesses. Here’s how you can unlock the opportunities ICS status offers.
What is an International Company (ICS) in Georgia?
An International Company in Georgia operates under government-established guidelines that allow businesses to enjoy reduced tax rates and an efficient regulatory environment. According to Decree N619 (October 2020), ICS status is available to companies whose income is derived exclusively from activities specified by Georgian authorities. This status offers substantial tax incentives, making it an attractive option for businesses in the technology, IT, and digital sectors.
Permitted Activities for International Companies
ICS companies can engage in a range of activities, particularly in the IT and digital sectors, including:
- Software Publishing (such as games and other applications)
- Computer Programming and Consulting
- Digital Product Creation (including web hosting, online services, and remote technical support)
These activities present abundant opportunities for growth, especially in the expanding digital economy.
Eligibility Requirements for ICS Status
To qualify for ICS status, companies must meet specific criteria:
- Experience: At least two years of experience in the relevant activity.
- Non-Resident Representation: If the business represents a foreign entity, the parent company must also have two years of experience in the same field.
- Local Operations: The company must conduct significant revenue-generating activities in Georgia, employing skilled personnel to manage its operations.
By meeting these criteria, businesses ensure their eligibility for ICS status and can begin benefiting from the associated advantages.
The ICS Application Process
The process of obtaining ICS status is straightforward:
Submit Application: Companies must apply to the Revenue Service of Georgia, submitting all required documentation, including proof of relevant activities.
Government Evaluation: The Georgian government will evaluate the application and typically provide a final decision within 10 business days.
Approval and Compliance: If approved, ICS status is granted, and the company must continue to meet the activity requirements to maintain the status.
Once granted, ICS status is indefinite, subject to compliance with Georgian regulations.
Tax Benefits of ICS Status
One of the most attractive features of ICS status is the reduced tax rates, which significantly lower the cost of doing business in Georgia:
- Corporate Tax: A 5% tax on profits, offering substantial savings for businesses.
- Employment Income: Employee salaries are taxed at just 5%.
- Dividends: ICS companies are not taxed on dividends paid to shareholders.
- Property Tax Exemption: Exemption from property taxes (excluding land) for properties used in permitted activities.
These tax incentives create a highly attractive environment for international businesses looking to expand into Georgia.
Maintaining ICS Status
To maintain ICS status, businesses must ensure that no more than 2% of their income comes from non-permitted activities in any given year. Additionally, companies must adhere to Georgian banking regulations and provide ongoing documentation when requested by the authorities.
Revocation of ICS Status
Georgia can revoke ICS status if:
- The company exceeds the 2% threshold for non-permitted activities.
- The company fails to meet the established criteria or engages in unauthorized activities.
Therefore, maintaining compliance with Georgian laws is essential to retain ICS status.
A Gateway to Business Success
Obtaining International Company Status in Georgia offers unparalleled tax incentives, simplified operations, and a conducive environment for growth, particularly in the IT and digital sectors. With reduced taxation and clear operational guidelines, Georgia is quickly becoming a hub for international enterprises.
If you’re looking to expand your business into Georgia, ICS status could be the key to unlocking new opportunities. Contact us today to learn more about how we can help you navigate the process and set your business up for success in this dynamic market.
Ready to unlock the benefits of International Company Status in Georgia?
კონტაქტი Nomos Georgia today to get expert guidance on setting up your business and securing ICS status. Let us help you navigate the process and take full advantage of Georgia’s tax incentives and business opportunities. Reach out now to start your journey towards success!
For more information about our services, visit Nomos Georgia Legal Services.
