International Company Status is the regime most guides quietly merge with Virtual Zone status, and the two are not the same thing. Both apply to IT companies, both beat Georgia's standard 15% corporate rate by a wide margin, and that is roughly where the similarity ends. International Company Status asks for two years of genuine trading history and a real Georgian team before it grants anything, and in exchange it hands over a rate package, 5% on profit, 5% on payroll, 0% on dividends, that a brand-new company cannot touch. Here is what the status actually requires, what it actually pays, and who it is genuinely built for.
International Company Status is not Virtual Zone status
International Company Status and Virtual Zone status both give an IT company a rate far below the standard 15%, and that is where the resemblance ends. Virtual Zone requires no trading history at all and taxes qualifying export income at a flat 0%. International Company Status requires at least two years of genuine experience and real local substance, and in return it charges 5% on profit, 5% on payroll, and 0% on dividends - a broader, more formal package built for an established company rather than a first-year one. Confusing the two is the single most common mistake in this part of Georgian tax, and it leads people to apply for the wrong one or assume they qualify for something they do not.
International Company Status is defined in a dedicated government ordinance and given its statutory tax treatment in Article 23 of the Tax Code of Georgia, separate from the Law on Information Technology Zones that governs Virtual Zone. They sit under the same general heading, preferential regimes for Georgian IT businesses, but they are two different applications with two different eligibility tests and two different rate structures. We compare the two head to head, including which one a growing company should actually pick, in Virtual Zone status and in the full Georgia tax regime comparison.
Who can actually apply: the two-year experience requirement
The eligibility bar here is the opposite of Virtual Zone's. Where Virtual Zone accepts a company with no trading history at all, International Company Status is only open to an applicant that can show at least two years of genuine experience carrying out the permitted activities, and the ordinance gives three separate routes to satisfying that test:
- The Georgian applicant enterprise itself has at least two years of documented experience in a permitted activity.
- The applicant is a representative of a non-resident enterprise in Georgia, and that non-resident enterprise has at least two years of experience in a permitted activity.
- More than 50% of the applicant's shares are owned by a partner enterprise, or enterprises, that meet the two-year experience test.
That third route matters more than it looks. It means an established foreign software company that sets up a Georgian subsidiary does not need to wait two years from the Georgian entity's own incorporation date, provided the parent's own track record is documented and the ownership threshold is met. A genuinely new company with no group history, and no representative relationship to an experienced non-resident, has no route around the two years. That is the reason Virtual Zone rather than International Company Status is the only realistic preferential option for a first-year IT company, however strong its product already is.
Real substance: what the law actually demands
Virtual Zone's substance test has tightened through enforcement over time, without the statute itself changing much. International Company Status writes the substance requirement into the eligibility conditions directly, which is a meaningfully different starting position.
The ordinance requires the applicant to carry out its basic income-generating activities in Georgia itself, and to have adequate human resources with the necessary qualifications to carry out those activities, alongside operating costs consistent with genuinely running the business here. That is three separate things a reviewer can check: where the actual work happens, whether the people doing it are qualified for it, and whether the company's cost base looks like a real operation rather than a shell wrapped around a certificate.
In practice this means a company applying for International Company Status should already be able to show payroll records for genuinely qualified staff working from Georgia, office costs and other overheads consistent with real activity, and a client and revenue history that traces back to the same team doing the same work the application describes. None of this is exotic if the company has genuinely been operating in Georgia for two years already. It becomes a real problem for an applicant that has spent those two years operating mostly from elsewhere and is registering the Georgian side of the business late, hoping the certificate alone will carry the substance question the way it sometimes did, historically, under Virtual Zone.
Permitted activities: a fixed, narrow list
Eligibility does not extend to "IT work" broadly. The ordinance sets out a specific list of qualifying activities, built around defined service codes, and revenue outside that list is capped rather than simply discouraged.
The permitted IT activities include:
- Software publishing, including computer games
- Computer programming and related consulting activities
- Computer facilities management activities
- Website design, development and hosting
- Web portal and remote software maintenance services
- Database access provision and related data services
- Remote system administration
- Security-related services: antivirus provision, firewall and filter installation and management
A separate, entirely distinct track covers maritime services: chartering vessels with or without crew, route planning and instructions to a ship's captain, managing cargo disputes, supervising shipbuilding, and ensuring compliance with the International Safety Management Code. A maritime services company qualifies under the same status and the same 5%/5%/0% package, but it is a genuinely different activity list from the IT side, and the two do not overlap.
