Businesses the world over are scouting for locations from where they can run their operations without any hassle. High taxes serve as a big disincentive that can eat into the profits of enterprises. In a competitive business environment, any reduction in the profit margin can render a company and its products or services unviable. This is where free zones serve as the red carpets for businesses to invest, post profits, and stay competitive.
If one talks about the free zones existing in various parts of the globe, the ones in Georgia can take the cake. Let us first understand what a free zone is all about.
What is a free zone?
It is a strip of land within a country where the government allows several benefits to business enterprises. The objective is to draw them to the zone so that they set up their businesses and provide employment to the local populace. Besides, the free zone can generate revenue for both the companies and government. It establishes a country as a business friendly one and helps in improving the overall economic activity. A free zone has a low tax regime and several laws of the land, which are otherwise applicable elsewhere, do not apply here. The zone offers several incentives to facilitate exports like low customs duty etc.
How the free zones in Georgia help businesses?
Nestled between Asia and Europe, Georgia has become a favourite of global business. This stems from its business friendly environment, strategic location, skilled workforce, transparent laws, low tax regime, and attractive tourist destination among others. Georgia has free zones in three places – Poti, Tbilisi, and Hualing Kutaisi.
These three zones provide a host of advantages
- Streamlined registration for corporates of all hues – LLC, LP, or JSC
- Exemption from corporate tax
- Exemption from VAT on goods that are imported from outside for warehouses inside the zones
- Similar exemption from import and export duties
- No taxes charged for property or real estate
- No control on currency exchange
- Exemption from obtaining permits for certain industries
Poti free industrial zone: The free zone is located at the Black Sea Coast and is adjacent to the Poti Port. It is close to the airports at Kutaisi and Batumi. The free zone has several companies in the domain of manufacturing, trading and logistics, warehousing, financial services, consulting, and construction. The zone employs more than 10,000 employees and boasts of logistical parks and business centres.
Hualing Kutaisi free industrial zone: Covering an area of 36 hectares, this particular free zone in Georgia lies in an area that connects the other two free zones – Tbilisi and Poti. It is currently managed by the Chinese company, the Hualing Group, hence the prefix. The businesses operating here include metal construction, furniture, wood and stone processing among others.
Tbilisi free industrial zone: It is located in the capital city and is home to a skilled labour pool. It boasts of a robust infrastructure such as access to the international airport and city centre. The businesses invested in the zone belong to the manufacturing, import/export, services, consulting, and logistics sectors.
The three free zones in Georgia act as the magnet for global businesses thanks to a slew of incentives and other benefits. Should you want your business to leverage the advantages of these zones, engage the services of an experienced consulting company like Kaukapital.