More Ukrainians have registered a Georgian business through this kind of move than any other nationality outside the post-Soviet region, and most of them are not comparing Georgia's 1% against Ukraine's 18% general rate. They are comparing it against Group 3 of the simplified tax system, which already charges 5% of turnover, or against Diia.City, which taxes qualifying IT income at 5% too. That is a genuinely smaller gap than most guides assume, and pretending otherwise would not serve the tens of thousands of Ukrainians who have already made this move for reasons well beyond tax. This guide runs the honest numbers, then works through residency, the 2022 CFC rules, and the currency controls that have shaped this move since 2022.
What a Ukrainian freelancer actually pays, here and there
A Ukrainian IT freelancer invoicing 3,600,000 UAH a year, roughly $80,000 at current exchange rates, most commonly registers as a FOP (individual entrepreneur) on Group 3 of the simplified system, the tier built for exactly this kind of business. Group 3 charges 5% of turnover for a taxpayer not registered for VAT, with an annual turnover ceiling of 10,091,049 UAH for 2026, comfortably above most solo freelance income. On top of that, every FOP owes a fixed unified social contribution (ESV), 1,902.34 UAH a month for 2026 regardless of income, payable even in a month with no invoicing at all.
| Ukraine (FOP, Group 3, non-VAT) | Georgia (Small Business Status) | |
|---|---|---|
| Turnover | 3,600,000 UAH (~$80,000) | Same turnover |
| Single tax (5% of turnover) | 180,000 UAH | 36,000 UAH-equivalent (1%) |
| Unified social contribution (ESV) | ~22,828 UAH | None required by the status itself |
| Total, all-in | ~202,828 UAH (~5.6%) | ~36,000 UAH-equivalent (~1%) |
That is a real gap, and Georgia is still the cheaper side of it by a factor of roughly five. It is not, however, the dramatic multiple a reader coming from Germany or the United States would see elsewhere in this cluster. Diia.City, Ukraine's dedicated regime for qualifying tech companies, pushes the comparison closer still: specialists engaged under a gig contract by a Diia.City resident company pay a flat 5% personal income tax, alongside a fixed social contribution of 22% of the minimum wage, provided the company maintains the qualifying headcount and pay levels described in PwC's overview of Diia.City tax support.
Does Georgia's 1% actually apply to your income in the first place
Small Business Status only applies to Georgian-source income, and for services that generally means work physically performed in Georgia, not income invoiced through a Georgian registration while living in Kyiv or Lviv. We cover this fully in Georgia's 1% tax and the source test specifically in Georgian-source income rules. The test applies to a Ukrainian national exactly as it does to anyone else in this cluster, which is precisely why the residency and structuring questions below matter as much as the headline rate.
What Ukraine does when you leave
Ukrainian tax residency follows a hierarchy rather than a single test. First, where you have your centre of vital interests, generally where your family lives or where you are registered as a business entity, decides the question if it can be determined at all. If it cannot be, or you have no permanent home in any state, the 183-day count in a tax year decides it instead. If neither test resolves it, Ukrainian citizenship itself makes you a Ukrainian tax resident by default. That third test only bites in genuinely ambiguous cases, but for a citizen who has not cleanly closed out their Ukrainian ties, and whose day count is split between countries, citizenship becomes the deciding factor rather than a backstop that never gets reached. Since martial law began in 2022, Ukraine has repeatedly extended relief on filing and payment deadlines for taxpayers unable to comply because of the war, but the residency, tax and CFC tests themselves apply on their ordinary terms throughout.
Georgia originally sat on Ukraine's list of jurisdictions for transfer-pricing and low-tax purposes under Cabinet of Ministers Resolution 1045, but was specifically removed in January 2018, alongside Estonia, Latvia, Malta and Hungary, and has not reappeared on any update since. Being off the list means transactions with a genuine Georgian business are not treated as controlled transactions requiring heavier documentation. Ukraine and Georgia have also had a double tax treaty in force since 1999, confirmed on Georgia's Ministry of Finance treaty list, with a working tie-breaker article - permanent home, then centre of vital interests, then habitual abode, then nationality - available if both countries ever assert a residency claim on the same person.