A company can earn revenue outside this list without losing the status entirely, but only within a hard cap: non-permitted revenue, excluding VAT, cannot exceed 2% of total annual revenue from the activities the status actually permits. Cross that line and the excess is exposed to ordinary taxation, and a pattern of doing so is one of the grounds the ordinance gives for revoking the status outright.
Several English-language guides describe International Company Status as requiring clients located outside Georgia, mirroring Virtual Zone's explicit export condition. The ordinance's own text does not state that requirement in those terms - the 2% threshold it sets is a revenue-mix test tied to activity type, not a geography test tied to where the client sits. Whether domestic-facing revenue within a permitted activity counts differently in practice is worth confirming directly with the Revenue Service before assuming either reading applies to your business, rather than relying on a secondary summary either way.
The tax package: 5% profit, 5% payroll, 0% dividend
This is where International Company Status earns its place as a genuinely separate option rather than a slower route to what Virtual Zone already gives for free. Article 23 of the Tax Code sets out four distinct benefits, not one:
| Tax | Standard rate | International Company rate |
|---|---|---|
| Profit tax | 15%, on distribution | 5%, on distribution |
| Wage tax on employees | 20% | 5% |
| Dividend tax | 5% withholding | 0%, not taxed at source and not included in the recipient's gross income |
| Property tax | Up to 1% locally | 0% on property intended or used for permitted activities, excluding land |
The wage tax reduction is the piece Virtual Zone does not touch at all: a Virtual Zone company's staff pay the standard 20% regardless of the company's own 0% corporate rate, while an International Company's employees pay 5% on their salary income specifically because the company holds the status. For a company with a real payroll rather than a single owner-operator, that difference compounds across every employee, every month.
The 0% dividend treatment is the other genuine differentiator against Virtual Zone, which leaves ordinary dividend withholding untouched. A company planning to distribute profit to its owners rather than reinvest all of it finds real value in International Company Status specifically because of this line, even where Virtual Zone's 0% corporate rate looks lower on paper. We work through the arithmetic of reinvesting versus distributing under Georgia's wider corporate tax system in the reinvested profit model, and the distribution mechanics that decide when any of these rates actually apply in corporate income tax in Georgia.
How to apply, and what happens once you hold it
The application goes to the Revenue Service, supported by documentation of the two-year experience test, a description of the activities carried out, client and revenue evidence, and whatever substantiates the local operating costs and staffing the ordinance requires. The Revenue Service reviews the application and, once satisfied, refers it onward for the Ministry of Finance and the Government of Georgia to formalise by ordinance. Once granted, status runs for an indefinite period. There is no fixed annual renewal to diarise, which is a genuine practical advantage over regimes that require yearly recertification.
That does not mean the status is unconditional once it exists. It can be revoked if the holder itself applies to give it up, if non-permitted revenue exceeds the 2% threshold, or if the company simply stops meeting the conditions it was granted under in the first place, whether that is the substance test, the activity list, or anything else the ordinance sets. Unlike the retrospective correction risk that has become a live issue under Virtual Zone, the International Company ordinance frames revocation as forward-looking: the status stops applying once the conditions are no longer met, rather than triggering an automatic restatement of years already filed at the preferential rate. That is a meaningfully different risk profile from Virtual Zone's back-tax exposure, though it is not a reason to treat the substance and activity conditions casually, since a genuine failure to meet them is still the thing that ends the benefit.
Choosing between International Company Status and Virtual Zone
Once a company has actually cleared the two-year bar, the choice between the two regimes is a real decision rather than a formality, and it turns on how the company actually uses its profit and how broad its service mix is.
Reinvesting most of the profit, narrow software-production activity, no long track record yet. Virtual Zone. The 0% rate on qualifying export income beats a 5% rate on the same profit, and there is no two-year wait standing in the way.
Distributing a meaningful share of profit to owners, broader activity mix than pure software production, real payroll. International Company Status often wins here even with a nonzero corporate rate, because the 0% dividend treatment and 5% wage tax both apply on top of it, and Virtual Zone offers neither.
A maritime services business. International Company Status is the only one of the two that applies at all, since Virtual Zone's activity definition is IT-specific.
A company can genuinely start on Virtual Zone in its first two years and move to International Company Status once it clears the experience bar, if the broader activity list or the dividend treatment turns out to matter more than the headline rate by then. We walk through this transition, and the decision framework by company scale, in the full Georgia tax regime comparison, and if the company is still choosing its underlying legal structure before any of this becomes relevant, LLC registration is the starting point either regime is built on top of.
