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Georgia, located at the crossroads of Western Asia and Eastern Europe, is a small but open market that derives benefits from international trade, tourism, and transportation. The country has made sweeping economic reforms since 1991 that have produced a relatively well-functioning and stable market economy. It ranks seventh in the 2020 World Bank’s Ease of Doing Business index and twelfth in the Heritage Foundation’s 2020 Economic Freedom Index.
Fiscal and monetary policy are focused on low deficits, low inflation, and a floating real exchange rate, although the latter has been affected by regional developments, including sanctions on Russia, and other external factors, such as a stronger dollar. Public debt and budget deficits remain under control. However, global challenges posed by COVID-19 and measures needed to mitigate the spread of the virus have placed significant pressure on the domestic currency and the local economy.
The United States and Georgia work to increase bilateral trade and investment through a High-Level Dialogue on Trade and Investment and through the U.S.-Georgia Strategic Partnership Commission’s Economic Working Group. Both countries signed a Bilateral Investment Treaty in 1994, and Georgia is eligible to export many products duty-free to the United States under the Generalized System of Preferences (GSP) program.
Georgia Offers:
A very safe living conditions and a business friendly environment: Georgia has substantial free-trade agreements with the EU, the USA and its neighboring countries.
Strategic Location: Georgia is a small country of around 3.5 million people, located on the Black Sea, nestled between Russia, Turkey.
Rated 7th easiest country to do business in globally.
Excellent banking & financial systems with high interest rates on deposits (9% to 13%)
Huge government and international investment into new construction and national infrastructural projects.
Three International Airports: All have quick, direct and cheap flights to all European countries as well as Israel, Dubai, Istanbul, Cyprus and Greece.
Shipping: It also has two container and shipping ports to the world and is on the direct China - Europe Rail route.
Click-on the links and you will develop a good understanding of the Georgian economy and find substantial resources to guide you though the process of opening a company.
On this page we have also included links to Georgian companies with whom you may work and communicate directly to open a company or start direct government liaison.
We suggest - that you work through our business club as we are English speaking and have qualified interpreters and translators to assist you.
We have your best interests at heart and will offer you sage advise with realistic costs and a no-nonsense approach.
Georgia-Connect is your gateway to Georgia… Dotting the “I”s and crossing the “T”s.
GEORGIA
FOREIGN INVESTMENT
FDI in Figures | What to consider if you invest in Georgia | Procedures Relative to Foreign Investment | Investment Opportunities
FDI in Figures
According to UNCTAD's World Investment Report 2020, FDI flows to Georgia in 2019 reached USD 1.3 billion, unchanged compared to 2018. At the same time, the total stock of FDI was estimated at USD 19 billion.
FDI is largely supported by natural resources. More than 30% of incoming flows are related to extractive industries. Trade and finance attract 20% and 11% of FDI inflows, respectively.
Georgia attracts investments from a number of countries. Azerbaijan is the largest investor in the country because of the ongoing construction of the Shah-Deniz pipeline.
More than half of FDI inflows usually come from Europe, mainly from Cyprus and Luxembourg. However, the country is opening more and more to Asian investments.
According to provisional data from the National Statistics Office of Georgia, FDI flows in the first three quarters of 2020 reached USD 719 million, down from USD 946.3 million at the same time a year earlier.
UNCTAD estimates that FDI flows into Georgia will grow moderately in the coming years, supported by rising commodity prices and stronger economic growth.
To attract investors, the country offers many tax and legislative advantages. The Georgian economy has been almost fully liberalised and currently offers one of the most attractive economic climates for investment.
Corruption, historically very present in the intermediate levels, has been largely eradicated - a major obstacle to attracting FDI. According to Transparency International, Georgia currently ranks 45th on the Corruption Perception Index.
Georgia is the 7th easiest place to do business in the world according to the World Bank's Doing Business Report 2020, one spot down compared to the previous year.
After providing cheaper electricity, strengthening the protection of minority investors and improving the resolution of insolvency problems, the country facilitated the creation of business, the payment of taxes and the execution of contracts in 2019.
Foreign Direct Investment FDI Inward Flow (million USD)1,9631,2651,268
FDI Stock (million USD)17,95518,25819,145
Number of Greenfield Investments*192119
Value of Greenfield Investments (million USD)7181,2171,380
What
to consider if you invest in Georgia
Since 2004, the Georgian government has established a range of measures in order to develop the country's economy, including:
The privatization of public companies;
The fight against corruption;
Establishing a principle of non-discrimination between Georgian and foreign businessmen through the law "On promotion and Guarantees of Investment Activity" and "On State support on Investment";
Drastically reducing the procedures for forming a company, which take on average two days;
Reduction of corporate tax;
Lifting of barriers for business operations;
Liberalization of the labour market.
Strong Points
Georgia's competitive advantages in terms of attracting FDI include:
Good resistance to the regional economic crisis (2014-2016).
Agricultural, mineral, hydroelectric and tourism potential;
International support, including from the EU and the IMF;
Strategic geographical position (Caspian oil and gas crossing point);
Democratic political system
Business friendly environment (low corporate taxes, simplified registration procedures).
Weak Points
The country's main weaknesses in terms of attracting FDI include:
Structural trade deficit, low diversification and export valuation;
High poverty due to unemployment, underemployment and inadequate training;
Low productivity of agriculture: half of assets, but less than 10% of value added;
Bilateral Investment Conventions Signed By Georgia.
Georgia has signed bilateral conventions on FDI with 33 countries.
Procedures
Relative to Foreign Investment
Freedom of Establishment
Freedom to take holdings is guaranteed.
Acquisition of Holdings
There are no restrictions on the acquisition of a company by a foreign national or a foreign company in Georgia.
The property, investments and the rights of investors are protected and guaranteed by law in Georgia.
Property rights are guaranteed by article 21 of the Georgian Constitution.
The law defines simple and well defined mechanisms to make investments, to acquire (or transfer) properties and companies in the country.
According to the constitution of Georgia international treaties have direct legal force in Georgia, which ensures a liberal legislative environment for conducting business and making investments in the country.
Obligation to Declare
In order to establish an enterprise a number of documents must be submitted to the National Agency of Public Register of Georgia.
Those documents depend on the legal form of the enterprise and may be found in the "Law on Entrepreneurs".
To learn more about the process of registration, please visit Invest in Georgia website.
Specific Authorizations
Investing in certain sectors is restricted by law - manufacturing and distribution of nuclear, biological and chemical weapons, as well as building of testing ranges, implementation of scientific research related to human cloning, production of narcotics and other activities prohibited by international agreements.
Investments in these sectors can only be made through special permits or licenses.
Law on Promotion and Guarantees of Investment Activity protects foreign investors from subsequent legislation that may alter the condition of their investments for a period of ten years (grandfather clause).
To learn more about the permit and licenses needed to start a business, please consult the Investor's Handbook by Invest Georgia.
Find out more about Investment Service Providers in Georgia on GlobalTrade.net, the Directory for International Trade Service Providers.
Investment
Opportunities
Investment Aid Agency
National Information Agency - Agency for the Promotion of Foreign Investment
Tenders, Projects and Public Procurement, Tenders Info
Tenders in Georgia
Tenders & Projects from Georgia - Globaltenders
Tenders Worldwide - DgMarket
Other Useful Resources
Find out more about Investment Service Providers in Georgia on GlobalTrade.net, the Directory for International Trade Service Providers.
