Moving from France to Georgia swaps a top combined French burden of roughly 49% on income, 30% on portfolio gains and dividends (PFU plus CEHR), 1.5% IFI on French real estate above €1.3M, and up to 60% on inheritance for Georgia’s 1% of turnover Small Business Status (up to ~USD 180,000 annual revenue) plus 0% on most foreign-source personal income — at total residency cost under USD 1,000 for the IE setup. Unlike the France-to-Paraguay corridor, there is a bilateral double-tax convention in force between France and Georgia (signed 7 March 2007, entered into force 1 June 2011), which gives you an article 4 OECD tie-breaker if the DGFiP later argues you never validly ceased residency. Both countries have also ratified the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides the bilateral assistance-in-recovery framework that France’s article 167 bis CGI exit-tax deferral doctrine looks for — meaning that, unlike the Paraguay corridor, ordinary 167 bis deferral against a sûreté is actually available to Georgia-bound exiters who hold qualifying shareholdings. Georgia is not on France’s États et territoires non coopératifs (ETNC) list. This guide walks through the article 4 B residency tests, the 167 bis mechanics in their Georgia-corridor configuration, the IE / Small Business Status / HNWI side, and the 4–9 month sequence that survives DGFiP audit.
The Tax Delta at a Glance
| France (current) | Georgia (after move) | |
|---|---|---|
| Personal income tax | 0% to 45% progressive (barème IR) | 1% of turnover under Small Business Status (up to 500,000 GEL ≈ USD 180,000); 0% on most foreign-source income for individuals; 20% flat on Georgian-source non-IE income |
| Contribution exceptionnelle sur les hauts revenus (CEHR) | 3–4% above €250K / €500K of revenu fiscal de référence | 0% |
| Capital gains / dividends | 30% Prélèvement Forfaitaire Unique (12.8% IR + 17.2% CSG/CRDS) | 0% on foreign-source CGT and dividends for resident individuals; 0% on assets held >2 years even if Georgian-source; 5% on Georgian-source dividends |
| Wealth tax (real estate — IFI) | 0.5%–1.5% above €1.3M of worldwide property | 0% (IFI continues annually on retained French real estate) |
| Inheritance / gift tax | 5%–60% (45% top direct line, 60% non-relatives) | 0% between close relatives; 0%–5% otherwise |
| Worldwide vs territorial | Worldwide for residents under article 4 A CGI | Territorial-leaning for individuals; foreign-source personal income generally outside Georgian net |
| Days/year required | None statutory; foyer + faisceau d’indices | 183+ days/year (standard) or HNWI track waives the day-count entirely |
| Effective rate (typical entrepreneur) | ~49% top marginal IR + CEHR; 30% on dividends/CGT | ~1% on the IE turnover slice; ~0% on foreign passive flows |
The Georgia column applies in full only after both legs are in place: cessation of French residence under article 4 B CGI and establishment of Georgian residency through 183 days in-country (or HNWI status) and activation of Small Business Status with monthly turnover declarations to the Revenue Service. Until cessation is documented, the Direction Générale des Finances Publiques (DGFiP) continues to tax you on worldwide income.
Step-by-Step Move
Step 1: Confirm you can legally cease French tax residency under article 4 B CGI
French tax residency is decided by article 4 B of the Code général des impôts. Meeting any one of four alternative tests makes you French resident on worldwide income:
- Foyer — your habitual place of dwelling and that of your family (spouse and minor children). The Conseil d’État has consistently held the foyer to follow the family: a spouse and minor children continuing in Paris keep France your foyer even with zero personal days in France.
- Lieu de séjour principal — the country where you spend the most days, applied when foyer is inconclusive. There is no statutory 183-day threshold; 4–6 months can be enough if no other country has more.
- Activité professionnelle principale — where your principal professional activity is carried out, judged by time and revenue.
- Centre des intérêts économiques — where your principal investments, business management, and source of income sit.
There is no quantified day-count formula equivalent to the UK Statutory Residence Test. The DGFiP applies a faisceau d’indices. The most common point of failure on the France-to-Georgia corridor is the foyer rule: a founder physically registers as a Georgian Individual Entrepreneur, opens a TBC Bank account, then continues to spend half the year in a Paris apartment with the family. France wins by domestic law, and the article 4 OECD tie-breaker (see Step 4) lands the same way because the foyer d’habitation permanent and centre des intérêts vitaux both still sit in France.
