India is one of the cleaner cases in this cluster. There is no controlled foreign company regime reaching down to individuals, no exit tax on leaving, and a working tax treaty with a standard tie-breaker. The genuine constraint is not tax law at all - it is the Reserve Bank of India's cap on how much money you can send out of the country in a year, and the compliance that comes with sending it. This guide works through Section 6 residency, the RNOR status most guides skip, and the remittance limit that decides how fast you can fund a Georgian company.
What an Indian freelancer running a Georgian IE actually pays
Start with the number this guide turns on. A self-employed Indian earning the equivalent of $80,000 a year in freelance profit - roughly INR 76,80,000 - sits well into the higher slabs of the new tax regime that has applied by default since the 2025 reforms, producing base income tax of roughly INR 18,84,000. A 10% surcharge above Rs 50 lakh adds roughly INR 1,88,400, and a 4% health and education cess adds a further INR 82,900 or so.
| India | Georgia (Small Business Status) | |
|---|---|---|
| Turnover / declared profit | INR 76,80,000 (about $80,000) | $80,000 turnover |
| Income tax (new regime slabs) | ~INR 18,84,000 | - |
| Surcharge (10%, Rs 50 lakh-1 crore band) | ~INR 1,88,400 | - |
| Health and education cess (4%) | ~INR 82,900 | - |
| Georgian tax (1% of turnover) | - | $800 (~INR 76,800) |
| Total, all-in | ~INR 21,55,300 (~28.1%) | $800 (1%) |
Unlike Turkey, Israel or Germany elsewhere in this cluster, India runs no separate mandatory self-employed social security charge on top of this - the roughly 28% effective rate above is close to the whole story here.
Does Georgia's 1% actually apply to you in the first place
Before any of the Indian-side analysis matters, the 1% has to genuinely apply, which is a Georgian-side question first. Small Business Status taxes Georgian-source income, and for services that generally means work physically performed in Georgia or income meeting a test in Georgian-source income rules - registering a Georgian IE while continuing to invoice from Bengaluru or Mumbai does not make the income Georgian-source by itself. The full mechanics are in Georgia's 1% tax; everything below covers what Indian law does once the income genuinely is Georgian.
Indian residency, the deemed-resident rule, and RNOR
Section 6 of the Income-tax Act sets two ordinary tests: resident if present in India for 182 days or more in the financial year, or 60 days or more in the year and 365 days or more across the preceding four years - a more layered test than Georgia's own rolling 183-day count. A citizen visiting India, or one leaving for employment abroad, gets the 60-day limb replaced with 182 days - unless total income other than foreign-source income exceeds Rs 15 lakh, in which case the substituted figure drops to 120 days. Section 6(1A), added by the Finance Act 2020, goes further: a citizen with total income other than foreign-source income above Rs 15 lakh is deemed resident if not liable to tax anywhere else by reason of domicile or residence, closing the gap for citizens structuring their lives to be tax resident nowhere at all - it only bites where no other country actually claims you.
Anyone caught by that deemed-resident rule, or by the 120-day substituted test, is automatically treated as RNOR - Resident but Not Ordinarily Resident - under section 6(6), the same status available to someone who was non-resident in 9 of the preceding 10 years, or present 729 days or less across the preceding 7. An RNOR is taxed on Indian-source income only; genuinely foreign income, Georgian earnings included, sits outside the Indian tax net for a multi-year transition window, typically two to three years, and RNOR status also exempts you from reporting foreign assets on Schedule FA. This is the part worth reading twice - it can shelter Georgian income for years without requiring you to leave India at all.
India runs no exit tax: ceasing residency is not a taxable event, and there is no deemed disposal of assets on departure, a genuine advantage over Germany's or Spain's guides. India also has no enacted CFC legislation - proposed in the 2010 Direct Taxes Code bill but never enacted - so neither a Georgian IE nor an LLC gets attributed back to you. GAAR can still disregard an arrangement lacking genuine commercial substance, and Place of Effective Management rules under section 6(3) can deem a foreign company Indian-resident if managed from India, though CBDT's Circular No. 8 of 2017 confirms POEM does not apply below Rs 50 crore turnover - covering nearly every solo-founder LLC.
