Maybe you haven’t heard of the Republic of Georgia in the South Caucasus, but there are many compelling reasons to seek residency there. Personally, it’s one of my favorite countries and I go there on a regular basis. I absolutely love Georgia.
1. The only territorial tax system in Europe
A territorial tax system means that Georgia will tax its residents on Georgian-sourced income only. Therefore, if you have tax residency in Georgia, the local tax authorities will not seek to tax you on your rental income abroad, dividends abroad, capital gains abroad, or any business that you possess abroad. You just need to pay taxes wherever your assets are located – nothing extra to pay in Georgia.
It’s a really beneficial system that can make a huge difference in your life. Think of all the money you could save, as well as tax compliance related headaches. You would have more money to grow your business, invest, donate and save.
Georgia is the only country in Europe that does not tax worldwide income. A few Latin American countries operate on a territorial system , such as Panama and Nicaragua, as well as some Asian countries such as Malaysia and Hong Kong.
Though the personal income tax rate on Georgian-sourced income is 20%, there are no inheritance taxes, no capital gains taxes, no wealth taxes and no stamp duty.
2. A very low cost of living
The Republic of Georgia ranks near the bottom of the Numbeo Cost of Living Index. You can get a draft beer for $1, and modest restaurant meal for $4. A taxi ride across town will set you back $2.
You can live well in Georgia for very little money without having to sacrifice quality. Your weekends to the beach or the mountains away from Tbilisi, the capital, won’t set you back more than $60 a night for nice hotels.
Again, more money for you to grow your business, invest, donate and save.
3. An absolutely gorgeous country
The capital Tbilisi has been a cradle of culture and civilization since the 5th century AD. You’ll find museums, historical houses, museums, art galleries, churches, mosques, synagogues, and an alternative art scene. You won’t be bored.
A few hours away near the Russian border lie the stunning Caucasus mountains, perfect for hiking and exploring. And come wintertime these very mountains offer top-notch skiing at competitive rates.
Spend a weekend in the wine country of Kakheti, or head out to the mini-Dubai Black Sea resort city of Batumi. There, you’ll find casinos, nightclubs, great dining and beaches to spend your Summer weekends.
4. A great geographic location
If you believe that the center of the world is gradually shifting away from the North Atlantic to Asia, then Georgia is where you want to be. Flanked by Turkey and Russia, with Iran not too far away, Georgia is in the thick of things. It not only makes for great road-trips, but also good air connectivity:
- Dubai: 3h
- Munich: 4h
- Istanbul: 2h30
- Moscow: 2h30
Tbilisi has direct flights to destinations all over Europe, the Middle East, Central Asia, and even China. It’s a well connected destination. Kutaisi, another major city in Georgia, has many low cost flights to Europe. Back in January I flew there from Paris for 40 euros return!
5. Great food
Georgia has a great international reputation for its food. I won’t elaborate too much, as I am not much of a foodie. Just Google (or preferably Duckduckgo) “Georgian food” and find out for yourself :).
Anyway, expect lots of delicious meat and great wine.
6. Great value real estate that enables you to get residency in Georgia
I have written extensively on real estate in Tbilisi. While you can’t expect massive returns, you will certainly find fantastic value. If you plan on living in Tbilisi and want to buy a property for your own personal use, you will be amazed at the deals you will find. Additionally, it’s a good store of value.
Buying real estate in the Republic of Georgia is one way to get residency. More details below.
7. A great place to do business
Georgia ranks 7th in the Ease of Doing Business ranking by the World Bank. Why?
- You can create a local company in 24 hours.
- The corporate tax rate of 15% and the dividend tax rate of 5% are due only when the owner distributes dividends. This means that all reinvested profits are tax free.
- A strong political and cultural commitment to making business easy.
- Customs and taxes are streamlined to ensure businesses don’t waste time on bureaucracy.
- Low perceived levels of corruption according to Transparency International. Georgia has the same ranking as the Czech Republic.
- Amazing banking. Georgia is one of the best value international banking destinations.
8. A great place to raise a family
Georgia is a conservative, Christian Orthodox culture that value family above all. Georgians are very welcoming towards foreigners, especially families, so expect to make many local friends.
There are a number of good quality international schools. You’ll find British, American, German, Russian schools and even a French lycee. If you want your children to fully integrate, there are also great local private schools.
Safety is one of Georgia’s strong points. I doubt you will ever feel threatened when walking around, even at night. It’s safer than much of Western Europe.
9. Many options to get residency in the Republic of Georgia
Georgia has an immigration-friendly policy. There are multiple paths to becoming a resident.
- A temporary visa through a $100,000 investment in real estate.
- A permanent residency visa through a $300,000 investment in real estate.
- Or even just showing up as a tourist, as many countries get visa-free access to Georgia for up to a year.
There is also a special arrangement called the “Special Tax Residency Regime” for High Net Worth Individuals (HNWI) seeking to obtain tax residency without spending 183 days in Georgia.
CLICK HERE for detailed information on the various residency and tax options in Georgia.
Some potential drawbacks
I have to be honest here, I work with a certified agent who offers residency services. I make a small commission each time someone gets referred. I don’t mind being transparent about it as I know he does a great job and is more affordable than most.
I probably did a good job of selling residency in Georgia, but to be fair, Georgia isn’t for everyone. If you love big, bustling cities, then Tbilisi won’t fit the bill. It is a lively city with a lot to keep you busy, but it’s not Paris, Dubai or Singapore. Also, if you are socially very liberal and are vocal about it, Georgia will probably not be that great of a match for you.
But if you feel comfortable with the value proposition, move to Georgia! It’s an absolutely lovely country with great tax benefits.
You won’t regret it.
Other articles on Georgia:
- The Pros and Cons of opening a Bank Account in Tbilisi, Georgia
- The Real Estate Investment Market in Tbilisi, Georgia
*a consulting session is a discussion about your portfolio and objectives. It does not constitute legal, financial, tax or investment advice.