Georgia

At a glance

Main competitive advantages

  • Strategic geographic location and developing infrastructure  
  • Business friendly country, with a growing and diversified economy  
  • World’s leading reformer  
  • Liberal trade regimes and immigration policies  
  • Low taxes and simplified licensing and permitting procedures  
  • Young and talented workforce, available at competitive costs


Economic outline

Key figures

GDP: GEL 24 billion / EUR 9.9 billion (2011)                   Population 4.4 million. Area: 69,700 km²

 

Since its independence from the Soviet Union in 1991, Georgia has become a Presidential-Parliamentary Democratic Republic and opened up its economy to the world. The adoption of strong investment protection legislation and liberal tax and labour systems has contributed to a significant growth in local production and exports. Currently, there are approximately 260,000 businesses operating in Georgia. The business activity breakdown is the following: 47% Trade & retail, 13% Real estate, 12% Manufacturing, 6% Transport & communications, 5% Hospitality, 5% Health & social work, 5% Construction and 6% Other sectors.

Market access:

  • Free Trade Agreements with CIS countries (11 countries, 275 million people) and Turkey  
  • General System of Preferences (GSP+) trade regime with the EU: export of 7,200 products free of duty 
  • Generalized System of Preferences (GSP) with the USA, Canada, Switzerland, Japan and Norway 
  • Comprehensive FTAs with the EU and the USA are under negotiation  
  • Membership in the WTO (2000): MFN (Most-favoured-nation) regime with all WTO member countries


Foreign Investment

  • Open door policy for investors in any sector  
  • 4,600 businesses established by foreign capital or with its participation  
  • Top 5 sectors attracting FDI (2009-2010): Transport and communications, Manufacturing, Real estate, Financial sector, Other services
  • Top 5 investor countries (2005-2010): United Kingdom, United Arab Emirates, Turkey, USA, Netherlands



Business environment

Ease of doing business

Doing business 2012 rank for Georgia: 16 / 183. Change in Rank: ↑ 1

"World’s Number One Reformer 2005-2010” Latest improvements in:

  • Paying Taxes ↑20 : simplified reporting for value added tax and introduction of electronic filing and payment of taxes;  
  • Getting Credit ↑13: amendment of the civil code to broaden the range of assets that can be used as collateral;  
  • Protecting Investors ↑4: introduction of requirements relating to the approval of transactions between interested parties;  
  • Starting a Business ↑1: elimination of the requirement to visit a bank to pay the registration fees.


Investment climate

Georgia is one of the most open countries to foreign equity ownership.

Investing Across Borders (IAB) assessment for Georgia:

  • Investing Across Sectors: all sectors are fully open to foreign investment;  
  • Starting a Foreign Business: establishing a foreign-owned limited liability company (LLC) in Georgia is fast (only 4 days), efficient (only 4 procedures, application is available online) and inexpensive (registration is free of charge, no minimum capital requirement for foreign or domestic companies);  
  • Accessing Industrial Land: both privately and publicly held land may be bought or leased (land surface is not restricted and contract duration can be unlimited);  
  • Arbitrating Commercial Disputes: enforcing arbitration awards takes around 13 weeks for domestic awards and 37 weeks for foreign awards.


Tax system and incentives

Georgia offers one of the world’s friendliest tax regimes: 18% VAT; 20% income tax (to be reduced to 18% in 2013 and 15% in 2014); 15% corporate profit tax; 5% dividend and interest income tax (to be reduced to 3% in 2013 and 0% in 2014).

With the aim to increase foreign investment and export, to reinforce Georgia's trade-transit function internationally and to attract new international financial institutions, Georgia launched 3 Tax-Free Regimes:

  • Free Industrial Zone (FIZ): exemption from most taxes for international operations registered within the FIZ of Kutaisi, dedicated to trading & services, heavy industries, warehousing & storage and manufacturing activities, Poti, developing state-of-the-art business centres, industrial and logistic parks and Tbilisi, which includes commercial & office buildings, university campus, hotel facilities, residential area, customs warehousing and logistics centres;  
  • Free Warehouse Enterprise: exemption from profit tax applied to income received from re-exporting goods and 0% VAT rate on the supply of goods to a VAT taxpayer;  
  • International Finance Company: wealth management, asset management, financial intermediation and other similar activities are not required to obtain a license from the National Bank of Georgia and are exempted from taxation.


Referent organisations and useful resources

  • Georgian Chamber of Commerce and Industry (GCCI): public non-governmental organisation representing the interests of the business community in Georgia and offering a range of services such as certificates, barcodes, arbitrage, partner search, business networking, SME assistance, etc.  
  • Georgian National Investment Agency (GNIA): public agency responsible for assisting foreign investors before, during and after the implementation of their project and for promoting Georgian exports  
  • Georgian Employers’ Association: member based association that provides a variety of management and human resource services designed to enhance companies’ competitiveness 
  • Georgia.gov.ge: official web-site of the Republic of Georgia, providing information about the business climate, investment opportunities, energy, agriculture, tourism, etc.

This publication has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of EUROCHAMBRES and can in no way be taken to reflect the views of the European Union.

© 2011 East Invest Support Office
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