Surrounded by mountains, Georgia has become a secret less and less well kept. Over the past decade or so, Georgia has undergone an astounding and remarkable transformation. Initiating a series of profound reforms of its economy, hailed by the World Bank as the first economic reforming country in the world, this former Soviet Union republic went from a near failing state in 2003 to an increasingly well performing market economy in 2018.
Georgia, which supports this continuous effort to get closer to the Western way of doing business, has become over the years a dynamic destination for foreign investors and entrepreneurs with business projects of all types. Foreign Direct Investment in Georgia grew by $403.30 million in the first quarter of 2017, while between 2005 and 2016 it averaged $306.82 million per year.
In this small piece of land with magnificent landscapes ideally located in a strategic commercial zone at the crossroads of trade between East and West, between Europe, Asia and the Middle East, a whole Business Friendly environment has been created in recent years.
In the global ranking of the World Bank's Ease Doing Business 2018 index, Georgia ranks 9th, ahead of Switzerland, Holland or Germany. Fourth for ease in starting a business, fourth for ease in registering a property, twelfth for access to a loan, and second for investor protection. Not bad, for a country still "almost" unknown by half the mortals.
A member of the Council of Europe, Georgia is therefore today a country with a very liberal policy, which has reduced to a minimum its administrative formalities, its import and export rights, and which benefits from modern infrastructures which are developing in particular through the gigantic One Belt One Road programme which is to link the European market to the Asian and Chinese markets by 2024, giving Georgia direct access to a market of nearly a billion people.
The European Union and Georgia enjoy very strong and positive relations. The EU-Georgia Association Agreement entered into force in may 2016 and aims at political association and economic integration between the EU and Georgia. The EU and Georgia have also concluded a deep and comprehensive free trade area (DCFTA) which entered into force in May 2018, while Georgian citizens have been visa free in the Schengen area since 28 March 2017. The EU is also its main trading partner, with a 31% share in Georgia's total trade (27% before the entry into force of the DCFTA), followed by Canada (15%) and Turkey (13%), Russia (7%), China (6%) and Azerbaijan ( 5%).
Georgia is one of the most open countries in the world. As Europeans (like many other non-EU nationals), we have the right to reside, work and invest in Georgia for a period of one year without visa or residence permit. This is unique in the world and shows Georgia's progressive immigration policy. The simple fact of creating an economic activity in Georgia gives the right to have a residence permit renewable every year, very easily.
And icing on the cake, the country has become the few past years an increasingly popular tourist destination. The landscapes of Jason's former Colchid and the Golden Fleece are fan-tas-tics! Georgian gastronomy, wine and hospitality are not legendary. Georgia, a shining example of strength and resilience, has once again become this jewel, as witnessed by its flourishing artistic scene which reminds us that it was an important cultural pole until the beginning of the 20th century. The number of tourists visiting Georgia has doubled compared to just four years ago. And this sector is still growing and will break new frequentation records in 2018.
Another advantage of this business friendly universe, and not the least, is its tax system. He's very interesting! Whether for companies or individuals. According to the World Economic Forum's Global Competitiveness Report, Georgia is the ninth lowest taxed economy in the world. Here is a very quick overview of this so light, light, light taxation... A company in Georgia is subject to corporate income tax at 15% on profits and 0% if they are reinvested. Interest, dividends and royalties are subject to a 5% tax. The property tax is progressive and cannot exceed 1% of the value of fixed assets, investment properties and buildings in progress.
There is no capital tax, no stamp duty, no inheritance tax and no wealth tax. The VAT is 18%.
There are no employer contributions or social security contributions on salaries. For individual income, the tax rate is 20% and that's it! On real estate, rental income such as the sale of a property is also subject to a reduced tax rate of 5%. The real estate market in Georgia is very dynamic, its prices very affordable and its profitability strong.
This small piece of land with exceptional nature is not far from being a small paradise, in any case it is a very attractive destination, for its art of living most pleasant or doing business or both. The cost of living is considerably low like its labour force, thanks to its free movement of people and capital, Georgia is today considered as a country very friendly to entrepreneurs because of an extremely low tax burden and by the ease to start a business there. The country is also well known for its modern, effective, transparent and secure banking system. Such a business climate is attracting more and more foreign capital to this small paradise.
Georgia is a country with a booming economy that offers many advantages for working, diversifying its finances or residing.