As a bridge between Europe and Asia, the economy of Georgia is highly integrated with international markets. Georgia is located in the Caucasus region and is a gateway between Europe and Asia. It borders the Black Sea from the west, Russia from north, Turkey and Armenia from the south and Azerbaijan from the southeast.
To attract investors, the country offers many tax and legislative benefits. The Georgian economy has been almost fully liberalized and now offers one of the most attractive investment climates in the region. Corruption, historically very present at intermediate levels, has been largely eradicated, a major breakthrough in terms of attracting FDI. According to the Transparency International rating, in 2016, the country ranked better than Italy and Brazil, ranking 44th of 176 countries surveyed. Also, Georgia ranked 16th out of 190 economies in the 2017 World Bank Doing Business report, an improvement compared to the last year when it ranked 24th.
FDI by sectors (source Invest in Georgia, 2015): Transport and telecommunications (44%), Financial sector (14.2%), Construction (9.6%), Energy sector (6.7%), Manufacturing (6.7%), Hotels and restaurants (4.5%), Agriculture (2.1%). The biggest FDI investor in 2016 was Azerbaijan, with the transport and communications sectors being the largest beneficiaries.
Why You Should Choose to Invest in Georgia
Georgia’s competitive advantages are:
– Its geographical location, which gives it an important geostrategic position due to the oil pipelines transporting Caucasian oil to Europe pass through its territory
– A low corporate tax rate
– Simplified company registration procedures
– highest literacy rates
– A government that wants to attract foreign investment, and takes appropriate measures.
The country’s main weaknesses are:
– The limited domestic market
– The instability of its relationship with Russia
Government Measures to Motivate or Restrict FDI
The Georgian government has established a range of measures in order to develop the country’s economy:
– The privatization of public companies
– The fight against corruption
– Establishing a principle of non-discrimination between Georgian and foreign businessmen
– Drastically reducing the procedures for forming a company
– Reduction of corporate tax
– Liberalization of the employment market
Acquisition of Holdings
There are no restrictions on the acquisition of a company by a foreign company in Georgia. Because of the changes to the Tax Code and Law on Entrepreneurs in 2005 and 2006, acquisition of a company has been made simple and efficient.
Property, investment and investor rights are protected and guaranteed by law in Georgia. Property rights are guaranteed by article 21 of the Georgian Constitution. The law defines simple and well defined mechanisms to make investments, to acquire (or transfer) properties and companies in the country.
According to the constitution of Georgia international treaties have direct legal force in Georgia, which ensures a liberal legislative environment for conducting business and making investments in the country.
How to start a business in Georgia
Georgia is 6th country globally in Ease of Starting Business according to the World Bank Ease of Doing Business rank. Starting a business in Georgia is very simple, 1-2 days and 100-200 GEL is needed for company registration.
The rules regarding the establishment, registration, reorganization and liquidation of a company can be found in the Law of Georgia on Entrepreneurs, which sets an exhaustive list of enterprises that can be established in Georgia.
Follow the link to see more about how to register a business in Georgia:
Georgia has a very flexible and comprehensive legislation that creates a business friendly environment and maintains a healthy investment climate.
On June 27, 2014 the Association agreement that intends the Deep and Comprehensive Free Trade Agreement (DCFTA) between Georgia and the EU was signed. According to the requirements of Association agreement, Georgian legislation is in an ongoing process of harmonization with EU legislation in order to integrate EU standards in to Georgian regulations.
Favorable Tax Regimes in the Country
Free Industrial Zones
Currently four Free Industrial Zones (FIZs) operate in Georgia in the following cities: Poti (sea port), Kutaisi (third largest city, two FIZs) and Tbilisi (capital city). Businesses registered in Free Industrial Zones benefit from certain tax exemptions:
If a company produces goods for export in FIZ, it is exempt from all taxes except Personal Income Tax (20%), which is paid from employee salaries.
If a company exports products from FIZ to the territory of Georgia, in addition to Personal Income Tax, it has to pay VAT and 4% of the revenue from national sales.
All Free Industrial Zones (FIZs) are operated by private companies and investor should rent a space from FIZ operator:
Tbilisi FIZ is operated by Tbilisi Free Zone JSC
Poti FIZ is operated by Rakia Georgia FIZ LLC
Kutaisi FIZ #1 is operated by Georgia International Holding (LLC Fresh Georgia)
Kutaisi FIZ #2 is operated by Hualing Group
Georgian National Investment Agency
The Georgian National Investment Agency plays a role of moderator between foreign investors and the Government of Georgia, ensuring that investors receive updated information and have the means of effective communication with Government bodies. As it is a Government agency, they provide all services free of charge.
The Government of Georgia has established state owned “Partnership Fund” with an equity value of 1.4 billion which provides equity financing to financially viable projects. The Partnership Fund participates in new investment projects in order to decrease the country risk for foreign investors and it acts as a “sleeping Partner” with a predetermined, clear exit strategy.
Hospitality and Real Estate;
Regional Logistics Hub;
Agriculture and Food Processing;
Tenders, Projects and Public Procurements:
Tenders in Georgia – http://www.tendersinfo.com/global-georgia-tenders.php
Tenders & Projects from Georgia – http://www.globaltenders.com/tenders-georgia.htm
Investment Possibilities in Oni Municiplaity
Meat consumption in Georgia has an increasing trend. Around 25% of beef and 50% of pork consumed in Georgia are imported. There is a need and the capacity to build modern farms to supply the local market in the first stage and to distribute through the region as a next step. Farming in Oni municipality has many advantages, such as the ecological clean environment, cheap land and labor, and easy access to different resources.
Fresh/Mineral waters and resorts
Oni waters are respected for their high quality and good taste. The export of fresh and mineral water from Georgia reaches 137 million USD, 17% of total agricultural exports of the country. There are many mid and large scale springs in Oni whose licenses can be obtained from the Ministry of Environment and Natural Resources Protection of Georgia.
Shovi is a mountain health resort on the south slopes of the main Caucasus ridge. The Picturesque landscape and high mountains make this resort an unforgettable place for visitors. There is a great investment possibility in building new hotels, restaurants and other tourist infrastructure here.
Citizens of 94 countries may enter and stay in Georgia without a visa for full 1 year. Visitors who are holders of valid visas or/and residence permits of 50 countries may enter and stay in Georgia without visa for 90 days in any 180 day period.
For further details about the visa regime for each country nationals and stateless persons residing in the relevant countries, please visit the website of Consular Department of the Ministry of Foreign Affairs of Georgia.
To obtain visa you can also visit E-visa portal, which enables the foreigners travelling to Georgia for tourism and bushiness purposes to receive a Georgian visa without visiting Consular Office of Georgia.