Mechanical sequence to establish a clean break: terminate the French principal lease (or sell the residence, or convert to an arm’s-length 12+ month tenancy to a non-family party), enrol the children in a Tbilisi or Batumi international school (the British International School of Tbilisi and the European School are the usual choices for French families), file the avis de départ with the Centre des Finances Publiques on form 2042 marked “départ à l’étranger” with a Georgian address, close the Plan d’Épargne en Actions (closed de jure on departure under article L221-32 CMF), and physically relocate. Without a clean foyer break, every 167 bis manoeuvre below is moot.
Step 2: Plan around article 167 bis CGI in its Georgia-corridor configuration
France’s exit tax under article 167 bis CGI is the dominant single cost for founders and investors leaving France. The trigger conditions are unchanged regardless of destination:
- French tax resident for at least 6 of the 10 years preceding departure, and
- On the date of departure, holdings of either shareholdings worth more than €800,000 in aggregate, or a 50%+ stake in the droits aux bénéfices sociaux of any single company.
If either threshold is met, the day French residency ceases the unrealised gains on those qualifying shareholdings are deemed realised. The deemed gain is taxed at the PFU rate of 30% (12.8% IR + 17.2% social charges — CSG, CRDS, prélèvement de solidarité), uplifted by CEHR 3–4% if total revenu fiscal de référence exceeds €250,000 (single) / €500,000 (couple). Top-bracket exiters typically face ~32–34% on the deemed gain.
The deferral architecture is where Georgia differs sharply from a Paraguay or Panama move:
- EU/EEA moves get automatic interest-free deferral with no security required.
- Non-EU/EEA moves to a state with which France has both a tax-information-exchange instrument and an administrative-recovery assistance treaty can defer subject to posting a sûreté (typically a bank guarantee or pledge of the qualifying shares).
- Georgia falls into the second bucket. The France-Georgia DTA of 7 March 2007 includes an exchange-of-information article. Both France and Georgia have ratified the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters (in force for Georgia from 2011, France a founding signatory), which contains an assistance-in-recovery chapter that the DGFiP’s published doctrine (BOI-RPPM-PVBMI-50) accepts as satisfying the recovery-cooperation condition. Ordinary deferral against a sûreté is therefore available on a Georgia move — a structural advantage over Paraguay (no DTA, sparse practice on the multilateral convention) and Panama (ETNC-listed).
Practical mitigation strategies that work specifically on the France-to-Georgia corridor:
- Stay under the €800,000 / 50% thresholds. A founder under both can leave France with no exit-tax exposure on portfolio shareholdings at all. Pre-departure dilution, gifts to family ahead of departure (subject to the 6-year donation lookback under article 784 CGI), or partial sales can drop you under the thresholds.
- Negotiate the sûreté at the front end. A pledge of the deferred shares (nantissement de titres) is generally accepted; a bank guarantee is the alternative but ties up balance sheet. Filing 2074-ETD with a clean valuation report and a sûreté offer at the time of the departure return is the procedural norm.
- Hold the deferred position 15 years. Article 167 bis VII bis CGI extinguishes the deferred exit-tax liability if the qualifying shares are not actually disposed of within 15 years of departure. With deferral granted on day one of the Georgia move, the clock starts running immediately — a structural advantage Paraguay and Panama corridors do not offer.
- Crystallise gains pre-departure under PFU. If the deemed disposal will trigger anyway and deferral is not desired (e.g. for a near-term liquidity event), accelerating actual sales while still French-resident converts the dry charge into cash that funds the move and avoids the sûreté administrative overhead.
Step 3: Establish Georgian tax residency
Georgia offers two distinct tax-residency tracks, which materially changes the playbook depending on whether you actually want to live in Tbilisi.
- Standard tax residency (183-day rule). Spend 183+ days in Georgia in any 12-month period ending in the relevant tax year. No minimum investment, no language requirement. Combined with Individual Entrepreneur registration at the Public Service Hall and Small Business Status from the Revenue Service, this is the workhorse pathway for solo founders whose annual turnover sits comfortably below 500,000 GEL (~USD 180,000). Setup is typically operational within 1–10 business days.
- HNWI residency (no day-count). A statutory route to Georgian tax-resident status without 183 days in-country, available to individuals who own worldwide assets above GEL 3,000,000 (~USD 1.1M) or who earned more than GEL 200,000/year for each of the last three years, plus a confirmation of property or income inside Georgia. The Revenue Service issues a tax-residency certificate that is recognised under the France-Georgia DTA. This is the preferred route for French founders who want a treaty-supported tax-residency certificate without committing to half a year in Tbilisi — but be aware that the article 4 B foyer test cuts the other way: the HNWI track gives you a Georgian certificate, but does not by itself defeat a French foyer claim. The article 4 OECD tie-breaker still requires a real centre of vital interests in Georgia.
