Georgia, Bitcoin and taxes: the best combination for mining

In March 2020 well-known Internet portal 99 bitcoins.com included Georgia in the top 10 bitcoin-friendly countries. Very fair decision. For many, it may be news that this small country takes 3rd place in the world in cryptocurrency mining (after China and Venezuela), although it was second only a few years ago. Although the mining of bitcoins and other virtual money in Georgia is not officially allowed, the loyal position of the government, as well as favorable taxation and cheap electricity create favorable conditions for the registration of crypto companies in Georgia.

Why is it profitable to register a crypto company in Georgia?

Cryptocurrency mining in the world is gaining momentum and Georgia not only does not lag behind in this trend, but also creates quite favourable conditions for attracting foreign investors who want to develop in this area. Let’s look into key attractions of Georgian jurisdiction for cryptocurrency market participants:

Cheap electricity

About 6 cents per 1 kW, and free of charge in the mountainous regions.

Affordable banking

It will be possible to open a personal account in a Georgian bank and receive a payment card of the international system as part of package services for 50 GEL per year (about 15 USD). In addition, Georgian banks have premium packages that provide users with many advantages, one of which is free cash withdrawal from ATMs around the world.

Lack of currency regulation

Georgian banks do not set restrictions on operations with foreign currency. All transactions are carried out quickly, even at an international scale, as well as outside the country borders.

Highest confidentiality of business

Georgia is not a participant in the automatic exchange of CRS information. And this means that no one will know about the financial turnover that takes place in local banks.

Fast turnaround time for company registration

In Georgia, it will be possible to register a company within 1 business day, furthermore, no additional restrictions or obstacles are imposed on foreigners.

Loyal taxation

If a foreigner registers a company in the Free Industrial Zone of Georgia and receives revenue only from foreign counterparties, the tax burden will decrease to nil.

A special tax regime – “Small Business” (annual turnover of up to 500,000 GEL) has been specially developed for private entrepreneurs. Having this status, an entrepreneur pays only 1% of revenue per year.

Work with PayPal

The international payment system is fully operational in Georgia. Payment cards of Georgian banks can be linked to a PayPal account and take full advantage of electronic payments.

Loyal migration policies

Foreigners from more than 90 countries can visit Georgia and stay in the country 365 days a year without a visa.

All of the above makes it very profitable to register a crypto exchange in Georgian jurisdiction. It can be stated with confidence that quite attractive prospects open up for such a businesses to strive in the country.

Cryptocurrency and Hash Taxes in Georgia: White Paper

Although the National Bank of Georgia does not consider bitcoin and other cryptocurrencies legal payment instruments, yet it does not control operations with virtual money. The loyalty of the Georgian authorities to crypto is also evidenced by the fact that on June 28, 2019, the Ministry of Finance of Georgia even provided an explanation of the taxation of cryptocurrency market participants.

The main points of the normative document are as follows:

  • personal income from cryptocurrency transactions is exempt from income tax;
  • the sale and exchange of cryptocurrency into national or foreign currency is exempt from VAT;
  • sale of the hash abroad is not subject to VAT;
  • hash export entitles you to input VAT;
  • Hash operations between residents in Georgia and the purchase of a hash by a resident from a non-resident are subject to VAT.

The last paragraph requires mining companies that are registered in Georgia to pay VAT (18%), which leads to added costs and detriments the attractiveness of the jurisdiction. However, all other conditions increase the attractiveness of the sale and crypto exchange. And of course, we should not forget about the Free Industrial Zones, where legal entities, including mining companies, are exempted from paying VAT on export earnings.

List of cryptomats in Georgia

And finally, the list of cryptomats in Georgia as of May 2020 is as follows:

in Tbilisi:

  • Shota Rustaveli Avenue 2/4, «Galleria Tbilisi»;
  • 16th km Davit Aghmashenebeli Alley, «Tbilisi Mall»;
  • str. Shota Rustaveli 42, «Merani Mall»;
  • str. Khizanishvili, 27, «Gldani Mall»;
  • str. Kavtaradze, 1, «City Mall Saburtalo»;
  • str. Khizabavra, 1, «City Mall Gldani»;
  • str. Navtlugi, 8а, «Isani Mall»;
  • str. Omar Khizanishvili 16, «Gldani Plaza»;
  • str. Vazha Pshavela 59, «Don Chicho»;
  • str. Tsabadze. N8, «Kidobani»;
  • str. Burdzgla 72, «Crypto Cafe Georgia»;
  • str. Gamrekeli, 2, «Axis Palace Shopping Center»;
  • Tbilisi International Airport;
  • Avenue Ilia Chavchavadze 37L, «Homemart».

in Kutaisi :

  • str. Tsereteli , 4a, shop « Karvasla Kutaisi».

in Batumi:

  • str. Lech and Maria Kaczynski, 1а,  «Metro City Forum AVM» TC;
  • str. Lech and Maria Kaczynski, 1а, «Metro City Forum» TC.

It should be noted that these numbers are growing steadily. As of May 2020, the total number of crypto machines in Georgia reached 17, although in January there were 16.

If you are looking for the most profitable jurisdiction for working with cryptocurrency, write to us by mail: info@offshore-pro.info. We will show you how best to organize a business, and also will be happy to assist you with the implementation of your plans. 

Can I open a cryptocurrency account in Georgia?

No, Georgian banks do not open personal and corporate accounts in bitcoins or other cryptocurrencies. However, in Georgia it is beneficial to open bank accounts to service transactions related to the exchange, purchase and sale of cryptocurrency.

What are the benefits of registering mining farms in the FIZ of Georgia?

In free industrial zones of Georgia, preferential taxation on export earnings is applied, namely, no taxes are applied on profit, VAT, on property, on dividends. And with mining equipment you do not need to pay import duties. Due to the lack of VAT, the cost of electricity is even cheaper.

Is it possible to freely pay with crypto in Georgia?

No, in Georgia, cryptocurrency is not legal means of settlement. Bitcoins and other cryptocurrencies are not accepted in stores or restaurants, however, cases of transactions with real estate and cars by cryptocurrency are recorded in the country.


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