Why Set Up Your Business in Georgia?
Georgia, or Georgian Sakartvelo, is a country of Transcaucasia located at the eastern end of the Black Sea on the southern flanks of the main crest of the Greater Caucasus Mountains. Bordered by Russia on the north and northeast, Azerbaijan on the east and southeast, Armenia and Turkey on the south and the Black Sea on the west, Georgia is home to a population of nearly 11 million. The location of Georgia has its geostrategic significance – it is a bridge between Europe and Asia linking the East and West, offering direct access to European, GCC and CIS markets.
An Overview of Georgian Economy
Georgia is one of the members of the European Union’s Free Trade Area, with the EU continuing to be the country’s largest trading partner since 2014. In addition, Georgia is a member of the World Trade Organization (WTO) since 2000. Georgia has seen stable economic growth over the years. The Georgian government managed to maintain strong momentum in liberalizing economic activity while restoring fiscal discipline. Trade plays an important role in Georgian economy where the value of exports and imports makes 110 percent of GDP. On top of that, the open-market policies, backed by attractively low tax rates and regulatory efficiency, have supported the flows of trade and investment.
The main economic activities in Georgia include mining of manganese, copper, and gold; cultivation of agricultural products such as grapes; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. Other than the hydropower capacity in the country, Georgia imports almost all of its needed supplies of natural gas and oil products for its energy needs. Furthermore, the pro-business political climate has brought major relocation and expansion projects to the state where Georgian economy continues to grow.
Why Invest in Georgia
Georgian advantageous economic offers a promising investment platform for business. The Georgian government encourages foreign investments by implementing pro-business policies as well as creating a good business environment.
Let us take a glance at the reasons why investing in Georgia?
- Geostrategic location – Situated at the juncture of Western Asia and Eastern Europe, Georgia is the perfect trade centre that provides easy and direct access to nearby countries, connecting Asia, Middle East and Europe.
- Springboard to enter regional markets – Georgia’s liberal trade policies provide global investors with a good opportunity to not only access the country’s market, but the wider region’s markets due to the absence of customs and import tariffs.
- Free Trade agreement with EU
- Skilled workforce and affordable labor cost – The young, well-trained, and educated workforce is another key point that appeals investors from all over the world. One thing worth mentioning is no working visas or permits are required for citizens from around 100 countries during the 90-day stay in the country, which helps to pool foreign talents in the wider region.
- Low tax rate – Georgia is one of the jurisdictions that offer low tax rates.
- Income tax – 20% (flat rate)
- Corporate tax – 15%
- VAT – 18%
- Excise tax – Varies
- Customs tax – 0%, 5% or 12%
- Property tax – 1% on the self-assessed value of property
Georgia’s advantageous position as the gateway between Europe and Asia provides a multiplicity of benefits to investors across the globe. Its attractive tax regimes, vibrant business environment as well as the stable political situation, are the factors that contribute to the monumental economic growth. If you are expanding your business portfolio internationally, Georgia could be one of the countries on your bucket list, and it has a lot more to offer.