Jeremy Bel No Comments

Information Technology has become the lifeline of the global economy. It is the architecture that has been leveraged by each and every sector to achieve their purported objectives. As an integral part of the services sector, a significant section of the global IT companies has not only managed to survive the recessionary trends but has been able to post profits as well. The tailwinds faced by the IT industry, of late, are the result of a massive digital transformation exercise carried out by businesses, enterprises, organizations, and governments across the world.

The world has woken up to the possibility of functioning as an integrated global entity where customer services, products or information can be shared or accessed at the click of a button. Notwithstanding the immense possibility of IT as an industry in connecting the world, it has become highly competitive as well. In fact, global IT companies are on the lookout for locations that offer a business friendly environment and plenty of incentives to stay competitive and profitable.

Georgia as the global IT destination

The popularity of Georgia as an attractive investment destination has caught traction across the world. This has been fuelled by several positive ratings received by the country from credible international agencies like the World Bank, the European Union, the International Monetary Fund, or Transparency International. The other factors that burnish the image of Georgia as a happening place for business are the absence of currency rules, market economy, free flow of capital, low cost of workforce and services, robust infrastructure, low tax regime, and a robust banking sector.

In addition to establishing free zones where a plethora of business incentives is given, Georgia has set up a virtual zone exclusively for the IT enterprises. The virtual zone in Georgia serves as a legal entity and offers businesses plenty to cheer about. In fact, when countries are toughening their tax laws and looking to squeeze businesses to gain additional revenue, Georgia comes across as a breath of fresh air for businesses.

How the virtual zone in Georgia (VZG) facilitates business

  • Profits generated by an IT company within the virtual zone through the supply of IT or IT enabled services outside the jurisdiction of Georgia are exempted from paying taxes.
  • Should an IT company within the VZG delivers services to its foreign clients, the revenue generated therein shall be exempted from paying VAT and corporate tax to the tune of 18% and 15% respectively.
  • When it comes to the payment of dividends to a Georgian shareholder, the dividend amount will not be treated as a taxable income for the shareholder. Moreover, dividends paid to foreign shareholders will not be subjected to double taxation.
  • If the income generated within a VZG is not distributed as dividend but in other ways as prescribed by law, there shall be no application of taxes.
  • The company set up within a VZG is not required to employ any Georgian save the company’s director.


The relaxed rules within the virtual zone in Georgia have come as a shot in the arm for IT companies. So, should your IT company seeks to leverage the benefits of investing in a VZG, engage the services of a top consulting company and hit the highway of increased sales, profits and brand recognition.

Leave a Reply

Your email address will not be published. Required fields are marked *