LLC vs Individual Entrepreneur in Georgia – Which Is Better for You?
5 minute read | Last Updated 30th December 2025
Written by: Mariam Santeladze
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Introduction
Thinking of registering your business in Georgia? This is a great decision, as Georgia consistently ranks among the top ten easiest countries to do business in by the World Bank.
Before registering your company in Georgia, one of the first and most important decisions you must make is choosing the right business structure. The two most common options are registering an LLC in Georgia or operating as an Individual Entrepreneur (IE). Each structure has distinct legal, tax, and operational implications. If you are interested in what other business structures are available, we explain in depth here.
This article explains the key differences between an LLC in Georgia and an Individual Entrepreneur, helping you decide which option best suits your business goals.
Overview of Business Structures in Georgia
Georgia offers several legal forms for doing business, but the most widely used are:
- Limited Liability Company (LLC)
- Individual Entrepreneur (IE)
Both options are available to foreigners and can be registered quickly through the Public Registry. Choosing between an LLC in Georgia and an IE depends on factors such as liability protection, tax planning, business scale, and long-term strategy.
What Is an LLC in Georgia?
According to Georgian business law, an LLC is a legal entity that exists independently from its owners (the shareholders). It can be owned by one or multiple individuals or companies, including foreign nationals.
Key Characteristics of an LLC in Georgia:
- Limited liability: shareholders are not personally liable for company debts
- Can engage in almost any lawful business activity
- May be 100% foreign-owned
- Suitable for medium to large businesses
- Can hire employees and enter contracts independently
An LLC is often preferred by entrepreneurs who want to scale, attract partners, or reduce personal risk.
What Is an Individual Entrepreneur (IE)?
An Individual Entrepreneur is a self-employed natural person registered to conduct business under their own name. The IE does not create a separate legal entity.
Key Characteristics of an IE:
- Simple and fast registration
- Low compliance and reporting requirements
- Eligible for Small Business Status (1% tax)
- Full personal liability for business obligations
- Best suited for freelancers, consultants, and solo entrepreneurs
While easy to operate, an IE offers fewer protections compared to an LLC.
Liability: LLC vs Individual Entrepreneur
When deciding between these two options, consider the extent of personal and business liability involved.
LLC in Georgia:
- Liability is limited to the company’s assets
- Personal assets of shareholders are protected
- Suitable for higher-risk or capital-intensive businesses
Individual Entrepreneur:
- Unlimited personal liability
- Personal assets may be used to satisfy business debts
For entrepreneurs concerned about legal risk, an LLC provides a significantly higher level of protection.
Taxation: LLC in Georgia vs Individual Entrepreneur
According to the Revenue Service of Georgia, taxation of an LLC is as follow:
- Corporate profit tax: 15%, payable only when profits are distributed
- Reinvested profits are not taxed
- Dividend tax: 5%
- Effective for businesses planning reinvestment or growth
Taxation of an Individual Entrepreneur:
- Standard income tax: 20%, or
- 1% tax rate under Small Business Status (up to 500,000 GEL turnover)
For small-scale service providers, the IE structure can be more tax-efficient. However, for larger or growing businesses, an LLC in Georgia often offers better long-term tax planning opportunities. For more information on tax policies in Georgia, refer to the OECD tax principles.
Business Scale and Growth Potential
LLC in Georgia Is Better If You:
- Plan to grow or scale your business
- Intend to hire employees
- Want to attract partners or investors
- Need a strong corporate structure
- Operate in trade, manufacturing, or international services
Individual Entrepreneur Is Better If You:
- Work alone as a freelancer or consultant
- Offer professional or digital services
- Want minimal administration
- Prioritize simplicity over scalability
Most commonly, entrepreneurs start as IEs and later transition to an LLC as their business grows.
Banking and Business Perception
Banks, counterparties, and international partners often perceive an LLC in Georgia as more stable and professional than an Individual Entrepreneur.
- Easier access to corporate banking services
- Better credibility with international clients
- Clearer ownership and governance structure
For businesses dealing with foreign partners, an LLC may offer a reputational advantage.
Residency and Immigration Considerations
Both structures can support residence permit applications, but an LLC in Georgia is often more suitable when:
- Employing staff
- Demonstrating economic substance
- Applying for long-term or investment-based residency
Individual Entrepreneurs can also qualify for residence permits, especially if they meet income or turnover thresholds.
Compliance and Administration
LLC in Georgia:
- Requires accounting and annual reporting
- Must maintain corporate records
- Slightly higher administrative costs
Individual Entrepreneur:
- Minimal reporting
- Simplified accounting
- Lower administrative burden
Conclusion
The best choice depends on your business model, risk tolerance, and future plans. Both an LLC in Georgia and an Individual Entrepreneur structure offer strong advantages, but they serve different purposes. While the IE model is ideal for small, service-based businesses, an LLC in Georgia provides superior liability protection, scalability, and credibility for growing enterprises.
Orson assists clients with choosing the optimal business structure, registering companies or individual entrepreneurs, and ensuring full tax and legal compliance in Georgia.
For tailored advice, contact us at info@orsonco.com or via WhatsApp / +995 511 778 577.
