Over the past few years, free industrial zones in Georgia have been a promising destination for businessmen from the CIS and Europe. One of the factors of such interest is undoubtedly a loyal tax policy. In addition, foreign direct investment in Georgia's FIZs attracts a convenient location between Europe and Asia, direct access to sea routes, developed infrastructure, and low operating costs.
What kind of FIZ are there in Georgia?
In total there are 3 free industrial zones in Georgia. They are located in the two largest cities of the country - Tbilisi, Kutaisi, as well as in the port city of Poti.
Hualing Kutaisi Free Industrial Zone
Hualing FIZ is located in Kutaisi, the second-largest city in Georgia, on the territory of 36 hectares owned by the company. Hualing Kutaisi Free Industrial Zone is an important industrial and commercial center in the country. All transportation infrastructures are quite close: the international airport is 19 km away, the seaport of Poti is 95 km away and the autobahn connecting the company with Tbilisi.
Poti Free Industrial Zone
The company is located in Poti, which is a port city. The total area of Poti FIZ is 300 hectares. From its foundation in 2010 to the present day, Poti FIZ remains the largest in the country.A big plus of this area is the direct access to the railway, it is possible to unload cars without vehicles. In addition, Poti has the largest list of licenses and opportunities for investors.
Tbilisi Free Industrial Zone
The only FIZ in the capital city covers an area of 170,000 sq.m. It appeared in 2015 and consists of virtual office locations, and 28 industrial, free plots of land, which are designed to meet the requirements of tenant companies.
What tax rates are valid Free industrial zones in Georgia?
On the territory of free economic zones of Georgia 2 main taxes are levied. The first one is the revenue tax on sales of goods/services to residents of Georgia, which is 4%. The second tax is the income tax - on a salary of 20%. At the same time, if the salary is paid to non-residents - income tax is paid by the company if citizens of Georgia pay income tax, and pension contribution is paid by the employee himself. Also, the company has an obligation to pay tax at source after buying services from non-residents of Georgia, and if the supplier country has an agreement with Georgia on avoidance of double taxation - no tax is paid.
All other taxes such as income tax, dividend distribution tax (unlimited, during the year), VAT, the import tax on raw materials or finished products from a foreign country to FIZ, the export tax on raw materials or finished products from FIZ to foreign countries and property tax is - 0%.
What types of activities can be implemented in FIZ?
- The location of Georgia is perfect for international trade, so export and import is one of the most important directions for FIZ;
- It is possible to manufacture and process products. It will receive the certificate 'Made in Georgia' and it can be imported through a duty free system. It is important to know that only countries that have signed a free trade agreement with Georgia can be imported;
- It is possible to provide services especially in IT technologies and consulting.