The full Georgia-side mechanics — IE registration, Small Business Status election, the Free Industrial Zone overlay, banking with TBC and Bank of Georgia, the residence-permit options — are in Tax-Free Residency in Georgia.
A practical note on the IE / Small Business Status election: it is not a residence permit. French nationals enter Georgia visa-free for 365 days at a time and most operate the IE under that visa-free regime indefinitely. A formal residence permit (work, investment USD 300,000+, or family) is only required if you want a permit-track path to citizenship after five years. For the tax-only objective, IE + Small Business Status + 183 days (or HNWI) is sufficient.
Step 4: Document the break — and use the France-Georgia DTA tie-breaker
Unlike the France-to-Paraguay corridor, France and Georgia have a bilateral double-tax convention in force (Convention entre le Gouvernement de la République française et le Gouvernement de la Géorgie en vue d’éviter les doubles impositions, signed 7 March 2007, in force since 1 June 2011). The convention contains a standard OECD-model article 4 tie-breaker for individuals: permanent home → centre of vital interests → habitual abode → nationality → competent-authority mutual agreement.
This matters because, if the DGFiP opens a proposition de rectification arguing you remained French resident under article 4 B, you have a treaty fallback that Paraguay-corridor movers do not. The treaty tie-breaker is decided independently of French domestic law, and a clean Georgian foyer file (registered Tbilisi lease, children at a Tbilisi school, Georgian RUC and bank statements, daily life records) routinely defeats a French foyer claim in the centre des intérêts vitaux leg.
Build the documentary file contemporaneously: avis de départ with the Tbilisi address, lease termination or sale contract for the French residence, EDF / Engie / Orange contract closures, résiliation of carte Vitale (Sécurité sociale) with attestation, school deregistrations, French bank accounts moved to non-resident profile, brokerage account closed off the PEA. On the Georgian side: passport stamps, registered tenancy or property title, Georgian utility bills, school enrolments, TBC / Bank of Georgia account statements with regular Georgian-domestic spend, IE registration certificate, Small Business Status election letter, RUC certificate, annual Georgian tax-residency certificate from the Revenue Service.
Step 5: First-year compliance — what the DTA does and doesn’t reduce
In the year of departure you file a final déclaration des revenus (formulaire 2042 with annex 2042-NR) marked départ à l’étranger: worldwide income for the period of French residency (1 January to departure date), French-source income only thereafter. Article 167 bis is filed on formulaire 2074-ETD (and 2074-ETSL for annual deferral monitoring), with the exit-tax payment evidenced or the sûreté arrangement documented.
After departure, four trailing nexus issues continue:
- IFI on French real estate. If you retain French real property and your French real-estate net worth exceeds €1.3M, the Impôt sur la Fortune Immobilière continues annually post-departure on French-situated real estate. A Paris pied-à-terre or a Provence house remains within scope regardless of new residency. The DTA does not displace IFI.
- Treaty-reduced withholding on French-source dividends, interest and royalties. Under the France-Georgia DTA, French-source dividends paid to a Georgian resident are subject to a reduced 10% withholding (5% if the Georgian recipient is a company holding 10%+ of the French payer; verify article 10 against the published treaty text for your specific facts). Interest is generally taxable only in the residence state; royalties at a treaty rate. Without the treaty, the article 119 bis CGI 12.8% domestic rate on dividends would apply. Because Georgia is not on the ETNC list, the 75% punitive withholding under article 187 CGI does not apply.
- Article 244 bis B on substantial holdings. Capital gains realised by a non-resident on a substantial holding (25%+) in a French company are subject to French income tax at 12.8%. The DTA generally allocates taxing rights on shareholdings to the residence state, so a France-source gain on a non-real-estate-rich substantial holding can be exempt under treaty in most cases — confirm against the treaty text for your specific holding profile.
- CSG/CRDS / prélèvement de solidarité. Unlike EEA-resident former French nationals, who can claim the reduced 7.5% prélèvement de solidarité on French rental income, Georgia-resident former French nationals pay the full 17.2% social charges on residual French-source flows, because the EU/EEA carve-out under regulation 883/2004 does not extend to Georgia.
