Blog · 2026-05-20

Georgia in 2026: residency, the 1% tax and the new rules for people who work

A 365-day visa-free stay no longer substitutes for status. What changed on 1 March, which residence routes survived, who actually qualifies for the 1% turnover rate, and what living in Tbilisi or Batumi costs now.

What changed in Georgia over the past year

For years Georgia was the country you could simply fly into and live in - no visa, no status, no paperwork. That era is over. Several rules were rewritten at once in recent months, and anyone who moved in 2022-2023 and has changed nothing since is probably sitting in a grey zone right now.

• From 1 March 2026, a foreigner without permanent residence needs a separate right to work (a work permit). It applies to employees, sole traders and freelancers alike - including those whose clients are all abroad.
• From 1 March 2026, the property threshold for residency rose from USD 100,000 to USD 150,000, valued in lari by a certified appraiser.
• From the start of 2026, entry requires valid medical and accident insurance covering the whole stay, with minimum cover of GEL 30,000.
• From 1 October 2025, overstay penalties rose sharply and now carry the risk of a re-entry ban.

As of 2026 a transition period applies to labour migration, and regularising your status before 1 January 2027 is strongly advised. Secondary regulations are still being finalised, so verify the exact document list and timelines immediately before filing.

365 visa-free days: unique, but not legalisation

Citizens of Russia, Ukraine, Belarus, Kazakhstan and roughly 90 other countries may stay in Georgia for up to 365 consecutive days from the date of entry. Nobody else offers this: the standard visa-free allowance is 90 days in 180, here it is a full year without a single exit.

The costly misunderstanding is this: visa-free presence is tourist status. It confers no right to work, does not automatically create tax residency, does not count towards permanent residence, and never converts into a residence permit through sheer longevity. When the year ends you leave and re-enter, and the clock resets. That is formally legal, but a border officer may refuse entry to someone doing it for the fourth time with no visible reason to be in the country.

This is why "visa-free plus remote work" has stopped being a solution. If you plan to stay, you need status - and it is better sorted before the first fine, not after. We covered the wider logic in our guide to digital nomad visas and in the piece on Georgia for remote workers.

Residence routes: what survived and what it costs

Residence permits are issued by the Public Service Hall. A first permit usually runs 6 or 12 months, occasionally longer. Processing takes around 30 days, with a paid express option. You can apply from inside the country if your presence is lawful.

One detail matters on property: holders who obtained residency on a USD 100,000 asset before 1 March 2026 keep their status, and officials have said no revaluation will be required at renewal. New applicants are assessed against the USD 150,000 figure. Value is proven by a certified appraiser's report, not the purchase contract - so buying at 120,000 and "appraising up" is not a strategy.

Keep in mind that property-based residency is the weakest of the statuses: it grants no right to work and does not always satisfy a bank. If you are comparing neighbours, Armenia and Serbia follow different logic, and the full landscape sits on our residency hub.

Small business status: 1% on turnover

Georgia's main magnet for developers and freelancers. It works in two steps, and this is exactly where people trip:

1. Register as an individual entrepreneur at the Public Service Hall - usually one working day.
2. File a separate application with the Revenue Service for small business status. Registration alone does not grant 1%; the default rate is 20%.

As of 2026 the terms are: 1% applies to turnover up to GEL 500,000 a year (roughly USD 180,000). Amounts above the cap within the year are taxed at 3%. Exceed the cap two years running and the status is revoked from 1 January of the third year. Agritourism enjoys a higher ceiling of GEL 700,000.

Some activities are excluded: certain consulting formats, legal, audit, medical and other "professional" services generally fall outside the regime and can be reclassified to the standard rate. Software development, design, marketing, copywriting and support usually qualify - but the wording of your client contract matters. Reporting is a monthly declaration; you must keep records even though no cash register is needed for non-cash settlements.

The GEL 100,000 VAT threshold is the unpleasant surprise for a growing freelancer: small business status does not exempt you. Services to foreign clients are usually zero-rated or outside VAT scope, but you still have to register and file. If your structure grows past a single sole trader, see our notes on company registration.

