Georgia – A Pleasure Doing Business

Mar 26, 2021 Latest News

Georgia, which sits in the foothills of the Greater Caucasus mountains, between the Black and Caspian Seas, is a country with great history and rich culture. Georgia is best known to the rest of the world for its great wines, artist, and rugby team.

Although lesser-known, Georgia is one of the best places to do business in the world. Over the last two decades, the country has become synonymous with successful reforms and rapid development. By eliminating a large part of bureaucracy and implementing business-friendly policies, Georgia was recognized by international organizations and was even hailed as a “top reformer”. As a result, a small country on the crossroads of Europe and Asia is fast becoming a regional hub for business.

Being a business-friendly country is also reflected in low operational costs. Today, the country holds some of the lowest utility costs in Europe, competitive salaries, and one of the lowest taxes, which make Georgia one of the most cost-effective locations in Europe and the wider region. Over 75% of electricity is generated from hydro and wind, making electricity not only cheap but also green. Since 2017, corporate profit tax on reinvested profit is 0% and social security contribution is only 2%. Georgia’s stripped-down and streamlined tax scheme has produced the 3^rdlowest overall tax rate in the world according to World Bank Group. Paying taxes is simple and transparent. Companies pay taxes online, through commercial banks, minimizing procedures and bureaucracy. Furthermore, the country has four free industrial zones, offering additional tax incentives.

Taxation is just one of many examples of ease of doing business. In fact, one of the first thing that you notice while getting started in Georgia is how simple and transparent everything is. Georgia ranks 7th in the Ease of Doing Business index by World Bank 2020. This is not just a ranking, but rather something you can feel. For example, starting a business or registering a property takes only hours and can be done by visiting a single location. The same easiness and simplicity can be experienced while dealing with any government organization. Getting permits or licenses or dealing with customs, everything is transparent, fair, and most importantly, does not take much time.

The fact that Georgia ranks 1^st in terms of - least need to interact with government while doing business - according to Trace International Matrix 2020, is one more proof of the low bureaucracy and pro-business environment that Georgia has created.

Hospitality and Real Estate companies in Georgia find that transport and communications networks, legal, political and regulatory frameworks, alongside a diverse pool of skilled labor create a lucrative and exceptional business environment for the sector.

Distinguished with its biodiversity, Georgia boasts rich natural and cultural resources and is home to more than 12,000 historical and cultural monuments, four of which are included in the list of UNESCO World Heritage Sites. Georgia has something for everyone, the mountains, the sea, ancient cities, protected areas, more than 500 varieties of unique wines, and one of the best cuisines in the world. Anyone, either with family or on their own can find their type of activity, be it hiking, skiing, sunbathing on the beach, or raving until early morning, Georgia will leave you wanting more, and fortunately, you can find that more in Georgia again.

Though pandemic has left its mark on the sector, prior performance has been nothing short of remarkable. Sometimes characterize culture as a choice between old and new, between classical or pop, great heritage or modern art. Nevertheless, in Georgia it is not one or the other, it is both. Over recent years, Georgia has seen a dynamic growth of international visitors.

Georgia received only 2 million international visitors in 2010, but in 2019, the number of visitors reached a record high of 9.4 million (7.8 % y/y growth). Taking into consideration the fact that the population of Georgia is only 3.7 million people, it is clear that the country is quickly becoming a very popular touristic destination. Due to the high demand and occupancy rates, the number of international brand hotels is rapidly growing in Georgia. The average duration of stay of international travelers in 2019 was 6.2 nights and average spending per day above USD 641, and since the share of visitors from higher spending countries increases, average spending is expected to continue rising.

The number of visits from EU countries increased by around 22% in 2019. During the years 2012-2019 occupancy rate for all types of hotels has been approximately 65%. Growth of key performance indicators, such as Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR), and hotel occupancy rates confirm the attractiveness of investment opportunities in the hospitality and real estate sector of Georgia. An unprecedented occupancy rate of 77% was observed in Tbilisi during the August month of 2019.

Georgia offers considerable potential to develop beach resorts, medical and wellness destinations, winter-ski resorts, and four-season destinations. To further support the growth of the sector, the Georgian Government introduced a new incentive program for the hotel industry development in the regions of Georgia. New instruments include co-financing of interest rate for new projects, franchise/management contracts, and consulting services.

For Companies looking to find a place with great access, talented people, cost competitiveness, ease of doing business, or maybe all of the above; Georgia is the right place.

We would like to invite you to Georgia, since seeing with your eyes will make you a believer Georgia is truly a place where it is a pleasure doing business.