Georgian compliance on the IE / Small Business Status side is light: a monthly turnover declaration filed via the Revenue Service portal, with 1% paid on turnover received that month. There is no annual personal income tax return for foreign-source income — under Georgia’s territorial-leaning treatment, foreign income is simply outside the Georgian individual tax net.
Cost & Timeline
| Phase | Cost (USD) | Time |
|---|---|---|
| French tax planning + article 167 bis modelling | $8,000–$25,000 | 2–6 months |
| Article 167 bis exit-tax assessment (founders only) | Up to ~32–34% × deemed gain (deferrable against sûreté) | Filed with departure return |
| Final déclaration des revenus + 2074-ETD | $1,500–$5,000 | Filed by mid-May of following year |
| IE registration + Small Business Status (Tbilisi counsel) | $300–$800 | 1–10 business days |
| HNWI residency package (alternative track) | $2,000–$4,000 | 30–60 days |
| Move + setup (Tbilisi lease, banking, RUC) | $2,000–$6,000 | 1–2 months |
| IFI monitoring (if French real estate retained) | $2,000–$6,000 / year | Ongoing |
| Total year-1 effective cost (no 167 bis in scope) | USD 5,000–15,000 | 4–9 months |
The dominant cost line for taxpayers in scope of article 167 bis is the deemed-disposal charge itself. For a founder with €5M of accrued gain on shareholdings worth €8M at departure, the deemed-disposal bill is roughly €5M × ~32% ≈ €1.6M — but on the Georgia corridor this can usually be deferred against a nantissement of the shares, with the 15-year extinguishment clock starting on day one of departure. For movers below the 167 bis thresholds, Georgia is among the cheapest fully tax-efficient destinations a French resident can exit to.
Treaty Considerations
The France-Georgia DTA signed 7 March 2007 entered into force 1 June 2011 and applies to French income tax, IS, IFI (substituted for ISF), and to Georgian personal income tax and corporate profit tax. The treaty contains a standard OECD-model article 4 individual tie-breaker (permanent home → centre of vital interests → habitual abode → nationality → competent authority MAP), article 10 reduced withholding on dividends (typically 5% / 10% depending on shareholder participation), article 11 / 12 treatment of interest and royalties, an article 13 capital-gains article that generally allocates non-real-estate gains to the residence state, and article 26 exchange of information.
In addition, both countries are parties to the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides assistance in recovery between participating states. The DGFiP’s article 167 bis deferral doctrine looks for a bilateral or multilateral framework for recovery cooperation; the multilateral convention satisfies this, which is why ordinary deferral is available on the Georgia corridor against a sûreté.
The combination — bilateral DTA with article 4 tie-breaker + multilateral assistance in recovery + non-ETNC status — places Georgia in a structurally cleaner position for French exiters than Paraguay (no DTA), Panama (ETNC), Andorra (DTA but historically tighter mutual practice), or Monaco (special protocol that does not behave as an ordinary DTA for French nationals).
Common Mistakes
- Leaving the family at the lycée international while you “live” in Tbilisi. Article 4 B foyer treats the family’s principal home as yours — minor children at school in Paris keep you French resident even with zero personal presence in France, and the article 4 DTA tie-breaker lands the same way because centre des intérêts vitaux still sits in Paris.
- Treating HNWI status as a residency shield without substance. The Georgian HNWI tax-residency certificate is real and treaty-recognised, but it does not by itself defeat a French foyer claim. The DGFiP audits HNWI cases on substance — without a real Tbilisi lease, real time in-country, and a real centre of life, the certificate alone will not hold.
- Failing to elect Small Business Status promptly. The 1% rate is not automatic — it requires a separate Revenue Service application after IE registration. Income earned before the election is taxed at standard 20% PIT.
- Operating Small Business Status on excluded activities. Financial services, gambling, currency exchange and certain regulated consulting fall outside the SBS regime. Get a written opinion from a Tbilisi tax advisor before assuming an unusual activity qualifies.
- Failing to close the PEA / PEA-PME affirmatively. Both close de jure on the day French residency ceases, with the 5-year tax preference lost retroactively if held under five years. Close them affirmatively pre-departure to avoid retrospective assessment.
- Ignoring the 500,000 GEL turnover ceiling. Two consecutive years above the ceiling automatically revokes Small Business Status and reverts the IE to 20% PIT on Georgian-source business income. Scaling founders should plan a transition to a Georgian LLC under the Estonian-style distribution model (0% retained, ~20% on distribution) before the ceiling becomes a problem.