Territorial taxation and the 183-day rule

Georgia taxes Georgian-source income. Foreign-source income of a resident individual - dividends from foreign companies, interest, capital gains on foreign assets - is generally exempt.

You become a tax resident by spending at least 183 days in the country within any continuous 12-month period. There is also a route for the wealthy that does not depend on day counting: HNWI status, which as of 2026 rests on proven assets of around GEL 3 million or annual income from GEL 200,000, plus a link to Georgia such as residency or Georgian-source income above a set amount. These conditions have shifted before, so confirm the current figures with an adviser.

And here is the trap that generates tax assessments: if you are physically sitting in Tbilisi providing services - even to a client in Germany - the Revenue Service treats that income as Georgian-source, because the work was performed on Georgian soil. Territoriality does not turn remote work into exempt income. That is precisely why the 1% sole trader is not a loophole but the normal, and effectively the only correct, regime for a resident remote worker. Genuinely zero regimes on foreign income look different - see Paraguay, or the comparison in our tax section. Neighbouring Armenia is closer to the Georgian model but with different rates.

Banks and compliance: what actually works

The major banks - Bank of Georgia, TBC, Liberty, Basisbank - have formally stopped opening accounts for Russian citizens remotely. You have to show up in person. That said, 2026 has been an improvement: TBC began issuing cards to Russians on a foreign passport alone in the spring, with approval in minutes and plastic within days.

What reduces the risk of refusal:

• A Georgian rental contract and a local address.
• Proof of income - statements, client contracts, payslips, translated into English or Georgian.
• A residence permit or sole trader registration; both sharply improve odds and unlock business accounts.
• Readiness to explain the origin of funds. Compliance will ask, and silence is read against you.

Separately: do not park your entire capital in one Georgian bank. This is a frontier jurisdiction heavily dependent on correspondent relationships. A Georgian account is excellent as an operating account, poor as your only one.

What Tbilisi and Batumi cost

Prices have risen and Georgia is no longer "cheap", but it remains markedly more affordable than Europe. Benchmarks for 2026: a three-room flat in central Tbilisi averages around GEL 3,500 a month (about USD 1,270); outside the centre, around GEL 2,200 (about USD 790). In residential districts such as Saburtalo, Didube or Gldani a decent two- or three-room flat runs GEL 1,800-2,500.

A single person's total monthly budget in Tbilisi is roughly USD 1,200 with rent, or USD 500-700 without. Batumi is about 20% cheaper - USD 800-1,200 with rent, and a renovated studio from USD 300 - but coastal prices spike in summer and the city empties in winter. Tbilisi is about infrastructure, schools, doctors and coworking; Batumi is about the sea and seasonality. More detail in our city guides.

The path to permanent residence and citizenship

The logic is simple but long. After six years of continuous residence on permits you may apply for permanent residence. Years spent on a student permit generally do not count - the standard trap for graduates. Citizenship applications come after ten years of continuous residence, and continuity breaks if you are absent for more than three months in a year.

Since 2024 the exam in Georgian language, law and history must be passed before the citizenship application is filed. And crucially, Georgia does not as a rule permit dual citizenship: naturalisation implies renouncing your previous one, with exceptions granted personally by the president and awarded to very few. If your goal is a second passport rather than life in Georgia specifically, other jurisdictions are more realistic - see our citizenship overview.

Pitfalls people discover too late

• Sole trader without a work permit. Since March 2026 registration alone does not legalise your labour. These are two different documents.
• Small business status never filed. Register the sole trader, assume 1% switched on automatically, and you will be assessed at 20%.
• The GEL 100,000 VAT threshold. Cross it and you must register within two working days.
• Tax residency by default. Spend 183 days and you are a resident, whether or not you ever filed. You may simultaneously remain resident in your country of origin - CFC rules and centre-of-vital-interests tests still apply.
• Overstay. The year-long allowance lulls people; they lose count and discover the breach at the border, fine and re-entry ban included.
• Insurance. Required at entry - carry a policy with at least GEL 30,000 of cover for the full stay.

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