How to pay yourself from a Georgian LLC—without treating the company account as your wallet

A shareholder-director can occupy several roles at once: investor, manager, employee, lender and customer of the company. Money paid in each capacity follows a different path. Typing “owner withdrawal” into online banking does not create a Georgian tax category, and a later spreadsheet cannot cure a payment that never had a commercial basis.

Begin with four questions: what obligation is the LLC settling, which document created it, who approved it, and which declaration or withholding follows? Record the answer before payment. This small discipline prevents the current account from becoming a mixture of salary advances, private purchases and supposed loans that nobody can reconcile.

Salary pays for work. Use an employment agreement or properly documented management arrangement, establish gross remuneration, run payroll and withhold the applicable tax. The Tax Code’s general personal income-tax rate is 20%, and salary paid by a Georgian enterprise is ordinarily taxed at source. The company should keep the contract, time or responsibility record where appropriate, payroll calculation, bank payment and RS.ge filing together.

A founder cannot make salary disappear merely by calling recurring monthly compensation a dividend. Conversely, salary is not automatically the best answer simply because the owner needs regular cash. It reduces company cash before profit distribution and carries payroll administration; the correct mix depends on actual work, corporate approvals, residence and social-security or pension facts.

Georgia’s distributed-profit model generally taxes a company when profit is distributed rather than while qualifying earnings are retained. The standard profit-tax rate is 15%, calculated under the statutory gross-up mechanism, and a dividend paid by a resident enterprise to an individual is normally subject to 5% withholding. A dividend requires distributable profit and a valid corporate decision; it is not an expense of the LLC.

Illustratively, if GEL 10,000 is the dividend payable before individual withholding, the company-level distributed-profit calculation may produce GEL 1,764.71 of profit tax (10,000 ÷ 0.85 × 15%), while GEL 500 is withheld from the dividend. The shareholder receives GEL 9,500 and the company’s total cash outflow is GEL 12,264.71. This is a teaching example—not a substitute for checking retained earnings, exemptions, prior-period tax, treaty position and the precise declaration.

A founder may buy a company flight, software subscription or client material personally and be reimbursed. Keep the supplier invoice or receipt, proof of personal payment, business-purpose note, travel order where relevant and company approval. Ideally the invoice names the LLC and includes the details needed for Georgian accounting and VAT treatment.

A supermarket basket, family holiday or owner’s apartment costs do not become deductible because the company reimburses them. Personal or undocumented expenditure can be treated as a benefit, non-business expense or distribution, with company-level profit-tax consequences and possible personal taxation. Mixed expenses require an evidence-based allocation.

If the shareholder lends money to the LLC, use a written agreement showing principal, currency, term, repayment and any interest. Principal repayment is conceptually different from income, but only if the original funding and continuing balance are evidenced. Interest can create withholding, transfer-pricing and foreign-country reporting questions. Interest-free or unusual terms between related parties need professional review.

Returning registered capital or buying back a share is not an informal bank transfer either. Corporate law procedure and Tax Code limits matter. Do not label an unexplained owner payment “loan repayment” after the bank or tax authority asks for documents.

Georgia withholding may finish the Georgian collection mechanism, but it does not promise that another country ignores the income. An owner resident elsewhere may need to report Georgian salary or dividends, claim foreign-tax credit, apply a treaty, pay social charges or explain management activity performed abroad. The LLC may also create a permanent establishment or management-residence issue outside Georgia.

Build a two-country memo before setting a recurring founder-payment policy. It should identify the owner’s residence, work location, treaty, company residence, payroll obligations and creditability of Georgian taxes. “My company is Georgian” answers only one part of the problem.

Keep separate company and personal accounts. Give every transfer a document number and category. Reconcile shareholder balances monthly, not at year-end. Approve dividends formally, process payroll on schedule, reimburse only evidenced expenses and obtain an accountant’s clearance before unusual related-party payments.

Banks also read the pattern. Regular transfers matching payroll or declared dividends are easier to explain during KYC than random cash withdrawals and card purchases. Good tax hygiene therefore improves banking credibility as well as compliance.