FAQ
Will I still have to file a French tax return after moving to Georgia?
For the year of departure — yes, a final déclaration des revenus (formulaire 2042 plus 2042-NR) covering worldwide income up to the departure date and French-source income thereafter, plus the 2074-ETD for any article 167 bis exit-tax election. After that, only if you retain French-source income (French real estate, French-source dividends, French director’s fees), filed on form 2042-NR.
Is the article 167 bis exit tax deferrable on a France-to-Georgia move?
Yes. Both France and Georgia are parties to the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which the DGFiP’s published doctrine accepts as satisfying the assistance-in-recovery condition for ordinary 167 bis deferral. Deferral is granted against a sûreté — typically a nantissement (pledge) of the qualifying shares or a bank guarantee. The 15-year extinguishment under article 167 bis VII bis runs from the date deferral is granted.
Does the France-Georgia tax treaty give me an article 4 tie-breaker?
Yes. The France-Georgia DTA of 7 March 2007 (in force 1 June 2011) contains a standard OECD-model individual tie-breaker: permanent home → centre of vital interests → habitual abode → nationality → competent-authority mutual agreement. This is the structural advantage of the Georgia corridor over the Paraguay corridor, where no DTA exists and dual-residency disputes resolve in France’s favour by domestic law alone.
Can I get the 1% Small Business Status without living in Georgia 183 days?
Yes — Small Business Status is tied to Individual Entrepreneur registration, not to physical presence in Georgia. You can register as an IE, elect SBS, and operate from anywhere. However, that does not by itself make you Georgian tax resident in a way that displaces French taxation. To use Georgia as your tax-residency jurisdiction (and to access the France-Georgia DTA), you need either 183+ days/year in Georgia or HNWI status — and a centre-of-vital-interests file that holds up under article 4 B foyer scrutiny.
Can I keep my French SAS shares, bank accounts, and Paris apartment?
French bank accounts can be retained under non-resident profile. PEA / PEA-PME wrappers must be closed. SAS / SARL shares above the article 167 bis thresholds trigger the exit tax at departure (deferrable against sûreté on the Georgia corridor). A retained Paris apartment that remains “available” can re-establish foyer if the family uses it — convert to an arm’s-length 12+ month tenancy (not to family) before departure. IFI continues annually on French real estate above €1.3M.
How long does the full move take?
Realistic timeline 4–9 months from first planning meeting to issued IE registration, Small Business Status election, RUC, and Georgian bank account. The critical path is the French side: article 167 bis valuation, sûreté negotiation, foyer break, and final déclaration des revenus. The Georgian side is genuinely fast — IE + SBS in days, HNWI residency in 30–60 days.
What if the DGFiP later disputes my exit?
You have two layers of defence. First, the article 4 B faisceau d’indices is decided on the documentary file you built in Step 4 — registered Tbilisi lease, school enrolments, RUC, bank statements, presence days. Second, the France-Georgia DTA article 4 tie-breaker is available if domestic article 4 B goes against you, decided independently of French domestic law on permanent home and centre of vital interests. The mutual agreement procedure under article 25 of the DTA is also available in last resort.
Next Step
For the full destination-side breakdown, see Tax-Free Residency in Georgia. For the broader exit framework across all major origin countries, see How to Legally Exit a High-Tax Country. For the EU/EEA waystation alternative that secures automatic 167 bis deferral on day one, compare France to Portugal or France to Cyprus; for the no-DTA contrast that explains why Georgia is a structurally cleaner exit than the South American territorial-tax peers, compare France to Paraguay.
Book a free consultation — we specialize in France-to-Georgia relocations and 167 bis structuring with deferral against sûreté.
Last updated: 2026-04-27
Sources:
– Bulletin Officiel des Finances Publiques — BOI-RPPM-PVBMI-50 (article 167 bis CGI) (https://bofip.impots.gouv.fr)
– Code général des impôts, articles 4 A, 4 B, 119 bis, 167 bis, 187, 244 bis B (https://www.legifrance.gouv.fr)
– DGFiP — Convention France-Géorgie du 7 mars 2007 (https://www.impots.gouv.fr/international-particulier/conventions-internationales)
– OECD — Multilateral Convention on Mutual Administrative Assistance in Tax Matters, Georgia signatory status (https://www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm)
– Revenue Service of Georgia — Small Business Status, Individual Entrepreneur, HNWI residency (https://www.rs.ge)
– PwC Worldwide Tax Summaries — Georgia (https://taxsummaries.pwc.com)