Georgia

Ease of Doing Business Rank: 16 

Overview 

 

Geographic location 

Georgia is a country located at the crossroads of Western Asia and Eastern Europe. Its boundaries are the Black Sea to the west, Russia to the north, and Turkey and Armenia to the South. 

Spoken language 

Georgian and Abkhazian are the official languages of Georgia. The majority of the population speaks Georgian with only about 100,000 speaking Abkhazian in the disputed territory of Abkhazia in the South Caucasus, on the eastern coast of the Black Sea. 

Russian is widely-spoken as a second language as Georgia was previously part of the Soviet Union. Starting in 2010, the government implemented measures to teach English in schools. 

Population 

The 2019 population is approximately 3.9 million. 

About a third of the population lives in the capital city of Tbilisi, followed by ImeretiThe remaining inhabitants live in various small cities and towns surrounding the two populated areas. 

Popular industries 

The top industries in Georgia are tourism, transport, communication, finance, constructionagricultural exporting of citrus fruits, tea and grapes, manganese and copper mining, and industrial exporting of wine, metals, machinery, chemicals and textiles. 

Education 

The Times Higher Education World Rankings ranked one Georgian university as 1,001 in the world. 

The Legatum Prosperity Index ranks Georgia’s education system 65th out of 149. 

Popular entity types 

The most common type of business entities in Georgia are sole proprietorship, joint venture, joint stock company, general partnershiplimited partnership and limited liability company. 

The most common business entity in Georgia is the limited liability company. 

Georgian incentives for business 

Georgia offers competitive taxes to entice foreign business. These include a 15% corporate tax and a property tax that does not exceed 1%. Import taxes range between 0% and 12%. 

Georgia does not charge payroll, social security, capital gains, wealth, and inheritance taxes. Excise duties only apply to specific products such as alcohol, tobacco, oil, gas, automobiles, and mobile communication services. 

Foreigners pay tax on their income derived from a Georgian source at a flat rate of 20% unless their net worth exceeds 3 million Georgian Lari (GEL). 

Georgia also has Free Industrial Zones (FIZs) and a special customs regime for companies that export goods outside the country. The FIZs are in Poti, Kutaisi, and Tbilisi. Companies in these areas benefit 0% tax on corporate income, import, and property as well as significantly reduced VAT rates. Permitted activities include manufacturing, trading, construction, financial, and consulting activities.  

Georgian companies producing export goods may also apply for a special Internal Processing Customs Regime license which permits import of raw materials without customs duties and VAT. 

History & Features 

 

Main cities for business 

Tbilisi is Georgia’s capital and largest city, and the business center of Georgia. 

Popular historical & tourist attractions 

Georgia is a country packed with medieval fortresses and monasteries and stunning landscapes including rolling hills, majestic mountains, deep caves and rocky beaches. 

A visit to the country starts with Tbilisi, the capital of Georgia since the 5th century. Narikala Fortress offers a panoramic view of the city and was once the location of a 13th century church before the Old Town burnt down. 

The Holy Trinity Cathedral of Tbilisi or Sameba is the largest Eastern Orthodox church in Georgia and one of the largest in the world. The Gelati Monastery is a masterpiece of the Golden Age of medieval Georgia founded in 1106.  

A small part of Georgia sits on the Black Sea coast too. This idyllic landscape is ideal for sunbathing, but it’s covered in stones. 

Gori Town was also the home of Joseph Stalin where you can see his statue in the main square. Gori Fortress or Uplistsikhe dates back to the Iron Age. 

Baku Riana and Pasanauri in the Caucasus Mountains offer world-class skiing without the exorbitant price tags of Switzerland and France. The Tusheti National Park offers breathtaking views of soaring peaks and picturesque grassy hills. 

The town of Borjomi offers volcanic hot springs nestled between the ridges of the Borjomi Gorge. Vardzia offers the remains of monolith churches, caves and shrines inhabited from at least the middle of the 12th century. 

Mtskheta, the former capital of Georgia, features some of the finest examples of medieval religious architecture in the Caucasus and it is a UNESCO World Heritage site. 

History 

Over the years, Georgia was the object of rivalry between Persia, Turkey and Russia. Eventually it was annexed by Russia in the 19th century. 

In 1936, Georgia became a separate Soviet republic. Under Soviet rule, the country was transformed from an agrarian to a largely industrial, urban society.  

Georgia proclaimed its independence from the USSR in 1991. However, the Soviets clamped down and jailed leaders. The Soviet Union’s foreign minister became president in 1992. 

Between 1992 and1993 Abkhazian and South Ossetia separatists in the South Caucasus engaged in armed conflicts attempting to break away.  

By 1994, Russia and Georgia had agreed to allow three military bases in Georgia and Russian army training in the area. They came to an agreement over the South Ossetia region; however the Abkhazia situation remained unresolved. In 1997, parliament voted to threaten Russian access to its military bases unless they extended their military control over Abkhazia. 

Georgia faced unemployment, poverty, and rampant political corruption. By 2002, tensions were very strained between Georgia and Russia and Russia’s power had weakened considerably. 

After several questionable elections, Georgians rebelled in 2003 when the existing leader was shown to have won again. He resigned and the opposition won a landslide victory. 

However, the new leader could not curb the unrest in Georgia’s two breakaway regions of South Ossetia and Abkhazia. 

By 2007, over 50,000 demonstrators demanded his resignation. The leader deployed riot police, declared a state of emergency, and narrowly won the election again 

In 2008, conflict arose again with South Ossetia and AbkhaziaRussia sent troops to support these pro-Russian areas. Eventually, Russia and Georgia signed a cease-fire agreement. Russia severed diplomatic ties with Georgia and officially recognized South Ossetia and Abkhazia as independent regions under Russian protection. 

After several leadership changes and ongoing corruption Georgians rebelled again. In 2009, tens of thousands of protestors demanded the current leader’s resignation. Instead, he made concessions and allowed residents to elect the first mayor of Tbilisi. 

Georgia and Russia reached a trade agreement in 2011. In 2012, the longstanding political party and leader lost the election. Constitutional change shifted governmental power from the president to a parliamentary republic. Georgia held its first presidential elections in 2013. 

Today, Georgia has a modern, stable economy. Nonetheless, political unrest remains in Abkhazia remains. Most countries consider it part of Georgia, but Abkhazia considers itself the Republic of Abkhazia and it is formally recognized by Russia and a handful of other nations. 

Other relevant facts 

According to a 2014 census, 83.4% of the Georgian population identified themselves as Eastern Orthodox Christian, 10.7% Muslim, 3.9% Armenian Apostolic, and 0.5% Catholic.  

The 2014 census reports 86.8% consider themselves Georgian, 6.3% Azerbaijani, 4.5% Armenian, and 0.7% Russian. Abkhazia and South Ossetia were not under government control and not included in the data. 

Additional Information for Business 

According to Forbes’ 2019 Best Countries for Business, Georgia is the 44th best country in the world for conducting business.  

The 2019 Index of Economic Freedom rates Georgia 16th globally and states, “The government hopes that further reductions in regulation, taxes, and corruption will attract foreign investment and stimulate growth.  

World Bank’s “Doing Business” rankings rate Georgia 6th for ease of doing business in the world. 

Georgia Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Georgia. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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