Permanent Establishment Risk: What Foreign Founders Using a Georgian Company Must Know in 2026

Many entrepreneurs open a company in Georgia for its simplicity and low taxes, but overlook one critical topic: permanent establishment risk.

In 2026, this is one of the most important concepts foreign founders need to understand before operating internationally.

What permanent establishment actually means

Permanent establishment refers to a situation where a company is considered to have a taxable presence in another country, even if it is registered elsewhere.

This can happen when business activities are effectively managed or carried out from outside Georgia.

Why this matters for foreign founders

If tax authorities in another country determine that a Georgian company is effectively operated from their jurisdiction, they may claim taxing rights over part or all of the income.

This is one of the most common reasons entrepreneurs face unexpected tax exposure after setting up abroad.

Common situations that create risk

Permanent establishment risk can arise when founders work full-time from another country, sign contracts locally, hire local employees, or manage the company from outside Georgia without proper structure.

The risk is not about registration, but about how the business actually operates.

Why Georgia still works in 2026

Georgia offers a clear legal framework, but international founders must align their operational reality with their company structure.

When done correctly, many founders operate successfully without creating unnecessary tax exposure elsewhere.

How StartGE helps reduce risk

At StartGE, we help founders understand permanent establishment risks before they appear. We focus on practical setup decisions that support long-term compliance, not just registration.

In 2026, smart international business is not about where your company is registered — it’s about how and where it is actually run.