The three‐month Trap: Why long‐established sole proprietorships and LLCs in Georgia have begun to be denied work permits

Following changes to the labor migration rules, the main focus has been on the possibility of obtaining a work residence permit through a newly registered business without having to provide proof of revenue. However, the new rules also have a downside—one that is far less welcome for foreigners who registered as sole proprietors or incorporated a company earlier but have not yet obtained the right to work or submitted their residence permit applications.

These entrepreneurs suddenly found themselves outside the three-month grace period. Now, to obtain the right to work, they must prove a turnover of at least 50,000 lari.

The first rejections of applications from existing sole proprietors have already begun to come in.

What has changed

On July 9, 2026, the Georgian government adopted Resolution No. 321, which amended the procedure for issuing work permits to migrant workers and self-employed foreigners.

The new rules require that a company or sole proprietor verify its revenue:

• at least 50,000 lari for each foreign national who receives a work permit;
• at least 35,000 lari per foreign national for educational and medical institutions.

For a self-employed foreign national, proof of turnover is requested in the form of a document from the company or sole proprietor whose business activities are related to the application for the right to work.

At the same time, an exception has been introduced: if no more than three months have passed since the registration of the sole proprietorship or the establishment of the company, the turnover certificate need not be provided.

It is precisely this exception that has created a new problem.

Why the rule came as a surprise to long‐time sole proprietors

Prior to the adoption of Resolution No. 321, a three‐month grace period in this form did not exist. As a result, many foreigners registered as sole proprietors in advance:

• they began working and seeking clients;
• they opened bank accounts;
• they applied for small business status;
• they entered into contracts;
• awaited the launch of the new system for obtaining the right to work;
• postponed applying for a residence permit for personal or organizational reasons.

At the time of registering as a sole proprietor, the entrepreneur could not have known that, in the future, the ability to submit documents without confirmed revenue would be limited to the first three months of the business’s existence.

As a result, an individual entrepreneur registered, for example, four, six, or nine months ago is no longer formally considered “new.” Even if the entrepreneur has not yet obtained the right to work and has never used the benefit, the three-month period has already expired for them.

The law does not provide for a separate transition period for such entrepreneurs.

How the three‐month period is calculated

The period is not calculated from the date the new rules take effect, nor from the date operations began, nor from the date the application was filed.

It is calculated from the date of:

• registration of the sole proprietor;
• incorporation or registration of the company.

Consequently, a sole proprietor registered more than three months ago must confirm their revenue regardless of when they actually began operating and whether they were aware of the new requirements.

For example:

• A sole proprietor was registered on March 1, 2026. An application for the right to engage in business activities is submitted in July 2026. More than three months have passed since registration, so proof of revenue of at least 50,000 lari will be required for the application.
• An individual entrepreneur was registered on June 1, 2026. The application is submitted before the expiration of three months from the date of registration. In this case, proof of revenue is not required.

The grace period is specifically three months, not five or six months.

What turnover is required for an existing sole proprietorship or LLC?

For ordinary commercial activities, the minimum requirement is 50,000 lari for each foreign national who is granted the right to work.

For a sole proprietor applying on their own behalf, this effectively means they must demonstrate that their business has a turnover of at least 50,000 lari.

For a company, the amount is calculated based on the number of foreign nationals for whom work permits are being issued:

• one foreign applicant — starting at 50,000 lari;
• two foreign applicants — 100,000 lari or more;
• three foreign applicants — 150,000 lari or more.

For educational and medical organizations, a reduced threshold applies — 35,000 lari per foreign applicant.

If a company or sole proprietor is not registered as a VAT payer, the turnover for the preceding 12 consecutive calendar months is verified. In this case, the business does not necessarily have to have been in operation for a full year: what matters is the verified turnover amount for the available period within those 12 months.

Why are rejections only starting to come in now?

Decree No. 321 was adopted on July 9, 2026, and took effect immediately upon publication.

The standard processing time for an application for the right to work is up to 30 calendar days; the expedited process takes up to 10 business days. Therefore, the first decisions based on the new requirements began to appear some time after the resolution was published.

The following situation is currently unfolding in practice:

1. A foreign national registered as a sole proprietor several months ago.
2. The sole proprietor has not yet generated 50,000 lari in revenue.
3. The three‐month period from the date of registration has already expired.
4. When applying for a work permit, the entrepreneur cannot take advantage of the exemption for new businesses.
5. The absence of a document confirming compliance with the established criteria becomes grounds for denial.

The new version of the rules explicitly provides for the possibility of denial if the applicant has not submitted documents confirming compliance with the criteria for entrepreneurial or employment activities.

What can an established sole proprietor do?

The first and most obvious option is to generate the required revenue.

If the sole proprietor continues to operate, accepts payments, and reports income on their tax returns, once they reach 50,000 lari in revenue, they will be able to obtain the necessary certificate and resubmit their application.

