Most people who use Georgia's 1% regime are freelancers billing clients abroad. That arrangement raises three questions the regime itself does not answer: where you are tax resident, whether your home country still has a claim on the same income, and what your clients need from you on paper.

Georgian tax residency

Registering an Individual Entrepreneur and holding small business status is not the same as being a Georgian tax resident. They are separate determinations, and you can hold the status without the residency.

The main route to Georgian tax residency is physical presence — spending more than 183 days in Georgia within a rolling 12-month period. Georgia also has a high-net-worth route with its own qualifying conditions.

Why it matters: residency determines which country has the primary claim on your worldwide income. Holding a Georgian IE while remaining tax resident somewhere else is a common and often accidental position, and it is where double taxation problems start.

Your home country may still tax you

This is the part that gets underestimated. Paying 1% in Georgia does not, by itself, discharge an obligation elsewhere. Whether it does depends on:

  • Whether you remain tax resident there. Many countries do not release residency merely because you left; some apply exit rules or continuing-ties tests for years.
  • Whether a double taxation treaty is in force. Georgia has treaties with a large number of countries, and they allocate taxing rights between the two states.
  • Whether the treaty gives credit or exemption for the Georgian tax, and how a 1% turnover tax is characterised under it. A turnover tax is not obviously an income tax, and some treaties do not credit it cleanly.

That last point deserves emphasis: the assumption that "I paid tax in Georgia so my home country will credit it" is not automatically true for a turnover-based tax. Check it against the specific treaty rather than assuming.

Permanent establishment risk

If you work from Georgia for a single foreign client under something that resembles employment — fixed hours, their equipment, their direction, no other clients — two risks appear. Your client's country may treat your arrangement as employment rather than contracting, and in some circumstances your presence can create a taxable footprint for them.

Diversifying clients, using your own equipment, controlling your own hours and invoicing for deliverables rather than time all reduce this. It is a real consideration for anyone who left a job and kept the same employer as their only client.

What clients need from you

Foreign clients usually ask for some combination of:

  • An invoice with your IE details, identification number and registered address.
  • A contract describing the deliverable. Word this to reflect what you actually produce — it matters for eligibility for the 1% regime, where "consulting" is a problem category.
  • A tax residency certificate, if they need to avoid withholding tax at source under a treaty. Issued by the Revenue Service, and only if you actually qualify as resident.
  • A W-8BEN or W-8BEN-E for US clients, declaring non-US status.

If a client withholds tax at source despite a treaty, that is usually a documentation failure rather than a legal requirement — worth resolving before the first payment rather than reclaiming afterwards.

Getting paid

Payments through Wise, Payoneer, Deel and similar are normal. Two things to keep straight:

  • Turnover is turnover regardless of route. Money that stays in a Payoneer balance and never reaches your Georgian bank is still declarable income.
  • Be consistent about the receipt date — see converting foreign income. Whichever event you treat as receipt, apply it the same way every month and be able to explain it.

Keeping a dedicated business account makes the whole picture reconstructable, which matters more than it seems until someone asks.

A realistic checklist

  1. Establish where you are tax resident — actually, not aspirationally.
  2. Read the treaty between Georgia and that country, specifically on business profits and on credit for foreign tax.
  3. Confirm your activity is eligible for the 1% regime.
  4. Set up a Georgian business account and route client payments through it.
  5. Track receipts by date and currency from month one.
  6. Get one hour with an accountant who handles cross-border cases in both jurisdictions.

The last item is the one people skip and later wish they had not. The Georgian side of this is genuinely simple; the interaction with your home country is where the money is.

Next steps