Individual entrepreneur

Under Georgian law, an individual entrepreneur is not considered an enterprise in the formal legal sense. However, since social entrepreneurship is not regulated by any specific law in Georgia, some individual entrepreneurs identify themselves as social enterprises. According to the legislation, an individual entrepreneur is entitled to carry out entrepreneurial activities, but is not recognized as a legal person. An individual entrepreneur fulfils his or her rights and obligations in business relations as a natural person.

Entrepreneurial activity carried out by a natural person is defined as a legitimate, repeated, and independently organized activity aimed at generating profit. In the context of social entrepreneurship, this activity may be more broadly understood as economic activity that simultaneously produces social benefits for society.

The legal basis for this organizational form is provided by the Law of Georgia on Entrepreneurs (28/10/1994, N577), the Tax Code of Georgia (26/06/1997, N786), and the Instruction on Registration of Entrepreneurs and Non-Entrepreneurial (Non-Commercial) Legal Entities (Order N241 of the Minister of Justice of Georgia, December 31, 2009).

Financial Support

Several financial support mechanisms are available to individual entrepreneurs. Within the framework of the state program “Produce in Georgia”, a grant competition supports micro and small businesses. Additional support is provided through grants issued by the Georgian Innovation and Technology Agency (LEPL for Granting Innovative Activities). Banking sector programs include the Bank of Georgia’s “Women Startup” initiative, TBC Bank’s business loan for female entrepreneurs, and TBC Bank’s Startup Loan for Enterprise.

Tax Relief

Special preferential tax regimes apply to individual entrepreneurs who hold micro or small business status. A person with micro-business status is fully exempt from income tax, provided that their total gross income during the calendar year does not exceed 30,000 GEL. A person granted small business status — where total income from economic activity does not exceed 100,000 GEL during a calendar year — benefits from a preferential tax regime under which taxable income is taxed at a rate of 5%. This rate is further reduced to 3% if the individual can provide documents confirming that expenses related to the generation of joint income amount to at least 60% of that joint income, excluding salary costs accrued for employees.

No specific discounts on social security contributions or advantages in public procurement are available beyond the general statutory regulations.

Educational and Informational Support

Technical support in the form of training, consulting, and acceleration programs is provided to individual entrepreneurs engaged in social entrepreneurship mainly by the following organizations: the Civil Society Resource Development and Grant-making organization (CSRDG), the European Foundation, the Civil Society Institute (CSI), the Social Enterprise Alliance (SEA), Impact Hub, Arbeiter-Samariter-Bund, the Caucasus Environmental Non-Governmental Network (CENN), and the Young Entrepreneurs School.