How to Move Your Freelance Business from Germany to Georgia

Moving your freelance business from Germany to Georgia to benefit from the 1% tax rate is a structured process — not a quick weekend decision. Done correctly, it achieves a clean, legally solid exit from the German tax system and a fully compliant entry into Georgia's IE regime. Done incorrectly, you can end up liable to both German and Georgian tax authorities simultaneously.

This guide covers every step in the correct sequence, with the specific German and Georgian procedures you need to follow.

The Two-Part Process: Germany Exit + Georgia Entry

The relocation involves two parallel tracks that must both be completed for full tax optimization:

• Germany Exit: Properly deregistering your business activity and personal residence, filing final tax returns, canceling health insurance
• Georgia Entry: Registering as an IE, opening a bank account, spending the required time to establish tax residency

The most critical insight: you cannot simply stop paying German taxes by moving abroad. Germany has extensive provisions for extended tax liability (beschränkte Steuerpflicht, erweiterte beschränkte Steuerpflicht) that can keep you in the German tax net for years if you don't complete the exit procedures correctly. See our dedicated article on Wegzugsteuer and leaving the German tax system for details.

Timeline Overview

Step 1: Notify Your Finanzamt in Advance

Your local Finanzamt (tax office) should be informed of your planned departure in writing, typically 2–3 months in advance. This is not legally required before the move itself, but it starts the formal process of closing your file and is considered best practice.

The letter should state:

• Your intended departure date
• Your destination country (Georgia)
• That you are ceasing self-employed activity in Germany
• Your forwarding address for correspondence

The Finanzamt will issue a final tax assessment (Steuerbescheid) covering your last period of German tax residency. You are required to file a final Einkommensteuererklärung for the year of departure, covering January 1 through your Abmeldung date.

Step 2: Deregister Your Gewerbe (Gewerbetreibende Only)

If you are a Gewerbetreibender (commercial freelancer, e-commerce seller, etc.) rather than a Freiberufler, you must file a Gewerbeabmeldung (business deregistration) at your local Ordnungsamt or Gewerbeamt. Freiberufler do not register a Gewerbe, so they can skip this step.

The Gewerbeabmeldung form is typically available online or at the local authority. Required information:

• Your personal details and address
• Your current business address
• The date you are ceasing the trade
• Your business registration number (Gewerbeschein number)

A copy will be automatically forwarded to the Finanzamt and IHK (Chamber of Commerce). IHK membership fees cease on the deregistration date.

Step 3: File Your Final German Tax Returns

You must file complete tax returns for all outstanding years plus the year of departure. Key documents:

• Einkommensteuererklärung — personal income tax return for every year up to and including departure year
• Umsatzsteuererklärung — annual VAT return if you were registered for VAT (Umsatzsteuer)
• EÜR (Einnahmenüberschussrechnung) — profit and loss statement (for Freiberufler and smaller businesses)

Step 4: Deregister Your Residence (Abmeldung)

The Abmeldung is the formal deregistration of your German residence at your local Einwohnermeldeamt (registration office). This is the single most important step for establishing that you have left the German tax system.

Key facts about Abmeldung:

• Must be done in person at your local Einwohnermeldeamt (you cannot do it remotely)
• Timing: you can file Abmeldung up to 1 week before your actual departure, or within 2 weeks after
• You will receive an Abmeldebestätigung (deregistration certificate) — keep this document permanently
• If you have a spouse or children remaining in Germany, the process is more complex — seek professional advice

The Abmeldung triggers notification to the Finanzamt, health insurance provider, pension insurance, and other authorities. It is the official start date of your non-residency in Germany.

Step 5: Cancel German Health Insurance

Health insurance in Germany does not automatically terminate when you leave. You must actively cancel your GKV or PKV membership.

Canceling GKV (Statutory Health Insurance)

You can cancel your GKV membership by providing proof that you are:

• Moving your primary residence abroad (provide your Abmeldebestätigung), and
• Obtaining comparable health coverage in your new country of residence

Send the cancellation letter with your Abmeldebestätigung to your Krankenkasse. The cancellation takes effect at the end of the month following receipt, or at the date of departure — whichever is documented. Note: GKV can require up to 2 months' notice.

