Virtual Zone Person: the status for IT companies in Georgia

Virtual Zone Person (VZP) is a special status for companies that develop software in Georgia and supply it abroad. It is one of the few regimes where the rate of profit tax is zero.

Rates

Note the second line: the exemption covers profit, not extraction. When the money goes to the owner, tax arises.

Who qualifies

The status is intended for software development activity. The key condition is that the services are supplied outside Georgia. Working with Georgian clients does not remove the status, but that income falls outside the exemption and is taxed on general terms.

• the company is registered as an LLC in Georgia;
• the activity involves software development;
• the clients are located outside Georgia;
• there is evidence that development actually happens here.

How to obtain it

The procedure

First the LLC is registered, then an application for the status is filed describing the activity. A certificate is issued on a positive decision. The status does not come with company registration — it is a separate procedure.

What has to be evidenced

The most common source of trouble is not obtaining the status but keeping it. You have to show that development genuinely takes place in Georgia: staff or contractors, contracts, traces of an actual working process. A shell with a single nominal director invites questions in a review.

Common questions

Can I also work with Georgian clients?

You can, but that income is not exempt. Accounting then has to separate export revenue from domestic revenue.

Do I need an office in Georgia?

There is no formal floor-space requirement, but the connection between the activity and Georgia has to be real and demonstrable.

Is the status permanent?

It is not issued for a term, but neither is it irrevocable. If the conditions stop being met it can be lost and the tax recalculated.

VZP pays off with export revenue and a real presence in the country. We assess whether the status fits your model, prepare the application and run the accounting with revenue recognised separately.