Micro Business, SBS, Virtual Zone, or Standard LLC: what would each actually cost you?

If you've spent any time in a Tbilisi freelancer WhatsApp group, you've seen this question asked a dozen different ways: "Should I register as an individual entrepreneur or set up an LLC?" There's no shortage of articles explaining the five ways to structure a business in Georgia. What's harder to find is a straight answer to the question that actually matters: what would each one cost you, specifically, at your real turnover?

That's the gap this guide — and the calculator at the bottom— is here to close. Here's what each structure means, with real numbers, and a tool that plugs in your own.

The five structures, in plain terms

Micro Business status. 0% income tax, but only on turnover up to ₾30,000 a year. You can't have employees, and it's not available for licensed professions (medical, legal, architecture, auditing). This is the smallest-scale option — think a hobby business or someone just starting out, not a full-time income.

Small Business Status (SBS). 1% of turnover — not profit — up to ₾500,000 a year, then 3% above that. This is registered as an individual entrepreneur. Like Micro Business, it's closed to licensed professions, and consulting activities specifically are excluded — if your work is general consulting rather than a clearly defined service, SBS likely isn't available to you and it's worth a professional opinion before you commit to a structure. This is the workhorse status for most freelancers and solo consultants once they're past hobby-income levels.

Virtual Zone (VZ) company. 0% corporate tax on profit — but there's a catch almost nobody mentions upfront: when you actually pay yourself the money as a dividend, a 5% dividend tax applies. So it's not "0% tax," it's "0% until you take the money out, then 5%." VZ also has real eligibility requirements: you need a Georgian LLC (individual entrepreneurs can't use it — VZ is only open to legal entities), you need to be providing IT or software services, and your clients need to be outside Georgia — a Georgian client's income doesn't qualify.

Standard Individual Entrepreneur. 20% flat tax on net profit (turnover minus expenses). No turnover cap, no activity restriction — this is the fallback everyone lands on if nothing else fits, including licensed professionals who can't use Micro Business or SBS.

Standard LLC. 15% tax on distributed profit. This is what an LLC owner pays if they don't qualify for Virtual Zone — for example, an LLC serving Georgian clients, or a non-IT business.

What this looks like with real numbers

Take a freelance developer turning over ₾60,000 a year, with roughly 30% in deductible expenses (so ₾42,000 profit):

At this turnover level, Small Business Status is dramatically cheaper than the standard 20% rate — that gap is exactly why so many freelancers ask about it. But SBS isn't automatically the right answer for everyone: an IT company serving only foreign clients through a Georgian LLC could do better still under Virtual Zone, and a licensed professional (lawyer, doctor, architect) can't use SBS or Micro Business at all and needs to compare Standard IE against Standard LLC instead.

The problem with a table like this one: it uses one example turnover, one example expense ratio, and one example activity type. Change any of those three things and the cheapest structure — sometimes even which structures you're eligible for at all — changes with it. That's the part a static comparison article can't do for you.

Try it with your own numbers

Rather than re-reading five sets of rules and doing the arithmetic by hand, the Structure Decision tool takes five inputs — your activity type, who your clients are, your turnover, your LLC status, and whether you have employees — and shows you every structure you're actually eligible for, what each would cost you at your real turnover, and which one comes out cheapest. If there's a cheaper structure one step away (for example, registering an LLC to unlock Virtual Zone), it tells you what that upgrade would save you.

It's free, takes about a minute, and nothing you enter leaves your device unless you choose to save it to a profile.

Figures are illustrative and simplified for estimation — not financial or tax advice. Rules change often; verify your specific situation with a qualified Georgian tax professional. Rates last verified July 2026.