Georgia has introduced new tax incentives for innovative startups, defining their legal status through recent amendments to the Tax Code. Companies recognized as innovative startups will now be exempt from income tax on salaries of up to GEL 10,000 per month per employee for a period of three years. The reform, detailed in a government decree issued on September 30, aims to stimulate innovation and strengthen the country’s startup ecosystem.
According to a legislative review by BDO, the new framework establishes three categories eligible for the status: innovative startups, innovative small and medium-sized enterprises (SMEs), and companies providing research and development (R&D) services. The decree also outlines the conditions, duration, and procedures for granting, extending, and canceling this status.
The regulation is based on Article 15³ of the Law “On Innovations”, which provides tax relief designed to attract skilled professionals and encourage technological advancement. Experts note that by lowering the tax burden on high-value employees, the policy will make Georgia more competitive as a regional hub for innovation and digital entrepreneurship.
In addition, the reform introduces direct financial support mechanisms for innovative SMEs. Businesses that reinvest profits in research and development will be eligible to receive state grants covering 20% of their R&D expenses, up to 100,000 GEL. The new framework, effective as of September 24, 2025, integrates tax and investment incentives to promote sustainable growth and accelerate Georgia’s technological and economic transformation.