However, this option is not suitable for everyone. An entrepreneur may not have time to wait until the required turnover is reached, especially if their period of legal stay in Georgia is limited or they need a residence permit in the near future.

Is it possible to close an individual entrepreneur business and re‐register it?

At this stage, a different approach is commonly used in practice:

1. Close the existing individual entrepreneur business.
2. Fulfill all tax obligations and file the necessary tax returns.
3. Re-register as an individual entrepreneur.
4. Apply for the right to engage in employment within three months of the new registration.
5. After obtaining the right to work, submit documents for a work residence permit.

Formally, after re‐registration, a new sole proprietorship is created with a new registration date, which once again meets the criterion of “registered no more than three months ago.”

However, this option should not be viewed as a scheme unconditionally guaranteed by law. The resolution does not contain a separate provision that would explicitly permit closing and reopening an individual entrepreneur entity to restore the grace period. Decisions on each application are made by the authorized agency, and the practice of applying the new rules is still taking shape.

In addition, before closing an individual entrepreneur business, you must verify the following:

• that there are no outstanding tax liabilities;
• that all required tax returns have been filed;
• small business status;
• VAT registration;
• active contracts;
• bank accounts and payment services;
• whether there are any employees;
• licenses and special permits;
• outstanding debts to counterparties;
• the cash register and other registered assets.

Closing a sole proprietorship does not terminate any existing tax or contractual obligations of the individual. Therefore, you must first assess the consequences of closing the business and only then decide whether to re-register.

What should an established LLC do?

The situation is more complicated for a company.

A sole proprietorship can be dissolved and then re-registered relatively quickly. An LLC is a separate legal entity, so there is no simple way to “reset” the company’s age.

Possible options:

• Wait until the existing company reaches the required turnover;
• Register a new LLC and submit documents through it;
• Transfer part of the business, contracts, and operations to the new legal entity;
• Use another suitable company that meets the requirements;
• Consider another basis for obtaining a residence permit.

Establishing a new LLC does not automatically transfer the following to it:

• bank accounts;
• contracts;
• clients;
• tax history;
• licenses;
• employees;
• assets and liabilities of the old company.

Furthermore, if the business continues to operate through the old company, and the new LLC is created solely for the purpose of filing documents, government authorities may raise additional questions regarding the legitimacy of the new entity’s operations.

Therefore, the solution for an LLC must be planned on a case‐by‐case basis.

What happens after obtaining the right to work

After obtaining the right to work, a foreign national already in Georgia must apply for a work residence permit within the specified time frame.

For new businesses, there is a separate exemption from the revenue requirement when applying for a residence permit, provided that all of the following conditions are met simultaneously:

• no more than three months have passed since the business was registered;
• no more than three foreign nationals are employed by the company;
• this is the first time a work residence permit is being issued without proof of revenue.

In this case, the first work residence permit is issued for six months.

It is important to note that the three‐month period continues to run while the application for the right to work is being reviewed. Therefore, you should plan the business registration and subsequent submission of documents in advance, without delaying the process until the last minute.

What to do if your application has already been denied

A denial in and of itself does not mean that it is no longer possible to obtain the right to engage in employment.

Depending on the reason for the denial, you can:

• confirm the required turnover and resubmit the documents;
• correct any deficiencies in the documents;
• close and re‐register your sole proprietorship, after assessing the tax implications;
• register a new company;
• appeal the decision if you believe the requirements were applied incorrectly;
• choose a different basis for legalizing employment in Georgia.

However, as a rule, you cannot reapply for the right to work after a rejection until at least one month has passed since the decision was issued.

Therefore, tentatively submitting an incomplete set of documents may result not only in the loss of the fee you paid but also in additional delays.

Key conclusion

The new rules have indeed made it easier to obtain a work residence permit through a newly registered business. At the same time, however, they have created a serious problem for foreigners who established a sole proprietorship or LLC earlier and did not manage to submit their documents within three months of registration.

Now, such entrepreneurs must either confirm a turnover of at least 50,000 lari or seek an alternative application method.

It is especially important not to register a business “in advance” if you plan to use it to obtain the right to work and a work residence permit. Once the business is registered, the three-month period begins, and it is impossible to restart the clock without closing the sole proprietorship or establishing a new legal entity.

Espero helps you:

• register a sole proprietorship or LLC in Georgia;
• determine your eligibility for a work permit;
• prepare the necessary documents for submission;
• assess your revenue and compliance with established criteria;
• obtain a work residence permit;
• analyze the reasons for a previous denial;
• assess the advisability of closing and re-registering a sole proprietorship.

If your sole proprietorship or LLC was registered more than three months ago, we recommend reviewing your situation before submitting an application. This will help you avoid a denial, the loss of the state fee, and the mandatory waiting period before reapplying.

This material was prepared based on the legislation and practices in effect as of July 30, 2026. The practice of applying the new rules is still evolving, so it is recommended that you verify the current requirements before submitting your documents.