Why E-commerce Sellers Are Choosing Georgia's 1% Tax

The Tax Advantage That Is Reshaping Where Online Sellers Base Their Businesses

If you sell products online — whether through Amazon FBA, Shopify, Etsy, eBay, or any other e-commerce platform — your tax bill is almost certainly one of your largest business expenses. In Germany, a successful Amazon seller earning €100,000 in profit can expect to hand over €35,000 to €42,000 in income tax and social contributions. In France, the combined burden can exceed €40,000. In the Netherlands, Belgium, Italy, and Spain, the numbers are similarly punishing.

Now consider this: that same €100,000 in revenue, routed through a properly structured Individual Entrepreneur (IE) registration in Georgia with Small Business Status (SBS), generates a total tax obligation of approximately €1,000. One thousand euros. Not a typo. Not a loophole. A fully legal, government-backed tax regime that Georgia has specifically designed to attract international entrepreneurs.

This is why a growing wave of e-commerce sellers across Europe and beyond are quietly restructuring their businesses through Georgia — and why the ones who move first gain a compounding advantage over competitors still paying 30% to 50% in their home jurisdictions.

The Numbers That Make E-commerce Sellers Take Notice

Let us put concrete numbers to what Georgia's 1% tax rate means for online sellers at different revenue levels:

Seller earning €50,000/year:

• Tax in Germany: approximately €17,000 – €21,000
• Tax in France: approximately €18,000 – €22,000
• Tax in Georgia (IE + SBS): approximately €500
• Annual savings: €16,500 – €21,500

Seller earning €100,000/year:

• Tax in Germany: approximately €35,000 – €42,000
• Tax in France: approximately €38,000 – €45,000
• Tax in Georgia (IE + SBS): approximately €1,000
• Annual savings: €34,000 – €44,000

Seller earning €150,000/year:

• Tax in Germany: approximately €55,000 – €65,000
• Tax in France: approximately €58,000 – €68,000
• Tax in Georgia (IE + SBS): approximately €1,500
• Annual savings: €53,500 – €66,500

These are not marginal differences. At every revenue level, the Georgian IE structure reduces the tax burden by 95% or more compared to Western European alternatives. Over a five-year period, a seller earning €100,000 annually saves between €170,000 and €220,000 — enough to fund significant inventory expansion, marketing investment, or simply a dramatically better lifestyle.

Why Georgia Works Specifically for E-commerce

Georgia's IE + SBS structure is not just generically attractive for tax purposes — it is specifically well-suited to the e-commerce business model for several reasons.

Revenue-based taxation simplifies accounting. Under SBS, you pay 1% of gross revenue. There is no need to calculate net profit, track deductible expenses, or maintain the kind of detailed accounting records that Western tax systems require. For e-commerce sellers juggling inventory costs, platform fees, advertising spend, and shipping charges, this simplification is enormous. You collect revenue, you pay 1%, and you are done.

Platform compatibility is seamless. Amazon, Shopify, Etsy, eBay, and other major e-commerce platforms have no restrictions on sellers operating through Georgian business entities. Your Georgian IE can receive payouts from these platforms just as easily as any European sole proprietorship. The platforms care about your bank account details and tax identification — both of which your Georgian IE provides.

Multi-currency banking supports global selling. Georgian banks offer multi-currency business accounts that can hold and transact in USD, EUR, GBP, and other major currencies. This is essential for e-commerce sellers who receive payments in multiple currencies and need to manage exchange rate exposure efficiently.

No physical presence required. You do not need to live in Georgia, have a warehouse in Georgia, or even visit Georgia to maintain your IE registration. Your products can ship from anywhere — Amazon's FBA warehouses across Europe, third-party logistics providers, dropshipping suppliers — while your business entity operates from Georgia. The registration can be completed entirely remotely through a power of attorney.

Amazon FBA Sellers: A Perfect Fit

Amazon FBA sellers represent one of the largest groups of entrepreneurs taking advantage of Georgia's tax structure, and for good reason. The FBA business model — where Amazon handles storage, packing, and shipping — is inherently location-independent. The seller's role is primarily strategic: product research, supplier relationships, listing optimization, and advertising management. None of these activities require a specific physical location.

This location independence means that the seller's tax obligations are determined not by where the products are stored or shipped from, but by where the business is registered and where the seller is tax resident. By registering a Georgian IE with SBS, FBA sellers can legally channel their Amazon revenue through a jurisdiction that taxes it at 1% instead of the 30% to 50% they would pay in most European countries.

The practical setup works like this: Amazon pays out to your Georgian business bank account. Your Georgian IE issues invoices or records the revenue. You pay 1% tax on that revenue to the Georgian tax authority. The remaining 99% is yours to reinvest in inventory, save, or spend as you see fit.

Shopify and Direct-to-Consumer Sellers

Shopify store owners and other direct-to-consumer (DTC) sellers benefit from the same advantages, with some additional considerations. Unlike Amazon FBA, where the platform handles much of the operational complexity, DTC sellers often manage their own payment processing, customer service, and fulfillment logistics.

