According to preliminary estimates of the statistical office of Georgia "Sakstat", announced in mid-March 2020, the volume of foreign direct investment in the country in 2019 increased by 0.2% compared to the previous year and amounted to $ 1.3 billion.
The country's economy has also been booming since the beginning of the year. Real economic growth in the first month of 2020 reached 5.1% compared to the same period last year. Overall, in the previous year, the Georgian economy grew by 5.2%, 0.7% exceeding the expected forecast.
Based on the recent events, it has become difficult to talk about the prospects of the global and national economies in the long term. Back in early March 2020, the government and the national Bank of the country voiced the expectation of annual economic growth at the level of 4.5%.
Just a few weeks later, the situation changed. Experts believe that the closure of borders will significantly affect budget revenues from tourism and export of goods, as well as the flow of foreign direct investment. But even taking into account the realities of today, the government of Georgia expects that the country's economy will be able to keep in a stable position and prevent a critical level of capital outflow from the country. And the international community will help Georgia in this.
Cooperation with the European Union
In 2014, Georgia signed an Association agreement with the European Union. This not only ensured the predictability of the political and investment climate in the country and gave Georgian companies access to European markets, but also provided strong support to the Georgian economy from the EU and the world community at the present time.
Recently it became known that the EU will contribute to the speedy allocation of more than €183 million to Georgia in order to provide the country with maximum financial support and mitigate the socio-economic consequences caused by the global pandemic. This assistance will come from the Asian development Bank, the Asian infrastructure investment Bank, the European Bank for reconstruction and development, the European investment Bank, the International Monetary Fund, the world Bank and a number of other international organizations.
All this funding is provided by Georgia's partners in the form of grants, not loans. This assistance will complement the support package that the EU announced at the end of March 2020. As a result, the total amount of financial assistance to Georgia from the European Union will exceed €250 million.
A portion of the €70 million will be used to support small and medium-sized enterprises, as well as self-employed entrepreneurs. This implies easy access to credit lines in local currency and grants to stimulate and restore business after the crisis. The funds will be provided through partner financial institutions and will be available during 2020. In addition, about €20 million in grants will be used to support farmers and individuals and will be used to acquire skills, develop their businesses or recover from the crisis.
Investment in Georgia
Thanks to this set of measures, despite the period of turbulence in the world economy, business activity in the country does not stop completely. Investments in Georgia continue to arouse interest among entrepreneurs, construction continues, and there is no decline in real estate prices.
This is facilitated by a favorable investment climate, which has been systematically formed in the country over the past decade and a half thanks to a competent state policy, as well as timely measures of situational response taken by the Georgian authorities. For more information about the successful fight against the pandemic in Georgia, see the special issue of the channel "World Citizen" https://www.youtube.com/watch?v=j3IfHV_WVCs
According to the global rating "Doing Business" from the world Bank, Georgia in 2019 ranked 7th in the world for ease of doing business – this is the 1st place among the countries of the European region and Central Asia. The same rating put Georgia on the 2nd place in the world in terms of ease of registering businesses and on the 16th place in terms of simplicity of the tax system. Experts say that the increase in investment in Georgia in 2019 is an indicator of the growth of business confidence in the government.
Georgia has a transparent and fair tax system with low rates. And tax increases are possible only by holding a national referendum – this is stipulated in the Constitution of Georgia.
In addition, Georgia is one of the few countries that have special tax regulations for certain types of business, such as the IT industry. In particular, a company registered in the virtual IT zone of Georgia is exempt from VAT, excise and customs duties. It also has a special benefit – profits received outside of Georgia are not taxed.
In addition, companies in Georgia can be registered remotely, and this opens new prospects for investors even in conditions of closed borders. We wrote about this in detail here
To protect the interests of non-resident foreign investors, Georgia has signed a double taxation Treaty with more than 50 countries around the world. It also refused to sign an international agreement on the implementation of a unified financial reporting standard and automatic exchange of financial information (CRS ). This means that Georgian banking institutions do not transfer their clients' financial data to any other countries or organizations.
Another special preference that an investor receives is the possibility of obtaining a residence permit and progressive Georgian citizenship for investment. To do this, it is enough to invest in the country's economy or buy real estate for at least 300,000 lari, which is equivalent to $100,000. Read more about the possibility of obtaining a residence permit and citizenship of Georgia for investment here
Investments in Batumi
Stable economic growth, business-friendly legislation, a liberal tax code, and a strong legal framework for investor protection provide a reliable platform for successful business in Georgia. One of the most promising and dynamically developing regions of the country is the main Black sea resort – Batumi. The city attracts a huge number of international investors every year.
What are the advantages of Batumi for the investor
• Transport and geographical accessibility.
• Huge popularity among tourists from all over the world.
• Reasonable prices for recreation and entertainment.
•Relatively low cost of real estate.
• Clean environment – fresh air, sea, mountains.
• The season lasts from May to October.
• Annual growth of tourist traffic by an average of 20%.
• There are 14 casinos with an annual attendance of over 1 million people.
• Numerous government programs for business development.
How to invest in Georgia
Today, people who are focused on success in any business prefer to seek help from professionals. Famous Swedish entrepreneur Johan Stael said :" If you think competence is expensive, try incompetence. It will cost you much more."
And experts of GEOLN.COM fully shares this opinion. Trying to start a business in a foreign country without knowing the market conditions, language, legislation, and numerous other local nuances is like walking around a busy city with your eyes closed. Without the help of professionals at least at the initial stages of implementation in the local market, it is impossible to become a successful and effective business player.
The largest real estate search engine site GEOLN.COM gives everyone the opportunity to get qualified advice, as well as any kind of assistance when planning and starting a business in Georgia or investing in local real estate. We will provide you with a step-by-step guide and support based on the vase of special products by GEOLN – GEO-ASK.
Single investor window
Our specialists provide information and consulting services and organizational assistance for all types of investment projects on the principle of a "single window". This is a convenient tool that allows you to promptly respond to investors' requests and provide legal support for any real estate transactions in Georgia.
We will help you solve the full range of issues, including:
- Individual selection of investment objects in accordance with the request.
- Interaction with authorities, justice, tax administration, etc.
- Assistance in obtaining all necessary approvals and permits.
- Operational organization of all additional negotiations, meetings.
- Assistance in choosing the form of ownership of the company, tax system, development of the Charter, and other documents.
- Interaction with translators and notaries to certify all documentation.
- State and tax registration of a company of any form of ownership, opening a Bank account.
- Trust management of your business, real estate administration.
All the above mentioned actions can be performed by us remotely, by proxy on behalf of the client. Read more about how to start a business in Georgia remotely using our company here
If you are planning to start a business in Georgia, please consult with GEOLN.COM . We will become your reliable partner and will be able to protect your interests at all stages of cooperation!