Canceling PKV (Private Health Insurance)

PKV contracts have standard notice periods, typically 3 months to the end of the contractual period (often end of year). Check your specific contract. You should start this process early — ideally 3–4 months before planned departure.

Step 6: Register Georgian IE (Remote)

You do not need to be physically in Georgia to register an IE. StartGE handles the process remotely through a notarized power of attorney (Vollmacht), which authorizes them to act on your behalf at the Revenue Service.

The process involves:

1. Notarize the power of attorney — have the document notarized locally in Germany at any notary (Notar). The document is typically provided by StartGE as a template.
2. Submit documents to StartGE — passport copy, the notarized POA, and basic personal information
3. Revenue Service registration — StartGE files with Georgia's National Agency of Public Registry (NAPR) and Revenue Service
4. Receive your TIN — Georgian Tax Identification Number (SAIDENTIFIKACIO NOMERI) issued within 1–3 business days
5. Apply for Small Business Status — the 1% rate requires explicit application; StartGE includes this in their registration package
6. Register for VAT if applicable — required only if your turnover exceeds 100,000 GEL (~€34,000) annually. Below this threshold, VAT registration is voluntary.

Timeline: approximately 2–5 business days for the full registration. Cost: €699 all-in through StartGE.

Step 7: Open a Georgian Bank Account

A Georgian bank account is essential for receiving client payments through your IE. The main banks accepting foreign nationals include TBC Bank, Bank of Georgia, and Credo Bank.

Opening requirements typically include:

• Your passport
• Your Georgian IE registration documents (TIN certificate)
• In-person visit to a branch (for most banks, though TBC Bank has increasingly flexible remote options)

Many freelancers combine bank account opening with a short trip to Tbilisi during the first months of their transition. StartGE's registration package includes introduction to banking partners and facilitated account opening.

Step 8: Establish Georgian Tax Residency (183 Days)

For full optimization — paying only Georgian taxes and no German taxes — you must establish Georgian tax residency by spending at least 183 days per calendar year in Georgia.

Key points:

• Days are counted in a 12-month rolling period or by calendar year, depending on which treaty provisions apply
• You must simultaneously have terminated German tax residency (Abmeldung + no German permanent home)
• A certificate of tax residency from the Georgian Revenue Service is available on request and useful for asserting non-residency to German authorities

During the first year of transition, you may have a split-year tax situation — partly German, partly Georgian. A qualified cross-border tax advisor can structure this correctly.

Step 9: Notify Clients and Update Invoicing

Once your Georgian IE is registered and your bank account is open, you should:

• Update your invoices to show your Georgian IE name, address, and TIN
• Issue invoices from your Georgian IE (not from a German entity)
• Inform clients of your new banking details (Georgian IBAN)
• Consider whether any existing German client contracts need updating — most simply need a new entity name in payment details

German clients paying a Georgian IE are generally not required to withhold any German tax. Invoice income flows directly to your Georgian IE as turnover subject to 1%.

Ongoing Obligations in Georgia

Georgian IE tax filing is straightforward:

• Monthly declaration: File a turnover declaration with the Revenue Service by the 15th of the following month
• Monthly payment: Pay 1% of the previous month's turnover by the 15th
• Annual declaration: A summary annual return is also required
• Social contribution: Pay approximately 300 GEL/year in pension contributions

StartGE offers monthly accounting support, which most freelancers find worthwhile given the minimal cost and complexity involved.

Common Mistakes to Avoid

1. Keeping a German apartment — even a furnished room you "occasionally use" can constitute a feste Wohnstätte and maintain German tax residency
2. Spending more than 183 days in Germany — even after Abmeldung, extended stays can trigger tax residency rules
3. Not applying for Small Business Status — without explicitly applying, your IE is taxed at the standard 20% rate, not 1%
4. Continuing to invoice from old German business structure — income must flow through your Georgian IE to be taxed at 1%
5. Ignoring the Wegzugsteuer — if you own shares in a GmbH or other company, get specific advice before leaving Germany