Recently, many international indices have recorded a rising investment graph in Georgia. It points towards a progressive business environment in the country. Take for example, the parametres like ‘Index of Economic Freedom’, ‘Ease of Doing Business’, ‘Favourable Public Debt Situation’ and ‘Global Corruption Barometre’, show encouraging data that are inspiring people to make investments here. Let us take a look at the top reasons to invest in Georgia.
1. Market Access: Those who want to tap the market of CIS (Commonwealth of Independent States) countries could select Georgia as the base for their business. Georgia has signed FTAs or Free Trade Agreements with CIS countries of Uzbekistan, Kazakhstan, Ukraine, Turkmenistan, Moldova, Kyrgyzstan, Belarus and Turkmenistan. In addition to this, FTA is applicable with Armenia, Azerbaijan and Turkey. Investors can explore the benefits of the absence of import tariffs and customs duty in these free trading zones.
Apart from exploring the potential of free trading zones around Georgia, one can tap-in the favourable local market and target the 3.7 million residents as potential buyers. When it is about choosing a country for investment, political stability plays a crucial role.
2. Political Stability: Investment consulting firms are putting more emphasis on the comparatively stable political scenario of the country. After Georgia had signed the Association Agreement with European Union in the year 2014, one is better positioned to predict the investment climate and political stability. Open democratic political establishment respects important trade agreements signed by earlier governments. The country is committed to maintain economic liberalization as well as Euro-Atlantic integration. Together with these policies and prevention of corruption, the environment for business is rich with immense possibilities.
3. Lesser Corruption: From year 2003 onwards, World Bank has recognised the efforts put in by Georgia in fighting corruption. According to this global organisation, Georgia is one of the fastest reforming economies in the world. Transparency is promoted in the economy with the help of effective laws and anti-corruption legislations implemented by the government. In addition, there is free access to online registries which reduces interventions from red-tapism and has got recognitions from UN Public Service.
4. Lower Taxation Rates: Simple and fair taxation rules are encouraging people to setup business in Georgia. With only 6 flat taxes along with a 15% Corporate Profit Tax, (http://investingeorgia.org/en/georgia/taxation) the country is one of the least tax-burdened places where one can make investments. There are special regimes for favourable taxes. A 15% Corporate Profit Tax and absence of social security tax are big boosting factors for the growth of investment. The 6 flat taxes levied in Georgia are as follows:
i) Corporate Profit Tax-15%
ii) Personal Income Tax-20%
iii) Value Added Tax-18%
iv) Import Tax-0%, 5% or 12%
v) Excise Tax- On selected goods
vi) Property Tax- Up to 1%
Apart from property tax, every other taxation is national. Personal tax for income incurred from interest amount, dividend and royalty is 5%. There is no social security, payroll, capital gains or inheritance or wealth tax in Georgia. In addition to this, companies can utilise accelerated depreciation upon capital assets and carry forward loss for the purposes of corporate profit tax.
It is easier to do business with other countries while you set your company in Georgia. The country has signed Double Taxation Avoidance Treaties with 52 countries. There is no restriction on conversion of currency and repatriation of earned capital and profit.
5. Availability of Labour: Here in Georgia, high-skilled, young and educated labour force is available for affordable salaries. Average monthly salary of C-suite employees and blue and white collar professionals is USD 140. There is no regulation on minimum wage amount.
The Labour Code of Georgia is quite flexible. Out of 100, the Labour Freedom Index in Georgia is 75.7 (ranked 26th globally). Availability of affordable labour force encourages entrepreneurs to set up a company in Georgia. (http://investingeorgia.org/en/georgia/labor)