India and Georgia have had a tax treaty in force since 8 December 2011, with a 90-day permanent establishment threshold, 10% withholding on dividends, interest and royalties, and the standard tie-breaker sequence if residency is disputed.
The remittance cap that actually decides this
This is the practical constraint on the move, not the tax rate. The Reserve Bank of India's Liberalised Remittance Scheme lets a resident individual send up to USD 250,000 a year, unchanged since 2015 and applied in aggregate across every bank you use, not per bank. Once used for the year, nothing more moves under the scheme regardless of purpose, reinvestment included.
Tax Collected at Source sits on top. The first Rs 10 lakh remitted in a financial year is free of TCS; remittances for "other purposes" - which is where funding a foreign company sits - attract 20% TCS above that threshold, unchanged in the 2026 Budget even as education and medical remittances were cut to 2%. TCS is not a final cost: it is credited against your income tax liability when you file, so the real effect is a cash-flow drag in the year you remit, not a permanent tax.
Structure matters too. Under the Foreign Exchange Management (Overseas Investment) Rules, 2022, ODI requires the foreign entity to have limited liability - sole proprietorships and general partnerships are stated outright as ineligible. A Georgian Individual Entrepreneur, an unlimited-liability sole proprietorship with no separate legal personality, cannot be the subject of ODI at all, so funding it runs as an ordinary personal remittance instead - simpler, not harder. A Georgian LLC is eligible for ODI, but that means filing Form FC and an Annual Performance Report every year, on top of the same $250,000 ceiling; the RBI's own FAQ confirms a sole proprietor cannot separately claim a second allowance in the business's name.
One divergence worth knowing: FEMA runs its own definition of "resident," separate from the Income-tax Act's day-count tests. Someone who leaves India for employment or business abroad intending to stay an uncertain period becomes a "person resident outside India" for FEMA purposes from departure, even while section 6 might still treat them as an Indian tax resident for a period afterward. Once that shifts, the LRS and ODI framework stops governing your Georgian operations, though money through Indian accounts still follows separate NRI banking rules - worth confirming with your bank.
The steps, in order
- Work out which residency test applies to you - the 182-day test, the 60-plus-365-day test, or the section 6(1A) deemed-resident rule for citizens over Rs 15 lakh with no other tax home.
- Check whether RNOR status covers your Georgian income, and for how long, since it can shelter genuinely foreign earnings without you becoming a non-resident.
- Register a Georgian Individual Entrepreneur and apply for Small Business Status, either in person or under power of attorney through remote company registration.
- Choose an IE for the simpler remittance path, since it cannot receive formal ODI funding and moves as an ordinary LRS remittance instead.
- Choose an LLC only once you are ready for Form FC and an Annual Performance Report each year.
- Plan remittances within the $250,000 annual LRS cap, budgeting the 20% TCS above Rs 10 lakh as a cash-flow item, not a permanent cost.
- Reconfirm your FEMA residency status with your bank once relocated, since it can diverge from your Income-tax Act residency for a period.
- Confirm your Georgian tax residency position separately, since Small Business Status alone does not make you tax resident here.
Timeline and cost
The Georgian side moves quickly regardless of structure: an IE with Small Business Status is typically registered within days in person, or two to three weeks under power of attorney. The Indian side is not a residency delay - none of the exit mechanics other guides describe apply here - it is routing funding through the LRS within the annual cap, filing Form FC if you choose an LLC, and confirming your Tax Residency Certificate position for treaty purposes.
