Invest in Georgia – 6 main reasons
There is an investing boom in Georgia, this small country, located at the crossroad of Asia and Europe is a unique opportunity for investors from all over the world, such as the UAE, Saudi Arabia, all GCC countries, China, India, Azerbaijan, Europe and many others. Why invest in Georgia? What attracts investors most of all?
In this article, we will briefly discuss the six main aspects of the Georgian investing environment, and why it is so attractive for foreign investors.
Relevant article: Investment to Georgia
Recently, the government of Georgia expressed strong support for further investments from the GCC into Georgia; – this was clearly noted during the meeting between Mr. Fady Asly Chairman of Channel Georgia Consulting and H.E. Giorgi Kvirikashvili Prime Minister of Georgia, held on March 21, 2018.
Indeed, Georgia has become a privileged and attractive destination for investors from all over the world for the following reasons:
Georgia is strategically situated on the historical Silk Road between Asia and Europe.
Bordered by the Black Sea to the West, Russia to the North, Turkey and Armenia to the South and Azerbaijan to the East.
Georgia is a transit corridor with a strategic access to the sea and a door to Europe, connecting China to the European Continent and creating a strategic and reliable alternative to playing the role of a reliable alternative to Russia’s land road.
Doing business is easier
Georgia is ranked 9th in the World Bank Doing Business Report– www.doingbusiness.org, ranking higher than countries such as Sweden, Estonia, Finland and Australia.
Free of corruption
Corruption is a serious issue for any business; Georgia is leader in fighting corruption through very serious reforms that never stopped since 2004. According to Transparency International, Georgia ranks 46th out of 180 countries and ranks first in the Caucasus and Central Asia.
Taxes are low in Georgia, following some amendments; the tax code now sets the following taxes and rates:
– Income tax – 20% (flat rate)
– Corporate tax – 15%
– VAT – 18%
– Excise tax – on few selected goods
– Import tax – 0%, 5% or 12%
– Property tax – up to 1%
In addition companies that reinvest their profits or keep them in the country don’t pay profit tax.
Potential staff and Labor costs
Georgia has quite flexible Labor Code. According to Heritage Foundation, Georgia has one of the most liberal labor environments not only in the region, but globally and Labor Freedom Index is 77.3 out of 100 score.
Georgia is full with talented and skilled youngsters; many of them are multi lingual and received a higher education in the West. Russian and English are fluently spoken among the young generation, yet many of them speak German as well.
Average monthly salary in Georgia is approximately 410-420 USD, which is relatively low compared to the average salaries of other European countries. Therefore, the costs of potential skillful staff is extremely competitive.
Free Trade agreement with EU
The EU and Georgia signed an Association Agreement on 27 June 2014 it has entered into force since 1 July 2016.
The agreement introduces a preferential trade regime – the Deep and Comprehensive Free Trade Area (DCFTA). This regime increases market access between the EU and Georgia based on having better-matched regulations.
In addition Georgia has signed a Free Trade Agreement with China, Turkey and the countries of the Former Soviet Space; this means that Georgia has free trade with more than 2 billion people.
Relevant article: Consulting in Georgia