Today in our review Georgia. We will talk about the investment attractiveness, culture, investor protection and changes that have occurred in the country.
Georgia yesterday and Georgia today are two different countries. Today the country is moving by leaps and bounds towards economic growth and European integration. Here is the relevant data of the economic development indicators.
Georgia ranks No.2 in the rating of the countries by the following criteria: low-cost housing, safety, and friendliness. The growth of tourism in this country shows positive dynamics every year. The General Secretary of the World Tourism Organisation, Taleb Rifai, called phenomenal the growth of tourist numbers in Georgia. Last year the growth of tourist numbers made up more than 20 %. About 6,3 million tourists came to Georgia. The income from international tourism in 2017 made up $2,5 billion. As you can see, while most of the countries are going through a crisis, Georgia is just watching all the processes from the outside, as if they didn’t concern it.
What do they invest in Georgia in?
Today, a huge flow of investments is carried out in the real estate sector. Not so long ago, a new format of real estate – apartment hotels became popular in Georgia. These are multi-story hotel complexes with apartments. We told in detail about apart-hotels and opportunities of earnings or the organization of business in the publication-about a unique format of real estate-profitable apartments.
This is not just residential real estate - it is a turnkey business managed by a professional team. After all, you do not need to worry about management, occupancy, the property management company will take charge of it. In fact, we are talking about a very profitable business that does not require your active participation.
Why is it worth starting your own business in the field of apartment management in Georgia:
1. Georgia is developing dynamically, the real estate market is growing. According to experts, this situation will be observed for another 15-20 years.
2. Georgia has achieved a very high level of security: both general and for business. This ensures the safety of invested funds.
3. There is no property tax in Georgia .
4. Low real estate prices (compared to counterparts in Europe) .
5. Payback from 4 years. The purchased apartments can be rented, and thus, given the growth of tourists in Batumi and Georgia, the return on investment is up to 4 years – this is a very high figure!
6. Finally, the acquisition of real estate in Georgia gives the right to obtain a residence permit.
Let's take a closer look at each advantage.
1. General dynamics of the country's development
Until 2008, the real estate market of Georgia has grown continuously in terms of. From 2003 to 2008, on average, real estate in Georgia grew by 10-15% per year. From 2006 to 2008, the annual growth of prices for Georgian real estate was 20%.
In 2008, there were two key events for the country's real estate market: the global crisis and the military conflict with Russia. However, the fall in prices as such did not happen. Georgia survived the global crisis relatively calmly - there was the lowest decline in GDP among the countries of the former Soviet Union, and in 2010 GDP growth was 6.4%. As for the real estate market, the growth of prices after a temporary "freeze" albeit at a slower pace, but continued.
Real estate in Georgia for Russians.
Since the beginning of 2014, the dynamics of growth in the volume of purchased real estate has been observed. This, on the one hand, contributes to the warming of relations with Russia, on the other hand, the signing in 2013 of the Association Agreement with the EU. In February 2016, the number of transactions in the real estate market was about 50 000, which is 14% more than in February 2015 and 7.8%, compared to January 2017. Quarterly growth of investments in Georgia averages 15-20% compared to the previous period.
Given the tremendous growth of tourism throughout Georgia and the continuing good dynamics of the real estate market, we can conclude that it is now quite profitable to buy real estate in the tourist cities of the country Tbilisi, Bakuriani, Batumi and others.
2. Is it safe in Georgia?
According to the Gallup World rating, Georgia is firmly among the ten countries with the highest level of security. And it is not only about personal security, although it should be noted that here Georgia has become a leader, reducing the crime rate to a minimum, but also about the safety and transparency of doing business. At the same time, the procedure of registration of real estate has been greatly simplified and now it takes literally 1 day.
In the ranking of economies from 189 countries ("Doing Business Report" of the World Bank and IFC, according to the financial Corporation DOING BUSINESS):
- Georgia is on the 8th place in terms of ease of doing business
- on property registration, Georgia is on the 1st place
- Georgia is on the 3rd place in terms of lending
- Georgia ranks 16th in investor protection
It should also be noted that Georgia has the lowest total tax burden in Central and Eastern Europe, and the 7th in the world.
Real estate in Georgia is tax-free and this is a huge advantage that attracts investors from all over the world to the country. Only rent revenue is taxed, and this figure is also very low.
The rate depends on the level of income received and does not exceed 1% per year of the property value. Therefore, the owner of the property does not pay this tax if he has no income in the country.
According to such indicator as "property registration", Georgia took the leading positions in the world, gaining 99.88 out of 100 possible points. For registration of real estate will need only one procedure. The registration period is one day. There are no restrictions on foreign buyers. To make a transaction, only a foreign passport is needed and a personal presence.
It is also possible to buy real estate remotely, online. It is worth noting that Georgia was one of the first countries to transfer the Register of the Ministry of Justice (state apparatus) to the blockchain technology. This means that the ownership of the property can not be forged.