The verdict for an Indian national
India is one of the strongest fits in this cluster, for structural reasons rather than aggressive planning. There is no CFC regime reaching a Georgian IE or LLC, no exit tax on departure, a working treaty, and an RNOR window that can shelter foreign income for years. The real limit is the $250,000 annual remittance cap and the TCS and FEMA paperwork that come with using it - a cash-flow and compliance question, not a tax cost. Plan the remittance timing and the entity choice properly, and this holds up cleanly.
We'll work through whether RNOR status genuinely covers your Georgian income, whether an IE or an LLC fits your FEMA and LRS position better, and how to sequence funding within the remittance cap, before you register anything. Written summary included.
See what it costs
Our full country-by-country guide compares the treaty position and headline trap for every country we cover, including moving from Turkey to Georgia.
Key takeaways
- Confirm which residency test applies: the 182-day test, the 60-plus-365-day test, or the substituted 120-day test under the Rs 15 lakh deemed-resident rule.
- RNOR status can shelter genuinely foreign Georgian income for a multi-year window, typically two to three years, and exempts Schedule FA reporting during that window.
- India has no CFC legislation and no exit tax, though GAAR and POEM remain live for an entity lacking genuine substance or managed from India.
- Funding is capped at $250,000 a year under the LRS, with 20% TCS above Rs 10 lakh recovered at filing time rather than lost.
- An IE cannot receive formal ODI funding and moves as an ordinary remittance instead; an LLC can, but then owes Form FC and an annual performance report.
- FEMA's own residency definition can diverge from your Income-tax Act status for a period, so reconfirm it with your bank rather than assuming they match.
Frequently asked questions
Does moving to Georgia automatically end my Indian tax residency?
No. Indian tax residency under section 6 depends on your actual day count in India, not on registering a foreign business. You need to fall below both the 182-day and the 60-plus-365-day tests, unless the deemed-resident rule changes which test applies to you.
What is the deemed-resident rule and does it apply to me?
Under section 6(1A), an Indian citizen with total income other than foreign-source income exceeding Rs 15 lakh in a financial year is deemed resident if not liable to tax in any other country by reason of domicile, residence or a similar criterion. It does not apply if another country genuinely claims you as its tax resident.
What is RNOR status and why does it matter here?
Resident but Not Ordinarily Resident is a transitional status under section 6(6) for someone who was non-resident in 9 of the preceding 10 years, or present in India for 729 days or less across the preceding 7. An RNOR is taxed only on Indian-source income, so genuinely foreign Georgian earnings fall outside Indian tax during this window.
Does India have an exit tax?
No. Ceasing Indian tax residency is not itself a taxable event, and there is no deemed disposal of assets triggered by departure, unlike several other countries covered in this cluster.
Does India have CFC rules, or does Place of Effective Management reach a small Georgian LLC?
India has no enacted CFC legislation - a version was proposed in the 2010 Direct Taxes Code bill but never became law. POEM can deem a foreign company Indian-resident if effectively managed from India, but CBDT's own circular confirms it does not apply below Rs 50 crore turnover, which covers nearly every solo-founder Georgian LLC.
What is the Liberalised Remittance Scheme limit, and how much TCS applies to funding a Georgian company?
The LRS limit is USD 250,000 per financial year per individual, covering current and capital account remittances in aggregate across all your banks, whichever entity receives the money. The first Rs 10 lakh remitted is free of TCS; above that, remittances for purposes other than education or medical treatment - funding a foreign business included - attract 20% TCS, collected upfront but credited against your final income tax liability.
Can I fund a Georgian IE the same way as a Georgian LLC under FEMA?
Not quite. ODI requires the foreign entity to have limited liability, so a Georgian IE cannot be the subject of formal ODI and is instead funded through ordinary LRS remittance categories. A Georgian LLC qualifies for ODI, which brings extra filings - Form FC and an annual performance report - that an IE does not require.
Is there a tax treaty between India and Georgia?
Yes, in force since 8 December 2011, with a 90-day permanent establishment threshold and 10% withholding on dividends, interest and royalties, and the standard tie-breaker sequence for resolving dual residency.