Whether your industry of interest is tourism, agriculture, manufacturing, real estate, outsourcing or some other field, there are many ways to make smart and easy business in Georgia. This country provides lots of opportunities for everyone, and has many advantages for starting or outsourcing successful business.
Free Trade Regimes
Due to Georgia’s unique and highly strategic location, being located on the historical Silk Road and serving as an entry gate to the Caucasus and Central Asia as well as Europe, Georgian products have access to 2.3 billion market. In addition to its location, Georgia’s value is increased by various trade agreements. To date, Georgia has signed FTAs with EU, European Free Trade Association and Commonwealth countries, Ukraine, Turkey and China (including Hong Kong); as well as The Association Agreement (“AA”) with EU, Deep and Comprehensive Free Trade Agreement.
Due to all this, goods produced in Georgia enjoy preferential trade regime. In terms of border control, all foreign travelers to Georgia enjoy highly accessible and service-oriented customs policies and administrative protocol. There is almost no custom duty, with 90 % of goods being exempt from import tariffs, with no quantitative restrictions. The average time for customs clearance is currently about 5-6 minutes – one of the fastest and most efficient in the CIS.
Taxation
According to the World Bank, Georgia is the 3rd Least Tax Burden Country in the World with Total Tax Rate (9.9%). In Georgia investors and local companies can enjoy low tax rates and a transparent taxation system.
There are six types of taxes (corporate income tax, personal income tax, value added tax, excise tax, customs tax and property tax) with flat and relatively low rates.
Tax payers additionally benefit from no corporate income tax on retained and reinvested profit; profit tax applies only to distributed earnings, no capital gains, wealth or inheritance tax, Double Taxation Avoidance Treaties with 56 countries Pension contribution – 2% paid by employer, 2% paid by employee, 2% paid by Government.
Favorable Tax Regimes in the Country provide four Free Industrial Zones (FIZs) and Internal Processing Customs Regime, which means that according to Tax Code of Georgia, if a company produces goods intended for export market, it can apply for a license about “Internal Processing Regime” to the Ministry of Finance. This license will grant the company a right to import raw materials without paying import/customs tax and VAT on these materials.
Labor Force
Georgia’s main advantage is young, skilled and competitively priced labor force. Georgia offers young, highly motivated, multi-lingual and well-educated workforce. Majority of younger population speaks fluent English and additionally Georgia has language skills to serve German and Russian speaking countries.
Permits are not required in Georgia and citizens of 95 countries can stay in the country without visa during whole 1 year, this helps attract professional employees from other countries in the wider region.
Georgia has the very flexible Labor Code and according to Heritage Foundation, Georgia ranks 20th globally in the Labor Freedom Index. All ILO core conventions are ratified by Georgia. Only one taxes payable based on a salary are the Personal Income Tax (flat 20%) and pension contribution 2%.
There is no minimum wage, creating conditions where compensation for labor is based entirely on an agreement between employer and employee.
There are 62 higher educational institutions and 66 professional education centers, which ensure constant flow of high quality professionals every year.
The government promotes vocational education, having aided the creation of few dozen Vocational Education Institutions throughout Georgia. These institutes provide professional courses in different types of practical subjects. To support development of talent pool, government finances most of the course’s fees. As a result, companies can enjoy the benefits of having a trained pool of potential employees.
Key Sectors for Investing and Starting New Business
Although, small by territory and relatively modest by scale of economy, Georgia still avails of variety of investment opportunities into range of business and economic sectors, among them, are:
Energy – with the highest export potential;
Tourism – with opening up of qualitatively new routes and destinations coupled with free tourist zones;
IT and communications – bearing in mind a relatively lower penetration of the market, and, consequently, with plenty of market share to be seized yet;
Real Estate – distinguished as the rapidly developing industry with quest for multi-purposes infrastructure;