Georgia stands out as a popular investment destination, ranking 13th for investment among major global economies, including the US, China, and the UK, reads the report of the US Department of State, titled “2023 Investment Climate Statements: Georgia”.

“Georgia is open to foreign investment. Legislation establishes favorable conditions, but not preferential treatment, for foreign investment. The Law on Promotion and Guarantee of Investment Activity protects foreign investors from subsequent legislation that alters the condition of their investments for a period of ten years. Investment promotion authority is vested in the Investment Division of Enterprise Georgia, a legal entity of public law under the Ministry of Economic and Sustainable Development. The Investment Division’s primary role is to attract, promote, and develop foreign direct investment in Georgia. For this purpose, it acts as the moderator between foreign investors and the Georgian government, ensures access to updated information, provides a means of communication with government bodies, and serves as a “one-stop-shop” to support investors throughout the investment process (http://www.enterprisegeorgia.gov.ge/en/about). Enterprise Georgia also operates this website for foreign investors: www.investingeorgia.org.

Georgia’s Investors Council, an advisory body operating since 2015, aims to promote dialogue among the private business community, international organizations, donors, and the Georgian government for the development of a favorable, non-discriminatory, transparent, and fair business and investment climate in Georgia (http://ics.ge). The Business Ombudsman, who is a member of the Investors Council, is another resource for protecting investors’ rights in Georgia (http://businessombudsman.ge).

According to Bloomberg’s 2022 annual global Study of Foreign Direct Investment Flows, “Georgia stands out as a popular investment destination, ranking 13th for investment among major global economies, including the US, China, and the UK. The data shows that 70% of investors interested in Georgia are optimistic about the economy - significantly higher than the global average of 55% - which suggests a greater understanding among senior decision makers of the country’s investment opportunities. For investors interested in Georgia, key areas for investment include expanding into new markets, developing local supply chains and business support services, and building new commercial facilities and long-term infrastructure.

Georgia’s strategic location makes it a gateway for investors looking to secure supply chains between Europe and Asia. The Georgian government incentivizes IT and business services companies through cash-back policies for investments. IT companies can also enjoy an “International Company Status” tax code that reduces rates of personal income tax and profit tax to 5% each for exporters.

Banking is one of the fastest growing sectors in the Georgian economy. As of March 1, 2023, Georgia’s banking sector consists of 15 commercial banks, including 13 foreign-controlled banks, with 140 commercial bank branches and 794 service centers throughout the country. In January 2023, Georgian commercial banks held GEL 67.7 billion (around USD 26 billion) in total assets. The private sector Credit-to-GDP ratio declined from 67%, still quite high compared to regional peers. As of early 2023, there were 18 insurance companies and 35 microfinance (MFI) organizations operating in Georgia. The two largest Georgian banks are listed on the London Stock Exchange: TBC Bank (listed in 2014) and the Bank of Georgia (2006).

Following Russia’s full-scale invasion of Ukraine, the United States, EU, and United Kingdom imposed sanctions on several Russian banks, including the state-owned VTB bank, which has a subsidiary in Georgia. To adhere to the international sanctions, Georgia’s National Bank (NBG) banned VTB – Georgia bank from servicing individuals, borrowers, and depositories to make transactions in dollars, euros, and other foreign currencies. The bank was also restricted from conducting transactions in GEL through RTGS (Real Time Gross Settlement) system. NBG facilitated transfer of VTB Georgia’s borrowers and to two Georgia-based banks. Currently, VTB – Georgia is restricted from performing all types of operations except certain cash-based operations that are necessary for maintaining the administrative functioning of the bank and servicing some remaining clients, bringing its operations to a minimum level (pay-off existing loans and other obligations of the customers, withdrawal of the remaining funds by the customers).

Registering a business in Georgia is relatively quick and streamlined. Registration takes one day to complete through Georgia’s single window registration process. The National Agency of Public Registry (NAPR) ( www.napr.gov.ge – webpage is in Georgian only), located in Public Service Halls (PSH) under the Ministry of Justice of Georgia, carries out company registration. The PSH website (https://www.psh.gov.ge/https://www.psh.gov.ge/main/page/2/85) outlines procedures and requirements for business registration in English. For registration purposes, the law does not require a verification of the amount or existence of charter capital. A company is not required to complete a separate tax registration; the initial registration includes both the revenue service and national business registration. The following information is required to register a business in Georgia: bio data for the founder and principal officers, articles of incorporation, and the company’s area of business activity. Other required documents depend on the type of entity to be established.

To register a business, the potential owner must first pay the registration fee, register the company with the Entrepreneurial Register, and obtain an identification number and certificate of state and tax registration. Registration fees are GEL100 (around $30) for a regular registration and GEL200 (around $60) for an expedited registration, plus a GEL1 bank processing fee. The owner must also open a bank account (free).

Georgia’s business facilitation mechanism provides equitable treatment of women and men. There are a variety of state-run and donor-supported projects that aim to promote women entrepreneurs through specific training or other programs, including access to financing and business training”, - reads the report.