A Georgian IE works perfectly for this model. Payment processors like Stripe and PayPal can pay out to Georgian bank accounts. Your Shopify store can operate under your Georgian business identity. Customer-facing operations remain unchanged — your customers do not know or care where your business entity is registered.

The key advantage for DTC sellers is the same as for FBA sellers: the dramatic reduction in tax burden frees up capital that can be reinvested into the business. In the highly competitive e-commerce landscape, having an extra 30% to 40% of your revenue available for inventory, marketing, and growth creates a significant competitive advantage over sellers who are sending that money to their home country's tax authority.

Etsy, eBay, and Marketplace Sellers

Sellers on Etsy, eBay, Walmart Marketplace, and other platforms face the same tax dynamics. The platform pays out revenue, the seller's jurisdiction determines the tax rate, and Georgia's 1% rate represents a dramatic improvement over virtually any Western alternative.

For Etsy sellers in particular — many of whom are creative professionals selling handmade goods, digital downloads, or print-on-demand products — the Georgian IE offers an especially compelling proposition. These sellers often operate on thinner margins than FBA sellers, which means the tax rate has an outsized impact on their actual take-home income. Reducing the tax burden from 30% or more to 1% can be the difference between a side hustle and a sustainable full-time business.

VAT Considerations for E-commerce Sellers

One important area that e-commerce sellers need to understand is VAT (Value Added Tax). Georgia has a VAT registration threshold of 100,000 GEL (approximately €34,000) in annual turnover. If your revenue exceeds this threshold, you are required to register for VAT in Georgia.

However, the practical VAT implications for e-commerce sellers depend heavily on the specifics of your business model. Sellers who export goods or services outside of Georgia generally have minimal Georgian VAT obligations. The interaction between Georgian VAT rules, EU VAT requirements (for sellers shipping to EU customers), and platform-specific VAT collection mechanisms (such as Amazon's VAT Services) creates a complex landscape that requires careful planning.

This is one of the areas where attempting to navigate the system without professional guidance is particularly risky. VAT rules are intricate, vary by country and platform, and the penalties for non-compliance can be substantial. Getting expert advice on your specific VAT situation is not optional — it is a critical part of setting up your Georgian business structure correctly.

Payment Processing and Getting Your Money

A common concern for e-commerce sellers considering Georgia is whether they will be able to receive their platform payouts smoothly. The short answer is yes — but the details matter.

Georgian business bank accounts at Bank of Georgia and TBC Bank support incoming SWIFT transfers in multiple currencies, including USD and EUR. Amazon, Shopify, and other major platforms can pay out to these accounts. Some sellers also use payment service providers like Payoneer or Wise as an intermediary layer, though this adds complexity and is not always necessary.

The key to smooth payment processing is having your bank account properly set up from the start — with the right account type, correct currency denominations, and all compliance documentation in order. A poorly prepared bank account application can result in delays, additional compliance requests, or in some cases, account restrictions that affect your ability to receive payouts.

What You Should Not Try to Do Yourself

The tax savings from a Georgian IE are so significant that it is tempting to try to set everything up yourself to save on professional fees. This is almost always a false economy for e-commerce sellers, for several reasons:

Activity code selection is critical and non-obvious. E-commerce encompasses many different activities — product sourcing, reselling, dropshipping, digital product sales, affiliate marketing — and each may correspond to different NACE codes with different SBS eligibility implications. Selecting the wrong codes can disqualify you from the 1% rate entirely.

Platform-specific considerations require expertise. The way Amazon FBA revenue is structured is different from Shopify revenue, which is different from Etsy revenue. Each has implications for how your Georgian IE should be set up and how your tax reporting should be handled.

Banking setup requires local knowledge. Georgian banks have specific requirements for e-commerce businesses, and presenting your business incorrectly during the account opening process can result in rejection. A rejection creates a negative history that makes subsequent applications more difficult.

VAT planning requires specialist knowledge. The interaction between Georgian VAT, EU VAT, and platform VAT collection is complex and varies by business model. Getting this wrong can result in double taxation, penalties, or compliance issues across multiple jurisdictions.

How StartGE Sets Up E-commerce Sellers for Success

StartGE has extensive experience helping e-commerce sellers — Amazon FBA operators, Shopify store owners, Etsy sellers, and more — establish their Georgian IE structure correctly. Their team understands the specific requirements and pitfalls of each e-commerce model and ensures that every element of the setup is optimized for your specific situation.

For €699, StartGE handles:

• Complete IE registration with e-commerce-optimized NACE activity codes
• Small Business Status (SBS) application to secure the 1% tax rate
• Bank account opening assistance with multi-currency account setup
• Guidance on platform payout configuration
• VAT threshold planning and compliance guidance
• Remote registration via power of attorney — no travel to Georgia required

The €699 fee pays for itself within the first few weeks of operation. After that, every month of operation at 1% instead of 30%+ puts thousands of euros back into your business — or your pocket.

Your competitors are already paying 30% tax on their e-commerce revenue. You do not have to.

Visit startge.com to set up your e-commerce IE today, or contact StartGE directly:

• Phone/WhatsApp: +995 599 98 87 94
• Website: startge.com

1% tax. More profit. More growth. Start now.