Georgia Opportunities for IT Professionals

Georgia is a small country in the Caucasus, which is successfully fighting for world recognition as the birthplace of wine, it was here that 8 years ago they knew how to make this intoxicating drink. Georgia is also known for its hospitality, cuisine and beautiful natural scenery. How can it be useful for freelancers and companies working in the field of IT technologies?

Preferential taxes for IT companies

Today, Georgia is not a leading state in the field of computer technology, rather the opposite. An attempt to change the state of affairs was made in 2011, when the Law of Georgia “On Information Technology Zones” came into force. In accordance with this regulation, all companies involved in the field of information technology have the opportunity to reduce their taxation, but subject to the sale of products abroad. In this case, they were exempted from paying:

• corporate income tax - 15%;
• VAT - 18%;
• export payments.
• The only tax paid by IT companies that have the status of a virtual entity is 5% when paying dividends to owners. If there are employees, the following is also withheld:
• 20% - income tax;
• 4% - contribution to the Pension Fund (only from residents of Georgia).

However, the prospect of tax cuts did not attract "crowds" of computer companies to the country. But still, the opportunity to reduce the fiscal burden has become an interesting opportunity for IT specialists from neighboring countries (for example: from Ukraine, Russia, Armenia) who want to change their country of residence for a long period or for a short time. What actually contributed:

• geographical proximity;
• lack of communication problems, many Georgians understand and speak Russian;
• no need to apply for a visa - you can live, work and study in Georgia for 1 year, and then you can cross the border and live here again for a year.

How to register a computer company in Georgia

It will be possible to register an IT company, an analogue of an LLC in Georgia, in 1 day at the House of Justice. The cost of urgent registration is 200 GEL (on the day of application), if the extract from the register of company registration is taken the next day - 100 GEL.

The only difficulties that a foreigner will face are filling out documents in Georgian and providing confirmation of the legal address. But with the help of special companies, these problems are not difficult to overcome. Next, with an extract of company registration, you should visit the tax office, where they will give you a name and password to access your personal account. The latter is used for filing reports, and it also displays information about tax liabilities, payment terms and payment amounts.

At the next stage, the company needs to obtain the certificate "Persons of the virtual zone". It is in its presence that it will be possible to take advantage of preferential taxation. You need to apply for a special status here. On the site, you need to fill out a short application (in Georgian). Further, within 2-14 days, a link to download the certificate "Persons of the virtual zone" will be sent to your e-mail. It is valid for one year, after which you need to apply again.

As you can see, registering an IT company in Georgia is not at all difficult, and the procedure itself will not take much time. But the main problem in the country is the lack of qualified specialists. As an option, hire developers abroad. In Georgia, there is no need to obtain work permits for foreign specialists, which simplifies the recruitment process. But it is not always rational to bring employees to another country. After all, here they need to provide an appropriate level of income for normal living.

Of course, there are computer companies that have opened their divisions here, for example, Oberig IT (Ukraine).

What benefits can IT companies that open offices in Georgia receive, in addition to low taxation:

• reduction of labor costs - in the case of involving Georgian specialists in the work;
• access to foreign markets - the Georgian government has concluded free trade agreements with the EU, EFTA, CIS countries, China, Hong Kong and Turkey;
• valid agreements on avoidance of double taxation with 55 countries of the world (at the beginning of 2019);
• the ability to circumvent sanctions is relevant for companies from Russia that foreign customers do not want to work with in order not to fall under EU and US sanctions.

In addition to lowering taxation, the terms of service in Georgian banks may be of great interest among IT specialists from other countries. There are very low rates for settlement and cash services and online banking, which makes it rational to open personal accounts for individuals and corporate accounts for IT companies.

It is rational to use payment cards and personal accounts of Georgian banks to receive payments for completed orders to freelancers living in Georgia. Having moved here, you can continue to work remotely, have fairly high salaries, but at the same time spend less on food, recreation, entertainment, and even live by the sea in Batumi.
But the most interesting thing about servicing in Georgian banks is that they do not automatically transfer information to the tax authorities of other countries (Georgia is not a CRS member). That is, no one will know about any receipts to the account in the country where the client is a tax resident. And as a result, you can save on taxes.

