Georgia is becoming an increasingly popular jurisdiction for
investments and export – import transactions with
Commonwealth of Independent State (CIS) and EU countries. Among
other factors, the attractiveness is also due to the absence of
strict currency control rules and the availability of free
trade regimes with European and other foreign countries.
Additional advantages include the absence of corruption, the
transparent conditions of conducting business, the signed
association agreement with the EU, the introduction of a
visa-free regime with the EU, the six fixed taxes and lowered
tax rates, the significantly shortened list of licenses and
permits, as well as simplified administration procedures.
Georgia is among the top ranked countries in the World Bank's
list on the ease of doing business. In addition, Georgia has
significantly succeeded in establishing a business-friendly
environment and maintaining a healthy, comfortable and
attractive investment climate for foreign investors. In this
regard, it is specifically worth mentioning the attractive
investment opportunities in the Georgian free industrial zones
(FIZ) regulated by the Law of Georgia on Free Industrial Zones,
which aims to promote economic growth, enhance industrial
competitiveness and attract foreign direct investments.
The FIZs create such tax, legal and administrative
environments that tenant companies can compete successfully on
global markets. The FIZ is a free zone envisaged by the
Georgian Tax Code where business-friendly regulations and
favourable tax and customs regimes apply. In particular,
payments within a FIZ can be carried out in any currency and
there are no foreign exchange controls and trade barriers or
quotas. Some types of activities, which normally require a
license or permit, are also relieved from such restrictions in
the FIZ or can be obtained using simplified procedures.
Additionally, there are a number of operational advantages in
the FIZs, given their location and infrastructure.
A FIZ can be created under the initiative of either the
government, or any legal entity or individual. An entity can
operate in a FIZ by means of registration therein. According to
Georgian legislation, there are no restrictions on foreign
ownership of companies or the form of ownership itself.
The most important advantage of operating a business in a
Georgian FIZ is the myriad of tax incentives. In particular,
among others, the following incentives are applicable:
- FIZ incorporated entities are exempt from
- Goods imported into FIZ are not subject to
VAT and import tax;
- Transactions among FIZ incorporated
companies are not subject to VAT;
- The profit of a FIZ company is exempted
from corporate profit tax on certain conditions envisaged by
the Tax Code of Georgia; and
- There is no restrictions on capital
For the majority of other issues, FIZ companies are subject
to the standard Georgian legislation, including the double tax
treaties entered into by Georgia with other countries.
Accordingly, relevant withholding taxes on dividends, interests
and other payments made abroad to a foreign shareholder, apply
to such FIZ companies as well.
Georgia has industrial zones in several places,
- The capital of Georgia, Tbilisi;
- Kutaisi, which is an important connecting
hub between Tbilisi and Black Sea Ports; and
- Poti – the first free industrial
zone in the Caucasus region.
Several other free industrial zones are in the process of
being planned or built.
Lopatina Irina (email@example.com)
Tel: +995 322 18 03 10