Ukraine's CFC regime, under Article 39-2 of the Tax Code, came into force on 1 January 2022. A controlling person is anyone holding more than 50% of a foreign company alone, more than 10% where Ukrainian residents together hold more than 50%, or anyone exercising actual control regardless of formal shareholding. The regime's own definition requires the foreign entity to be a legal person, capable of holding assets in its own right, and the State Tax Service has confirmed directly, in a published response, that a Ukrainian resident who registers a sole proprietorship abroad is not treated as a controlling person of a CFC, precisely because a sole proprietorship falls outside that definition. For an IE, Ukraine's CFC rules do not engage.
A Georgian LLC is different: a genuine separate legal person, squarely within the CFC definition if the control threshold is met. Total CFC income under the equivalent of EUR 2,000,000 is exempt from Ukrainian tax on the profit itself, a threshold most solo-owner Georgian LLCs sit comfortably under, but the exemption only removes the tax. It does not remove the notification of acquiring an interest, due within 60 days of the event, or the annual CFC report alongside your personal return, both of which remain due regardless of whether any tax is actually owed. Treating the EUR 2,000,000 exemption as a reason to skip the paperwork entirely is the most common way this goes wrong, and Ukraine's participation in automatic exchange of financial account information means a Georgian account is not indefinitely invisible to Kyiv.
The National Bank of Ukraine has operated a wartime foreign-exchange regime since 24 February 2022, easing it in stages since, most recently 14 January 2026. Limits on individual transfers abroad, and separate rules for dividends and loan repayments, continue to apply and change often enough that the current figure should always be checked at the point of transfer rather than assumed from an older article, including this one.
The steps, in order
- Close out the centre-of-vital-interests test cleanly before assuming residency has moved, since an ambiguous case defaults to Ukrainian citizenship as the tie-breaker.
- Track the 183-day count in parallel, in case the centre-of-vital-interests test cannot be determined on its own.
- 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 over an LLC for most solo setups, since an IE sits outside Ukraine's CFC rules entirely, confirmed directly by the State Tax Service.
- If you use an LLC, file the 60-day acquisition notification and the annual CFC report anyway, even where the EUR 2,000,000 threshold exempts the profit from tax.
- Check the current NBU transfer limits before moving funds, rather than relying on an older figure, since the framework has eased in stages but still changes.
- Run the Group 3 or Diia.City comparison against your actual numbers, not the general 18% rate, before deciding how much the tax case alone is really worth to you.
Timeline and cost
The Georgian side moves quickly: an Individual Entrepreneur with Small Business Status typically registers within days in person, or two to three weeks under power of attorney for anyone not yet able to travel. The greater variable for a Ukrainian national specifically is moving funds under the current NBU framework, and confirming whether the centre-of-vital-interests test is genuinely closed before assuming residency has moved with the registration.
We'll work through your residency position under the three-test hierarchy, whether an IE or an LLC makes sense given the CFC reporting difference, and what actually needs filing in Ukraine even where the EUR 2,000,000 exemption removes the tax itself.
See what it costs
The verdict for a Ukrainian national
Georgia works with conditions for a Ukrainian national, and the conditions here are lighter than in most of this cluster: a real treaty is in force, Georgia carries no blacklist penalty, and an Individual Entrepreneur sits outside the CFC rules entirely, confirmed directly by the tax authority rather than left to interpretation. The one test worth taking seriously is residency itself, specifically closing out the centre-of-vital-interests question cleanly enough that citizenship never becomes the deciding tie-breaker by default.
