Almost everyone who registers a Georgian business asks the same question about a week after the certificate arrives: how do I actually get the money out? The honest answer splits into two completely different stories depending on what you registered, and conflating them is the single most common - and most expensive - mistake we see. If you have an Individual Entrepreneur, there is barely a question to answer. If you have an LLC, there is a real one, with a real tax bill attached. Here is how to pay yourself from a Georgian company, structure by structure.
The distinction that decides everything
Georgian law treats an Individual Entrepreneur and an LLC as fundamentally different kinds of thing, and the difference is not paperwork - it is legal personhood. Under the Law of Georgia on Entrepreneurs, an IE "shall not be a legal person" and "shall fulfil his/her rights and obligations in business relations as a natural person." An LLC is the opposite: a separate legal entity that owns its own money, signs its own contracts, and is legally distinct from the person who owns it.
That single fact decides everything downstream:
| Individual Entrepreneur | LLC | |
|---|---|---|
| Legal person separate from the owner | No | Yes |
| Whose money is in the business account | Already yours | The company's, until distributed |
| Tax already paid on it | 1% (or 3% above the threshold), on turnover | 0% while retained |
| Moving money to yourself | An internal transfer | Salary or a dividend - a separate taxable event |
| Tax on the transfer itself | None | 20% PIT plus pension (salary), or ~19.25% combined (dividend) |
If you take away one thing from this guide, take this: with an IE, "paying yourself" is not really a tax question. With an LLC, it is the tax question, and getting it wrong is expensive in both directions - overpaying by extracting money the slow way, or underpaying by treating company funds like your own and creating a liability you did not know you had.
Individual Entrepreneur: there is no such thing as paying yourself
If you operate as an IE, the money sitting in your business bank account is not the company's money released to you - it is already your money, because there is no company. You earned it, you declared it, and if you hold Small Business Status you already paid 1% on it when you filed the monthly turnover declaration. Moving it to your personal account, spending it directly from the business account, or leaving it where it sits are three versions of the same non-event.
Our guide to the 1% tax covers how that rate is calculated and who qualifies for it. What matters here is what happens after: nothing does. There is no withholding to calculate, no separate declaration for the transfer, and no additional tax triggered by the act of moving money between accounts you both control as the same natural person.
The mistake people import from an LLC mindset
The most common error we see is an IE owner who assumes they need to formalise a "director's salary" for themselves, sometimes because a previous business was incorporated elsewhere, sometimes because it simply feels more official. It is not required, it does not reduce your 1% liability, and running yourself through a payroll process designed for employees adds paperwork for no benefit. Save that structure for actual staff - our payroll in Georgia guide covers what hiring employees genuinely requires, which is a different obligation from anything to do with your own withdrawals.
LLC: two ways money actually leaves the company
An LLC's profit belongs to the company until the company decides to pay it out, and there are exactly two routes for a working owner: put yourself on payroll as an employee or director, or take a dividend as a shareholder. Most owners eventually use both, at different points and for different reasons.
Salary
Paying yourself a salary works exactly like paying any other employee, because for tax purposes that is what you are. The company withholds a flat 20% personal income tax, plus a 2% employee pension contribution, and separately pays a further 2% employer pension contribution as its own cost. The order of the calculation, the monthly filing and the pension thresholds are the same ones any employer works through, which we cover in full elsewhere.
Salary is deductible as an ordinary business expense before profit is ever calculated for distribution purposes, which means it never triggers Georgia's corporate income tax at all. It is taxed once, at the individual level, and it happens automatically every month regardless of whether you personally need the cash that month.
Dividends
A dividend is a distribution of profit the company has already earned, and it is where Georgia's Estonian-style corporate income tax actually bites. Retained profit is taxed at 0% for as long as it stays in the company. The moment you distribute it, the company owes 15% corporate income tax on the distribution, and the dividend itself is then subject to a further 5% withholding tax when it reaches you as an individual shareholder - resident or non-resident alike. Only dividends paid to another Georgian resident company are exempt from that second layer, which is an inter-company relief, not something that applies to a person.
Combined, that is roughly 19-20% all-in on money you actually take out as a dividend, and 0% on anything you leave reinvested in the business. We cover the mechanics of the 15% rate on its own, separate from what happens to the dividend afterward, in corporate income tax in Georgia.
