Corporate Property Ownership in Georgia

Overview of Corporate Property Holding

Foreign individuals and foreign legal entities may establish a Georgian company—typically a Limited Liability Company (LLC or LTD)—to acquire, hold, lease, and dispose of real estate in Georgia. Registration of a corporate entity is executed through the Public Service Hall or National Agency of Public Registry (NAPR) and can be completed within one business day.

Tax Regimes and Implications

1. Corporate Income Tax (Estonian Tax Model):

Georgia utilizes a deferred corporate taxation model. An LLC pays 15% Corporate Income Tax (CIT) only when net profits are distributed to shareholders as dividends. Retained earnings reinvested into additional property, business operations, or asset acquisition incur 0% immediate CIT.

2. Dividend Withholding Tax:

Dividends paid to foreign individuals or non-resident entities are generally subject to a 5% withholding tax at source, unless reduced under an applicable Double Taxation Treaty (DTT).

3. Property Tax:

Unlike individuals who may qualify for zero property tax on residential real estate if their Georgian-source annual income is below {{data:property_tax_threshold_gel}} GEL, corporate entities holding real estate must pay annual property tax. The rate is up to 1% of the average net book value (or market value in specific valuation cases) of the real estate asset.

4. Value Added Tax (VAT):

Commercial leasing conducted by an LLC exceeding the registration threshold of 100,000 GEL in annual turnover requires mandatory VAT registration. Commercial rent is subject to 18% VAT. Purchases of new-build properties from developers include 18% VAT within the advertised developer purchase price.

Key Statutory Restrictions

• Agricultural Land Prohibition: Under the Organic Law of Georgia on Ownership of Agricultural Land, foreign nationals and legal entities incorporated in Georgia that are foreign-owned (where foreign entities or non-citizens hold equity) are prohibited from owning agricultural land, except under rare government-approved investment project waivers.
• Residency Exclusion: Acquiring residential property through an LLC does not qualify the ultimate beneficial owner for the standard $150,000 USD Short-Term Residence Permit. That specific permit requires direct personal title registration in the individual owner's name at NAPR. Corporate real estate purchases may only contribute toward the $300,000 USD Investment Residence Permit if structured as a qualified commercial enterprise investment.

An international investor registers a Georgian LLC to purchase two commercial office spaces in Tbilisi for $220,000 USD. The LLC leases the space to local businesses, generating $2,000 USD per month in rental income. Because the LLC retains these earnings within its corporate account to finance future property acquisitions, it pays 0% Corporate Income Tax under Georgia's tax code. However, the LLC must file an annual property tax return and pay up to 1% of the asset's book value annually. When the owner eventually distributes $20,000 USD in accumulated rental profits as dividends, the company pays 15% CIT ($3,000 USD) and withholds 5% dividend tax ($1,000 USD), netting the owner $16,000 USD.