Banking services for IT people

There are two large banks in Georgia that occupy more than 70% of the financial market - Bank of Georgia and TBC Bank. Both financial institutions are universal, have a wide branch network and may be of interest among freelancers who are planning to move to Georgia, as well as living in other countries.

IT specialists, who work for themselves, are interested from the practical point of view in the payment cards of Georgian banks. After all, they need to solve such primary tasks: how to credit the payment to the account and withdraw money, and most importantly, to ensure that the fees for banking services are as cheap as possible.

Georgian banks use the international standard of bank accounts IBAN, provide access to customer accounts using banking, and also issue payment cards of Visa, MasterCard payment systems, and the Bank of Georgia also issues American Express.

To open a personal account, a non-resident only needs to have a passport and fill out a client questionnaire.

Standard service charges at TBC Bank

What costs will a freelancer incur when using TBC Bank services:

• opening a current account - 10 GEL and monthly service fee - 0,9 GEL;
• annual fee for issuing a payment card: Classic/Standard - 30 GEL, Gold - 90 GEL, plus monthly service fee: Visa Classic / MC Standard - 2,5 GEL, Visa/MC Gold - 7,50 GEL;
• cash withdrawal at TBC Bank branches: 0,6%, min. 0,2 GEL, at ATMs of the bank and its partners - 0,2%, min. 0,2GEL;
• cash withdrawal in other ATMs: 2%, min. 3 USD/EUR or 6 GEL;
• transfers to other banks: in GEL – 0,07% min. 0,9GEL; in USD – 0,2% min. 15 USD max. 150 USD; in another currency – 0,2% min. 15 EUR max. 150 EUR;

You will be able to save money if you immediately order a package service. Within the framework of the packages, the client does not pay for opening an account, for its monthly maintenance, for issuing a card and for its maintenance.

For example, by making an annual payment for the “Status” tariff package - 170 lari (about 57,5 USD), the client will be able to save 30,8 lari: 10 lari (opening an account) + 10,8 lari (maintenance of an account for the year) + 90 lari (issuance of the Gold card) + 90 lari (annual maintenance of the Gold card). Also, in the “Status” package, transfers to other banks are cheaper: in GEL - 0,5 GEL, in USD/currency - 9,9 USD/currency.

Figuratively speaking, if a freelancer receives payment on a TBC Bank gold card, he will incur expenses: 170 GEL per year for the purchase of a package and 2% min. 3 USD for each ATM withdrawal in your home country. If he lives in Georgia, then the cash withdrawal will be 0,2%, at least 0,2 lari.

Solo premium package from Bank of Georgia

The Bank of Georgia offers IT specialists to use the SOLO Club premium service package. Its cost is only 200 USD per year, but for this money the client receives:

• American Express Platinum Card payment card;
• free cash withdrawal at all ATMs in the world;
• increased daily cash withdrawal limit - up to GEL 20;
• Priority Pass card for 5 free passes to airport lounges around the world;
• travel insurance;
• round the clock concierge services;
• participation in the loyalty program.

Not many banks in the CIS, and even more so in the EU, can boast of such affordable premium packages. For comparison, a month of service within the framework of the premium service package of Sberbank First costs 10 rubles, if the balances on all bank accounts are less than 000 million rubles. The cost of servicing within the framework of the VTB Privilege package is 15 rubles per month or free of charge, but provided that the receipts on the card are from 5 rubles or the account balances are at least 000 rubles.

Opening a personal account for non-residents in Georgian banks is not difficult and can be done remotely, without visiting the country. Stable and constant access to accounts, customers receive through the use of online banking and payment cards. It should be noted that Georgia is not a participant in the automatic exchange of financial data. Therefore, you should notify yourself about all your accounts in Georgian banks, as well as pay taxes on income.

Source: habr.com