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Georgia: Free industrial zones


Lopatina Irina

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 property tax;

  • 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 repatriation.

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, including:

  • 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 (

Eurofast Georgia

Tel: +995 322 18 03 10


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