Free Zones in Georgia

Georgia, a gateway between Europe and Asia is a compelling jurisdiction, which offers competitive business advantages to start-ups and established enterprises. In order to maintain economic growth, enhance industrial competitiveness, and attract foreign investment, the Georgian government adopted a law providing for the establishment of four free industrial zones in strategic locations, namely, the sea port Poti, capital city Tbilisi, and the third largest city Kutaisi. The free industrial zones provide cost-effective manufacturing possibilities, favorable business environment, and easy access to international markets.

Businesses operating within Georgian free industrial zones can enjoy not only rapid and straightforward incorporation procedures, but also tax-free trade opportunities. More specifically, the companies are not subject to import and export duties, corporate profit tax, dividends, VAT, and property taxes. The only tax levied on companies within free industrial zones is a 4% import/export duty on the transactions between free industrial zones and mainland Georgia. Georgian legislation does not impose restrictions regarding foreign ownership of companies. Therefore, any legal and natural person,resident or foreigner, is allowed to register a company in the country.

  1. Poti free industrial zone (Poti FIZ)

Poti FIZ was founded by the UAE RAK Investment Authority in 2011. The zone comprises territory of 3 million sq. meters where it accommodates businesses from diverse industrial and logistics segments, including steel, chemical, and processing industries. Since Poti FIZ is located in the port area, the access to the zone is available through a seaport as well as railway and road networks. The financial and operational advantages for companies operating within Poti FIZ include exemption from corporate taxation, low labor costs (the average salary in Georgia is about EUR 350 as for 2016), low energy and cargo costs, simplified customs procedures, free trade opportunities, and a quick business set-up procedure.

  1. Kutaisi free industrial zones

There are two free industrial zones in Kutaisi, namely, Kutaisi free industrial zone (Kutaisi FIZ) and (2) Hualing free industrial zone (Hualing FIZ).

2.1 Kutaisi FIZ was established in 2009 as the first tax-free territory in the second largest Georgian city Kutaisi. The zone specializes in manufacturing home appliances. At present, the Kutaisi FIZ is at the development and infrastructure renovation stage, which will allow it to function as a large multi-profile industrial center.

The major incentives for enterprises in Kutaisi FIZ include: (1) exemptions from profit and property taxes, VAT, and customs duties; (2) no foreign exchange control, trade barriers, and quotas; (3) no restrictions on capital repatriation; and (4) favorable tax treatment of employees working in Kutaisi FIZ companies.

2.2 HualingFIZ operates since 2015. At present, the FIZ specializes in wood and stone processing, metal construction, and furniture and mattresses production. The well-developed transport infrastructure allows logistics to and from the zone by sea, rail, road, and air.In addition to logistics advantages, Hualing FIZ companies can enjoy operational benefits (e.g., a tax-free environment and preferential trade agreements), cost-effective production possibilities (e.g., ready-made buildings, low utilities costs, and simplified customs procedures), and human resources advantages (e.g., cheap labor costs, no minimum wage requirement, and no external monitoring).

  1. Tbilisi free zone (TFZ).

The TFZ is a developed free industrial zone in Georgia located in the premises of the capital city. The territory of the TFZ is divided into 28 individual plots that can be leased individually or collectively for up to 50 years. The zone also offers ready-made office spaces, warehouses, and land plots. In addition to tax-free environment, the operational advantages offered by the TFZ also include access to the largest Georgian labor pool in Tbilisi, low rental costs, reliable infrastructure, and facility management services. TFZ administration issues a variety of business licenses (e.g., licenses for consulting services, manufacturing, and trading). The types of business structures permitted in the TFZ include individual entrepreneurs, limited liability companies, branch offices, limited and general partnerships, and joint stock companies. The TFZ guarantees a rapid business start up procedure. The application for registering a company is usually processed within 1 business day.

Download Our Free Ebook

read our fiscal books

Ask Us Anything

If you want a legal creative sharp tax advice, if you have a remark, an idea… if you want to check a loophole, or you want a second opinion, a company… a bank account or you just want to chat…