This is the single most common error non-resident LLC owners make, and it is a direct import from how an IE works. With an IE, spending directly from the business account is fine, because it is your money. With an LLC, using the company card for personal expenses, or taking an informal "loan" from the business with no real intention of repaying it, does not sidestep the tax on distributions - it typically is one. Georgia's corporate tax rules treat costs unrelated to the business and free distributions of this kind as taxable events in their own right, triggered at the same 15% rate as a formally declared dividend. The company still owes the tax; you have just made it harder to see coming.
What each route actually costs: a worked comparison
Numbers make the difference concrete. Take a company with 100,000 GEL of profit it wants to get into the owner's hands, one way or the other.
As a dividend: the company pays 15% corporate income tax on the distribution - 15,000 GEL - leaving 85,000 GEL actually paid out. That payment is then subject to 5% dividend withholding tax - 4,250 GEL - leaving the owner with 80,750 GEL, immediately liquid.
As salary, spending the same 100,000 GEL as the company's total cost (gross salary plus the employer's own 2% pension contribution): gross salary comes to roughly 98,039 GEL, the employee's 2% pension contribution is 1,961 GEL, and 20% personal income tax on the resulting taxable base is roughly 19,216 GEL. The owner takes home about 76,863 GEL immediately, plus 3,922 GEL combined sitting in their own pension account - not gone, just not liquid until retirement.
| Route | Company cost | Owner receives now | Also accrues |
|---|---|---|---|
| Dividend | 100,000 GEL | ~80,750 GEL | Nothing extra |
| Salary | 100,000 GEL | ~76,863 GEL | ~3,922 GEL in the owner's own pension |
Dividends put more cash in your hand today. Salary costs a little more in the moment but a real slice of that gap is forced savings landing in an account with your own name on it, not a tax that has simply vanished. Neither is a mistake; they answer different questions about when you want the money.
Timing: when the tax bill actually falls due
This is where the IE and LLC stories diverge most sharply, and where the LLC structure can genuinely work in an owner's favour.
An IE's 1% is charged on turnover as it is earned, declared monthly, and due regardless of whether you ever move the money out of the business account. There is no way to defer it by leaving the cash in place - the tax event is invoicing, not withdrawal.
An LLC's corporate income tax works the opposite way. It is triggered by distribution, not by earning the profit in the first place, so reinvested profit sits at 0% for as long as you choose not to take it out. A business retaining most of its earnings to grow can genuinely defer the entire 19-20% distribution tax indefinitely, which is the core advantage an LLC has over an IE once turnover is large enough that the comparison matters. Salary is the exception inside an LLC: it is taxed monthly as paid, on the same clock as any employee's, whether or not the timing suits the owner personally.
What non-resident owners get wrong
A few mistakes show up disproportionately often among owners who do not live in Georgia, usually because the assumptions that hold in their home country do not carry over.
Assuming Georgia's rate is the whole story. Paying 1%, or 19-20% on a dividend, settles your Georgian liability. It says nothing about what your home country still charges if you remain tax resident there, and most countries tax worldwide income regardless of where the company sits. Georgia's low rates are frequently not the last stop.
Assuming controlled-foreign-company rules treat an IE and an LLC the same way. Many countries' CFC regimes attribute the income of a foreign corporation to a resident shareholder, whether or not it is distributed. A Georgian LLC is squarely that kind of company. An Individual Entrepreneur is a sole proprietorship with no separate legal existence, which in a number of jurisdictions puts it outside CFC rules entirely - a genuine structural difference, not a technicality, though it needs checking against your specific country rather than assumed. If you are structuring around this, our country-by-country guides work through what specific home countries actually do, and 1% tax without living in Georgia covers the related question of whether the regime survives you not being physically present.
Assuming a tax treaty automatically reduces the 5% dividend withholding. Georgia's domestic dividend rate is already low, and plenty of treaties do not improve on it, or only do so once you have filed the right paperwork with the Revenue Service in advance. Do not assume the reduced treaty rate applies by default; confirm it, or expect to pay the standard 5%.
Treating the LLC's bank account like a personal one, out of habit from running an IE. This is the mistake the callout above exists for, and it is disproportionately an IE-to-LLC transition error: the two structures work oppositely, and the habit that costs nothing under one structure creates a real, backdated tax liability under the other.
If you are not sure which structure you are actually running, or whether your current withdrawal habits match it, comparing an Individual Entrepreneur against an LLC is worth reading before the Revenue Service raises the question for you.
