The sole trader is the leanest Georgian structure and the right one for many people. It becomes expensive at exactly one point: when the steps happen in the wrong order. Turnover earned before the small business status is approved is taxed under the standard regime — and that is not recoverable afterwards.
The order
-
1 — Documents and power of attorney
Passport, proof of address, notarised power of attorney with apostille where registration is to run remotely.
-
2 — Entry in the registry
The sole trader is entered in the state registry. The tax number arises with the entry.
-
3 — Apply for the small business status
A separate procedure with the tax authority. The one-percent rate applies only from approval.
-
4 — Bank account
The business account is tied to the registered entity; the bank runs its own identity and source-of-funds checks.
-
5 — First filing
The monthly filing duty starts whether or not any turnover has occurred.
Where it typically goes wrong
- The activity is on the exclusion list — consulting is the most common case
- The power of attorney is not apostilled or defines the authority too narrowly
- Turnover was earned before the status was approved
- Activity permitted, power of attorney complete, status approved before the first invoice
- An address in Georgia in place — as a service address, not a residence
Which activities are excluded is set out in The small business status — and the list is narrower than the English translation in circulation suggests.
What the status does not settle
It settles the taxation of turnover in Georgia. It says nothing about where you are resident, and it releases no liability at home. Anyone remaining resident in Germany or Austria acquires a second structure with the sole trader, not a lower tax burden.
Registering as a sole trader — frequently asked
Do I have to travel to Georgia to register?
No. Registration is possible through a notarised power of attorney certified and apostilled abroad. In practice the document logistics beforehand take longer than the registration itself.
Do I get the one-percent status automatically?
No. Registration as a sole trader and the small business status are two separate procedures. The status has to be applied for, presupposes a permitted activity, and applies from approval — not retroactively to turnover already earned.
What happens if I exceed the turnover ceiling?
The status falls away and taxation moves to the standard regime. That is not an accident but a foreseeable transition — it belongs in the planning as soon as turnover approaches the ceiling.
Do I need a Georgian address?
An address in Georgia is required for registration. It is not a residence and creates no tax residence — it is the structure address for the registry and the authorities.
This article is general information and does not constitute legal or tax advice. Whether an activity supports the small business status has to be examined case by case; anyone remaining liable at home has to declare there. As at August 2026.
Sources
Every legal statement in this article is backed by the primary source listed below.
- Tax Code of Georgia, Art. 88 (small business status) — Georgian original with version selector
- Revenue Service Georgia — status application and ongoing filings
- National Agency of Public Registry (NAPR) — registration of the sole trader