IE or LLC in Georgia in 2026: the Updated Comparison

The "IE or LLC" question in Georgia resolves faster than it looks: a solo freelancer under 500,000 GEL of annual turnover almost always wins with an IE on the 1% status, while teams, investors and bigger revenue point to an LLC. In 2026 the comparison gained a new column, the work permit for foreigners. Here is the updated breakdown.

Quick answer

Solo freelancer under 500,000 GEL a year: an IE at 1% of turnover, registered in a day, from 350 GEL all-inclusive. A team of 5+, investors, EU VAT clients or IT exports under the 5% Virtual Zone: an LLC, with no turnover cap and limited liability. For a foreigner, either path includes the work permit question — softer after the April 16, 2026 amendment than older guides suggest, and answered differently by the two forms.

Comparison table

When the IE wins

Freelancers, remote workers, marketplace sellers, consultants, photographers and videographers: anyone working alone within 500,000 GEL of turnover. The classic trap is unchanged: exceed the cap by even 1 GEL during the year and the Small Business status is annulled, with turnover recalculated at 20%. Watch the number early, not in December.

The 2026 addition is the work permit question. After the April 16 amendment a remote IE holder with foreign clients does not need it to work, but it stays mandatory for Georgian-source income and as a document for the work residence permit (200-400 GEL, up to 30 days). The full sequence is in the IE registration guide.

When the LLC wins

IT startups after the Virtual Zone (5% instead of 15%), turnover above 500,000 GEL, multiple founders, teams of 5+, and work with EU VAT payers. And a "team" is no longer required for the Virtual Zone: recent practice allows a single-member VZ company, on the conditions that the sole member lives in Georgia as a tax resident and exports IT services. Plus the argument that has nothing to do with tax: an LLC answers with its charter capital, not your apartment. For hired foreign staff, the LLC files work permits as the employer; the founder personally, after the April 16, 2026 amendment, needs no permit to own and manage their company.

Can you switch later

Yes, and it is a common route: start as an IE at 1%, grow to the cap, convert to an LLC. The transition takes 2-3 weeks and costs roughly 800-1,200 GEL. Cheaper than carrying an LLC "for growth" from day one.

Frequently asked

I work alone but expect more than 500,000 GEL. Still an IE? No: above the cap the 1% status stops working and the IE loses its main advantage. Look at an LLC, and at the Virtual Zone for IT exports.

Is the 5-employee limit for IEs real? Yes, for the Small Business status. A growing team is a signal to move to an LLC.

Which is easier for a foreigner to legalize? After the April 16 amendment the bar is low on both: a remote IE holder with foreign clients and an LLC owner need no permit to work. It returns for Georgian-source income and in the work residence permit application. The business model should still drive the choice.

Can an IE get the Virtual Zone? No, the status is granted to LLCs only. The LLC can be single-member though: a solo developer with tax residency and exports assembles a VZ without a team, and for IT founders that is a top reason to convert.

A free 15-minute consultation: we will price both scenarios for your turnover and structure. Telegram @GeoExpertsSaqartvelo or +995 551 278 585.