Knowledge base / IT and freelancing
Armenia or Georgia: where should a freelancer register as a sole proprietor?
The numbers side by side
Armenia
- 1% turnover tax for IT activities on the government list, until the end of 2031.
- Other services: 10% of turnover, which can be reduced by part of your costs.
- Limit: AMD 115 million of turnover a year. Above that, the general regime and 20% VAT.
- Reporting and payment: quarterly.
- From 2026: a health insurance contribution of AMD 129,600 a year if previous-year income exceeded AMD 2.4 million.
Georgia
- Small business status: 1% of turnover.
- Limit: GEL 500,000 a year. Exceed it in one year and the rate is 3% of turnover. Two years in a row and the status is removed.
- Not available for consulting and certain professions (lawyers, doctors, architects and others).
- Returns: monthly, by the 15th.
- The sole proprietor must work alone, without partners. Employees and contractors are allowed.
Which suits whom
- Developer, tester, DevOps. In Armenia, 1% when you work under an IT code on the list, with a limit several times higher than Georgia's. Usually the best option.
- Designer, marketer, copywriter. In Armenia these services are generally taxed at 10%. In Georgia, 1%, provided the activity is not on the exclusion list.
- Consultant. Small business status is not available in Georgia. In Armenia, 10% turnover tax or the general regime.
- Turnover above USD 200,000 a year. The Georgian limit will be tight. Armenia leaves more headroom.
What to compare besides the rate
- Where you live
Tax residency usually starts after 183 days in a country in a year. A sole proprietorship in a country where you do not live may not protect you from taxes where you spend most of your time. - Banking
Banks in both countries check where your income comes from and who your clients are. Have contracts and invoices ready in advance. On Armenian banks, see our article on business bank accounts. - Platforms
Upwork, Deel and direct clients pay to both Armenia and Georgia. What matters is that payments match your contracts. More in our article on Upwork and Deel. - Right to stay
Russian and Belarusian citizens are EAEU nationals in Armenia: they can work without a permit and stay up to 180 days a year without a residence permit. For longer stays you need a residence permit.
Common mistakes
- Registering "wherever it is cheaper" without considering where you actually live and pay tax.
- Not checking your activity against the government list or the exclusion list.
- In Georgia, not obtaining small business status straight away. Income earned before you get it is taxed at the standard rate.
Frequently asked questions
Is it better for a developer to register as a sole proprietor in Armenia or Georgia?
Armenia is usually the better fit: IT activities on the government list pay 1% of turnover with a limit of AMD 115 million a year, several times higher than Georgia's limit.
What is the turnover limit for Georgia's 1% small business status?
GEL 500,000 a year. If you exceed it in one year the rate becomes 3% of turnover, and two years in a row the status is removed.
Can a designer or marketer pay 1% tax in Armenia?
Generally not. In Armenia these services are usually taxed at 10% of turnover. In Georgia they can qualify for 1%, provided the activity is not on the exclusion list.
Can Russians and Belarusians work in Armenia without a residence permit?
As EAEU nationals they can work without a permit and stay up to 180 days a year without a residence permit. Longer stays require a residence permit.
Choosing a country for your sole proprietorship?
We will calculate your Armenian taxes for your activity and turnover, register you as a sole proprietor and take care of reporting. We work in English and Russian.
Sources: EY Armenia — 1% rate for IT; Alpha Accounting — Armenian taxes in 2026; ExpatHub Georgia — small business status in Georgia; State Revenue Committee of Armenia — src.am.