The honest caveat is the one this guide opened with: against Group 3's 5% or Diia.City's 5%, the tax-rate case for this specific move is a real but modest four-to-five-point spread, not the dramatic multiple a reader coming from a higher-tax jurisdiction sees elsewhere in this cluster. For the tens of thousands of Ukrainians who have already relocated to Georgia, the decision has rarely been a pure tax calculation, and it should not need to be. For the neighbouring country with the largest actual registration volume of any nationality on this site, see moving from Russia to Georgia, where the absence of any tax treaty makes for a materially different analysis. Our full country-by-country guide compares the treaty position and headline trap across every country we cover, and a free consultation is the fastest way to check your specific numbers against the conclusions here.
Key takeaways
- Close out the centre-of-vital-interests test cleanly before relying on the 183-day count as a backup, since an unresolved case defaults to citizenship as the tie-breaker.
- Run the comparison against Group 3's 5% or Diia.City's 5%, not the general 18% rate, before deciding how much the move actually saves you.
- Register as an Individual Entrepreneur for most solo setups, since it sits outside the 2022 CFC rules entirely.
- File the 60-day acquisition notification and annual CFC report for a Georgian LLC regardless of the EUR 2,000,000 tax exemption.
- Check the live NBU transfer limits before moving funds, since the wartime framework still changes in stages.
- Do not assume martial-law relief covers anything beyond filing and payment deadlines; the substantive residency and CFC rules apply as before.
Frequently asked questions
How does Georgia's 1% actually compare to what I pay now in Ukraine?
Closer than most comparisons suggest. Group 3 of the simplified tax system already charges most Ukrainian freelancers 5% of turnover plus a fixed monthly social contribution, for an effective rate around 5.6% all-in. Georgia's 1% is still meaningfully cheaper, but by a factor of roughly five rather than the far larger multiple readers moving from higher-tax countries see elsewhere in this cluster.
What is Diia.City and how does it compare to Georgia's 1%?
Diia.City is Ukraine's dedicated regime for qualifying technology companies, taxing specialists engaged under a gig contract at a flat 5% personal income tax plus a fixed social contribution of 22% of the minimum wage. It requires the underlying company to hold Diia.City resident status and meet headcount and pay thresholds, so it is not a general option the way Group 3 is, but where it applies the comparison to Georgia is similarly modest.
How is Ukrainian tax residency determined?
By a three-step hierarchy: first your centre of vital interests, generally family location or business registration, then the 183-day count if that cannot be determined, and finally Ukrainian citizenship as a default tie-breaker if neither test resolves it.
Has Ukraine relaxed its residency rules because of the war?
No, not the substantive tests themselves. Martial-law relief has focused on extending filing and payment deadlines without penalty for taxpayers unable to comply because of the war. The centre-of-vital-interests, 183-day and citizenship tests apply exactly as they did before 2022.
Is Georgia on Ukraine's blacklist of low-tax jurisdictions?
No. Georgia was removed from Ukraine's list of jurisdictions for transfer-pricing and low-tax purposes in January 2018 and has not reappeared on any update since.
Do Ukraine's CFC rules reach a Georgian Individual Entrepreneur?
No. Ukraine's State Tax Service has confirmed directly that a sole proprietorship registered abroad does not meet the legal-entity definition Article 39-2 requires for a controlled foreign company, so a Ukrainian resident running a Georgian IE is not treated as a controlling person under the CFC rules.
Do Ukraine's CFC rules reach a Georgian LLC?
Yes, if the control threshold under Article 39-2 is met. Total CFC profit under the equivalent of EUR 2,000,000 is exempt from tax, a threshold most single-owner Georgian LLCs sit under, but the notification and annual reporting obligations continue regardless of whether the tax exemption applies.
Is there a tax treaty between Ukraine and Georgia?
Yes, in force since 1999, confirmed on Georgia's own Ministry of Finance treaty list, with a standard tie-breaker article for resolving dual-residency claims.
Can I actually move my money out of Ukraine to fund a move to Georgia?
Generally yes under the current framework, which the National Bank of Ukraine has eased in stages since 2022, most recently from January 2026. Specific limits on individual transfers, dividends and loan repayments still apply and change reasonably often, so the current figure is worth checking at the point of transfer rather than assumed from an older source.