Attractive transit location with easy access to Europe, the Black Sea coast, and the Caucasus Mountain range, as well as delicious cuisine and wine. These are not the only advantages of Georgia that make more and more companies locating there.
Why Georgia?
Following a severe economic slump in 2015, the Georgian economy has been able to recover to a more steady level of growth. It is, nevertheless, still a developing country. As a result, you may still get great deals in Georgia on real estate and services (corporate, IT, marketing, professional services). Employment costs are lower than elsewhere (the average monthly salary is 400 EUR).
To boost the economy, the government introduced many business incentives for investors, including tax advantages:
- Corporate Profit Tax – 15%, payable only when the dividend is distributed,
- Double Tax Treaties Network – very broad, more than 50 DTTs signed,
- Dividend withholding tax – 5%, can be reduced by DTTs.
What sort of business to do in Georgia?
Real Estate. Depending on your profile, you can invest in real estate in one of three regions. The beach (the summer season lasts up to 6 months, currently additional attractions are being created to extend the season to 8 months), the Caucasus Mountains (4 months of ski season), Tbilisi (no seasonality – the business hub is buzzing with people all year round – 80 percent occupancy per year)
Agricultural business. Georgia is a fruit, vegetable, and drinking water-rich country. Low land acquisition costs, substantial government subsidies, and low labor costs will all benefit agricultural output on a worldwide scale. Also notable is the world-famous Georgian wine, the unique production method of which has been added to the UNESCO heritage list.
Shipping, maritime and IT business. In Georgia, there are two international commercial and passenger seaports on the Black Sea (Batumi and Poti). The third one is under construction – Anaklia. Qualified marine staff are ready to help this industry grow. A large group of IT professionals, an excellent location for Shared Services Centers, and government assistance in the form of tax incentives for investors and employers.
Trading goods. The country is situated along the old Silk Road. The railway network is being expanded, resulting in a good network of connections between Asia and Europe. Starting from January 2018 free trade agreement (FTA) with China is effective.
How to take advantage of the benefits?
Free Zone. All Free Zones provide generous investment incentives such as possibility of 100% foreign ownership, no corporate taxation, no restriction on repatriation of capital and profits, no exchange control, no restrictions on investment in any sectors.
IT Virtual Zone Company. VZ regime is designed for Georgian companies dealing with IT (information technology) services exported outside Georgia. The company is structured in the same way as the local LLC and the VZ license issued by the Revenue Service. The condition of obtaining the VZ certificate is performing IT services to entities located outside Georgia.
Taxation: exemption from corporate income tax in Georgia.
International Company. IC regime is designed for Georgian companies dealing with IT services and / or commercial and maintenance services by a shipowner and / or services related to ship ownership. The company is structured in the same way as the local LLC and the IC license issued by the Revenue Service.
Taxation: exemption from Dividend tax, VAT and property tax; Reduced tax for CIT and PIT in Georgia.
Special Trading Company. STC regime is designed for Georgian companies dealing with international trade. The company is structured in the same way as the local LLC and the STC license issued by the Revenue Service. The condition of obtaining the STC certificate is trading outside Georgia.
Taxation: exemption from corporate income tax in Georgia.