New prospects, such as buying real estate with cryptocurrency have also become available in Georgia and through the GEOLN marketplace, the procedures for purchasing real estate and paying for cryptocurrency are already successfully carried out.
Buying a house with bitcoins in Georgia
As for the cost of housing, and here the country has huge advantages.
For comparison: the cost of apartments in Germany starts from 3000 euros per square meter, in London from 10 000 pounds per meter, the cost of apartments on the Cote d'-Azur starts from 5000 euros per meter, in Greece on average 1000 euros, Spain-1200 euros. In Batumi, the average cost per square meter is 500-700 dollars (about 400-550 euros).
In the European real estate markets, there is a recession. Given the rapid growth of the market and rising prices in Georgia, the purchase of real estate today guarantees a high-income tomorrow. It should also be noted such an important fact that the repayment period is an average of four years, which is one of the best indicators in the world. For comparison: in Bulgaria-7-10 years, Spain-8-12 years, Israel-15-25 years.
Batumi is a landmark of tourist Georgia
The city of Batumi is a national project of Georgia, they are actively engaged in it and already today the first results are visible: the city has transformed, becoming a real tourist center.
The infrastructure is developing, another international airport is being built to the existing airport in Batumi. Transport accessibility is of great importance and this direction is not limited only to the airport – the Tbilisi-Batumi highway was built, the railway connection with all major cities of Georgia is fully functioning.
Every year the flow of tourists is growing, in 2017 2.5 million people visited Batumi, and this year, even more, are expected. It should be noted that this growth is observed not only in the summer. Batumi is visited both in winter and autumn, because the warm season lasts from May to October, and the mild subtropical climate allows you to come here all year round. In addition, Batumi is a major gaming center, the only one in the region, and it also attracts a huge number of tourists from Russia, Turkey, Armenia, Azerbaijan, the United Arab Emirates, and other countries.
The growth of tourists from the European Union is also very noticeable, moreover, the Netherlands is among the leaders in terms of the number of investments. If you plan to visit Batumi, pay attention to the list of places that are mandatory for tourists.
An excellent indicator of the attractiveness of Batumi is the fact that all major hotel chains have come here: Hilton, Sheraton, Kempinski, Radisson, and others.
All this allows us to say that the demand for real estate in Batumi will only grow, and now it is not only about buying real estate but also about renting. The current number of rooms does not cover the needs, and therefore we are talking about a great prospect in this segment.
At the end of the review of Georgia, we want to talk about the possibility of obtaining a residence permit. We spoke in detail about the procedure for obtaining a residence permit in Georgia to an investor earlier - a residence permit of Georgia through the acquisition of real estate.
Emigration, obtaining a residence permit in Georgia is possible in the following ways:
- the presence of Georgian roots
- family ties with a citizen of Georgia
- demanded specialty in the labor market of Georgia
- investments in the Georgian economy
In order to obtain a residence permit in Europe, for example, in Spain, it is necessary to invest 500 000 euros in the country's economy. In Georgia, it will only need to buy a property from 35 000 dollars! A residence permit allows you to obtain citizenship in the future, and it, in turn, gives many advantages, in particular, visa-free entry into the European Union - since March 28, 2017, it is valid for all citizens of Georgia. The residence permit itself entitles to simplified visas, more affordable medical care and a number of other benefits.
Summarizing the choice of Georgia as a country for investment, we highlight the following parameters that are important for existing investors from post-Soviet countries.
- Geography of the region. This is Georgia's strategic location as a bridge connecting European and Western markets with the huge potential of the Caspian and Central Asian regions. 4 existing seaports, an updated railway network, three international airports (and soon 4), a modern highway from the Eastern border of Georgia to the Black Sea provide an opportunity for rapid transit from Central Asia and China to Europe and Vice versa.
- Stimulating investments, reforms - simplified tax system, absence of corruption, quickness and transparency of transactions.
- Visa-free regime with 94 countries.
- Lack of language barrier, close mentality.
- Unique nature: 7 climatic zones, excellent environmental conditions
- Economic security (as confirmed by international treaties, in particular, the Association Agreement with the EU)
- The largest gambling center in the region
- The greatest opportunities for gastronomic and historical tourism: many monuments of Georgia are protected by UNESCO, and winemaking and cuisine are recognized as one of the best in the world
Program of a free visit to Georgia
We are rediscovering a country that is showing amazing growth rates and giving us completely new opportunities, both for life and for business.
If you want to combine business with pleasure, to buy real estate and see Georgia, we offer you a unique product from GEOLN.COM – a travel&invest tour.
Choose the property from the developer that you would like to see, add to the tour program. For you will be automatically formed either a group or individual program (at your request), which includes the inspection of the selected objects, a full program of recreation, excursions, visits to restaurants of national Georgian cuisine, transfer, and accommodation. Upon request, the team of GEOLN.COM will help you with the purchase of air tickets.
In case of purchase of real estate during the tour, any of the selected projects, the cost of the tour is deducted from the cost of apartments, purchased real estate and thus the visit to Georgia becomes absolutely free for you.
See you in Georgia,
the team of GEOLN.COM