What none of this changes
International Company Status is a rate on top of an underlying entity, not a replacement for the ordinary rules every Georgian business follows. VAT registration is still mandatory once turnover from any non-exempt activity passes 100,000 GEL in a rolling 12 months, at the standard 18%. Every holder still files a monthly declaration with the Revenue Service by the 15th, including in months with no income. And the registry fee for setting up the underlying LLC does not move: 200 GEL standard or 400 GEL for same-day processing, regardless of which preferential regime the company eventually applies for on top of it.
A Free Industrial Zone is a third structure again, distinct from both of the regimes covered here, aimed at businesses physically operating inside one of Georgia's designated zones rather than an IT company exporting services from anywhere in the country. Where that genuinely fits is a separate question, covered in Free Industrial Zone Georgia, and it is worth not conflating a third structure into a decision that is really only between two.
We'll check your actual trading history, activity mix and staffing against the real eligibility test, tell you honestly whether International Company Status or Virtual Zone fits better right now, and prepare the application either way.
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Key takeaways
- Check whether you genuinely clear the two-year bar before applying. A company that does not should apply for Virtual Zone instead, not wait it out.
- Assemble payroll, cost and client evidence before submitting the application, since that is what a reviewer actually checks, not the certificate itself.
- Track non-permitted revenue against the 2% cap every month rather than discovering the breach at year-end.
- Confirm your specific client mix with the Revenue Service directly rather than assuming either the export-only reading or the activity-only reading applies to you.
- Model the dividend and payroll savings against Virtual Zone's flat rate using your own numbers once you qualify for both, rather than defaulting to whichever regime you registered under first.
- Keep the underlying LLC's registry fee, VAT threshold and monthly filing on your calendar separately, since none of them move with the preferential rate.
Frequently asked questions
What is International Company Status in Georgia?
It is a preferential tax regime for established IT and maritime businesses, charging 5% profit tax, 5% payroll tax on employees and 0% dividend tax. It requires at least two years of documented experience in a permitted activity and genuine operating substance in Georgia, unlike Virtual Zone, which requires neither.
Is International Company Status the same as Virtual Zone status?
No. They are separate regimes under separate laws. Virtual Zone gives 0% on qualifying export IT income with no minimum trading history. International Company Status gives 5% profit, 5% payroll and 0% dividend tax, but only to a company with at least two years of experience and real local substance already in place.
How do I meet the two-year experience requirement?
Three ways: the Georgian applicant itself has at least two years in a permitted activity, the applicant represents a non-resident enterprise with that history, or more than half the applicant's shares are owned by a partner enterprise or enterprises that meet the test. A brand-new company with no group history and no such relationship cannot meet any of them yet.
What counts as a permitted activity for International Company Status?
A fixed list of IT services, including software publishing, computer programming and consulting, website development and hosting, remote software maintenance, database access provision, remote system administration and security services, plus a separate list of maritime services covering vessel chartering, route planning, cargo dispute management and shipbuilding supervision.
How much non-qualifying revenue is allowed before the status is at risk?
Up to 2% of total annual revenue, excluding VAT, can come from activities outside the permitted list. Revenue above that threshold loses the preferential treatment and repeated breaches are grounds for the Revenue Service to revoke the status entirely.
Does International Company Status require exporting services outside Georgia?
The ordinance's own text does not state an explicit client-location requirement the way Virtual Zone's law does; its 2% cap is framed around activity type rather than where the client sits. Several published guides describe it as an export-only regime, which is a stronger claim than the statute itself makes, so it is worth confirming your specific situation with the Revenue Service before relying on either reading.
What tax does an employee of an International Company pay?
5% on employment income, rather than the standard 20% flat rate that applies to Georgian salaries generally. This is one of the two benefits Virtual Zone does not offer at all, since Virtual Zone leaves staff wage tax at the standard rate.
Can a new company with no trading history apply for International Company Status?
No. The two-year experience requirement rules out a genuinely new company with no group history and no representative relationship to an experienced non-resident enterprise. Virtual Zone, which has no minimum trading history, is the realistic route for a first-year IT company instead.
How long does International Company Status last once granted?
Indefinitely. There is no annual renewal to file. It can be revoked if the holder applies to give it up, if non-permitted revenue exceeds the 2% cap, or if the company stops meeting the substance or activity conditions it was granted under.
Can a company hold both Virtual Zone and International Company status at the same time?
No. They are separate applications and a company generally holds one or the other rather than both together. Which one to choose depends on trading history, activity mix and whether the company plans to distribute or reinvest its profit.
Is International Company Status only for IT companies?
No. It also covers a distinct set of maritime services - ship chartering, route planning, cargo dispute management and shipbuilding supervision - taxed under the same 5%/5%/0% package. The IT and maritime activity lists are separate and do not overlap.