Georgia\u2019s Innovation Law<\/b><\/p>\n
Georgia has introduced a new innovation-support framework under the Law on Innovations and related Tax Code amendments, effective from <\/span>24 September 2025<\/b>. The reform allows companies to obtain one of three official statuses:<\/span><\/p>\n Each status provides specific tax incentives and is granted through the Innovation Registry administered by GITA. Below is a practical summary of benefits, eligibility, application timelines and what is required to maintain status.<\/span><\/p>\n \u00a0<\/span><\/p>\n 1) Innovative Startup Status<\/b><\/p>\n Tax benefits (up to 10 years, phased)<\/b><\/p>\n Innovative Startup status is the most generous and applies in stages:<\/span><\/p>\n o <\/span>0% Personal Income Tax (PIT) on employee salaries<\/b> o <\/span>5% PIT on salaries<\/b><\/p>\n o <\/span>5% Corporate Income Tax (CIT)<\/b> on distributed profit.<\/span><\/p>\n o <\/span>10% PIT on salaries<\/b><\/p>\n o <\/span>10% CIT<\/b> on distributed profit.<\/span><\/p>\n For Innovative Startup status, the tax relief is phased and tied to renewal thresholds. The company receives Year 1\u20133 benefits based on the initial qualification, but to continue into <\/span>Years 4\u20136<\/b> it must confirm that it has attracted a <\/span>significantly higher cumulative investment (around 5 million GEL)<\/b> and still meets all innovation and compliance criteria. To extend the status further into <\/span>Years 7\u201310<\/b>, the cumulative investment requirement increases again (around <\/span>15 million GEL<\/b>). In other words, the state expects startups to demonstrate real scale-up through verified funding at each renewal stage, otherwise the preferential tax regime ends.<\/span><\/p>\n Important restriction:<\/b> Innovative Startup status cannot be used simultaneously with other special IT regimes (such as International Company or Virtual Zone Person).<\/span><\/p>\n Eligibility criteria (core requirements)<\/b><\/p>\n A company may qualify if it:<\/span><\/p>\n o <\/span>\u2265 100,000 GEL investment<\/b> from an accredited venture\/angel\/accelerator source, <\/span>or<\/b><\/p>\n o <\/span>\u2265 150,000 GEL grant funding<\/b> from a recognized innovation or development program.<\/span><\/p>\n Documents and audit requirement<\/b><\/p>\n Typical submission package includes:<\/span><\/p>\n Keeping the status<\/b><\/p>\n \u00a0<\/span><\/p>\n 2) Innovative SME Status<\/b><\/p>\n Tax benefits<\/b><\/p>\n Innovative SMEs receive an R&D-based tax incentive:<\/span><\/p>\n This effectively lowers the tax cost of dividends for R&D-intensive businesses.<\/span><\/p>\n Eligibility criteria (including SARAS category rule)<\/b><\/p>\n To apply, a company must:<\/span><\/p>\n o <\/span>at least 100,000 GEL<\/b>, and<\/span><\/p>\n o <\/span>at least 5% of annual revenue<\/b>.<\/span><\/p>\n o <\/span>owning a patent or registered\/deposited software tied to the R&D work,<\/span><\/p>\n o <\/span>purchasing R&D services from accredited\/certified entities,<\/span><\/p>\n o <\/span>maintaining R&D cost accounting in line with approved rules.<\/span><\/p>\n Documents and audit\/verification requirement<\/b><\/p>\n The application typically includes:<\/span><\/p>\n Keeping the status<\/b><\/p>\n o <\/span>it still qualifies as Category 3 or 4 under SARAS criteria,<\/span><\/p>\n o <\/span>R&D spending thresholds are met,<\/span><\/p>\n o <\/span>R&D costs are properly tracked and supported.<\/span><\/p>\n \u00a0<\/span><\/p>\n 3) R&D Company (R&D Service Provider) Status<\/b><\/p>\n Tax benefits<\/b><\/p>\n R&D Companies enjoy stable low rates:<\/span><\/p>\n Eligibility criteria<\/b><\/p>\n This status is for companies whose <\/span>main business is delivering R&D services<\/b> (e.g., engineering R&D, software R&D, applied science, lab\/prototype work). Approval focuses on whether the company:<\/span><\/p>\n Documents and audit\/verification requirement<\/b><\/p>\n Applicants typically submit:<\/span><\/p>\n Keeping the status<\/b><\/p>\n \u00a0<\/span><\/p>\n Application Timeline (How long it takes)<\/b><\/p>\n The law sets clear deadlines mainly for GITA\u2019s review stage:<\/span><\/p>\n o <\/span>GITA issues a request for corrections\/additional documents.<\/span><\/p>\n o <\/span>The applicant has <\/span>10 working days<\/b>\n
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\n<\/b>(applies within a 10,000 GEL monthly cap per employee set by the Government).<\/span><\/p>\n\n
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\n<\/span>(Larger Category 1\u20132 entities are not eligible for Innovative SME status.)<\/span><\/i><\/li>\n\n
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\n<\/b>From the moment your application is submitted, GITA has <\/span>15 working days<\/b> to review and verify compliance.<\/span><\/li>\n