We calculate your salary withholding, prepare dividend distributions properly, and make sure company and personal money stay where the tax code says they belong - so a habit that was fine under an IE does not become a liability under an LLC.
See what it costs
Key takeaways
- An IE is not a separate legal person - its money is already yours. Moving it is not a taxable event beyond the 1% already paid.
- An LLC is separate. Extraction means salary (20% PIT plus 2%+2% pension) or a dividend (15% corporate tax, then 5% withholding).
- Salary is deductible and never triggers corporate tax; dividends are exactly what that tax targets.
- On 100,000 GEL, a dividend nets about 80,750 GEL now; salary nets about 76,863 GEL plus 3,922 GEL in pension.
- An LLC can defer its tax indefinitely by reinvesting; an IE's 1% is due on turnover regardless of withdrawals.
- Treating an LLC's account like an IE's can be read as a deemed distribution, taxed at 15%.
- Georgia settling its claim does not settle your home country's, if you remain tax resident there.
Frequently asked questions
Do I pay extra tax when I move money from my IE's business account to my personal account?
No. An Individual Entrepreneur is not a separate legal person, so the money in the business account is already yours. You already paid 1% (or 3% above the threshold) on it as turnover; moving it between accounts is not a separate taxable event.
How is money taxed when it leaves an LLC?
It depends on the route. Salary is taxed at a flat 20% personal income tax plus 2% employee and 2% employer pension contributions, withheld monthly. A dividend triggers 15% corporate income tax on the distribution, followed by a 5% withholding tax on the payout itself - roughly 19-20% combined.
Is it cheaper to take a salary or a dividend from a Georgian LLC?
On the same company cost, a dividend puts more cash in your hand immediately - about 80,750 GEL against 76,863 GEL on a 100,000 GEL comparison. Salary's gap largely goes into the owner's own pension account rather than disappearing, so it is closer to a timing choice than a straightforward loss.
Can I avoid the 15% corporate tax by just spending company money directly?
No, and this is the most expensive assumption non-resident LLC owners bring over from running an IE. Georgia's tax rules treat non-business spending and informal distributions of company funds as taxable events in their own right, generally at the same 15% rate as a properly declared dividend.
Do I have to pay myself a salary from my LLC, or can I take only dividends?
There is no minimum salary requirement under Georgian law. Many owners take only dividends, particularly when they are not doing day-to-day work for the company. If you are actively working in the business, a salary is often still worth taking for the pension contributions it builds, even though a dividend is the cheaper route in the moment.
Does the 5% dividend withholding tax apply to non-resident owners too?
Yes. The 5% rate applies to dividends paid to individual shareholders whether they are Georgian residents or not. The exemption only applies when the recipient is itself a Georgian resident commercial legal entity, which is a corporate holding structure, not an individual owner.
Will a tax treaty reduce the 5% dividend withholding automatically?
Not automatically. Some treaties improve on Georgia's domestic rate and some do not, and claiming a reduced rate generally requires filing for it in advance rather than assuming it applies. Confirm your specific treaty position rather than assuming a discount you have not actually claimed.
If I never distribute my LLC's profit, do I ever pay Georgian tax on it?
Not corporate income tax - profit retained and reinvested in the business is taxed at 0% for as long as it stays there, under Georgia's distribution-based system. The tax is triggered by the distribution itself, not by earning the profit.
Does my home country still tax the money I pay myself from a Georgian company?
Very possibly, if you remain tax resident there. Georgia settling its own claim on the money does not settle your home country's, and most countries tax residents on worldwide income. Controlled-foreign-company rules add a further layer for an LLC specifically, since many countries' CFC regimes reach a foreign corporation's undistributed profit in a way they do not reach a sole proprietorship.
Is an Individual Entrepreneur's income treated differently by foreign CFC rules than an LLC's?
Often, yes, though it depends on the specific country. CFC regimes generally attribute the income of a foreign corporation to a resident shareholder. An Individual Entrepreneur is not a corporation - it has no separate legal existence from its owner - so a number of jurisdictions' CFC rules do not engage with it the way they engage with an LLC. This is worth confirming against your specific country rather than assuming either way.
What is the biggest mistake people make when switching from an IE to an LLC?
Carrying over the habit of treating the business account as a personal one. It costs nothing under an IE because the money is already yours. Under an LLC it can be read as an undeclared distribution and taxed accordingly, which is exactly the liability this guide exists to help you avoid.