In 2025, only 18 new IT companies were registered in Georgia, a sharp slowdown that highlights how previous sector growth was largely driven by migration, according to a study by the Institute for Development of Freedom of Information (IDFI).
The ICT sector has played a key role in Georgia’s economic growth, contributing nearly a third of the 9.2% GDP growth in Q1 2025. However, IDFI notes that this boost was primarily due to the influx of foreign IT specialists after Russia’s invasion of Ukraine in 2022, not organic, local development.
From 2022 to 2024, the number of ICT companies doubled, with 99% of new foreign entities registered as small businesses or individual entrepreneurs. However, many Russian and Belarusian specialists have since relocated out of Georgia, leading to a drop in employment among large IT firms.
In response, Georgia introduced simplified residency rules for foreign IT workers, allowing them to obtain 3-year permits, with automatic termination if they spend over 183 days abroad in a 12-month period. Lawmakers hope this will boost the number of foreign IT workers from 6,284 to 24,000 in the next five years.
The report also highlights that 56% of Georgia’s IT companies are Russian-owned. While tax and residency benefits may attract investment, IDFI warns that this model offers limited local economic benefit. The sector’s low commercialization, minimal tax impact, and high foreign workforce share reduce its effect on local well-being.
"Georgia's tech sector is growing in numbers, but the wealth it creates often does not stay in the country," IDFI concludes. "Over-reliance on migration-driven growth may fragment real economic impact and raise national security concerns."
