Foreign IT companies wishing to establish themselves in Georgia in a Virtual Zone will not pay any tax on the sales of software products and IT services only if their customers are located outside the territory of Georgia. Companies operating under this Virtual Zone status do not need to obtain a license, permit or other regulatory document.
An IT company with this virtual zone status that offers software development services (for example) to foreign customers, the income from these exports will be exempt from VAT (18%) and also from the corporate income tax (15%). All expenses that have generated revenue from the sale of software, and other computer products or services, outside or inside Georgia's borders may be deducted from the company's gross income.
Georgia is a friendly business country, very favourable to companies. Georgia is highly rated by many economic indices. The World Bank's Doing Business Index just published its new ranking in November 2018 and Georgia is now ranked sixth among countries where it is easy to do business. Georgia's low tax rate makes it the world's ninth lowest taxed economy, its efficient, transparent and strong banks make Georgia a business-friendly ecosystem.
For all these reasons, the creation of this special virtual zone status for IT companies is a clear advantage in supporting growth and helping these companies to remain competitive in an increasingly competitive technological world.
Other factors make Georgia an attractive destination for investment in the information technology sector. Its strategic location at the crossroads of Europe, Russia, the Middle East and Asia. Georgia has signed more than 30 favourable trade treaties with the EU, CIS and China that provide fair trade regimes for Georgian companies. In fact, Georgia is becoming an increasingly recognized jurisdiction for Import-Export investments and activities with these major economic entities. Georgia is an ideal location for business expansion into these markets of nearly a billion consumers.
Some examples:
A free trade regime with the CIS countries and Turkey.
A deep and comprehensive Free Trade Agreement with the EU for manufacturing and processing industries.
Free trade regime with EFTA (Switzerland, Liechtenstein, Iceland, Norway).
Preferential trade (GSP with the United States, Canada and Japan).
Georgia has also concluded 52 double taxation treaties with many countries such as France, Germany, China, UK, Singapore, Ireland among many others.
