Free International Zone were designed to ease the international trading, allowing companies from all over the world to use these zones for their international exchanges and services. End of the year 2019, then in 2020 thing have change as banks in Georgia stopped to support financial transactions coming and going to these zones. Except if your business perfoms Impor-Export activities you will not be able to open a bank account for your company registered in FIZ.
FIZs are from Juridical point of view still available in Georgia, but are obsolete due to the lack of bank support, except if you can run your business without bank account.
In fact, Georgia was becoming an increasingly recognized jurisdiction for Import-Export investments and activities with the countries of the Commonwealth of Independent States (CIS), EU countries and China. This attractiveness was due to the absence of strict currency control rules and the presence of liberal trade regimes with all these countries but also with many others.
The absence of corruption, transparency in business management, association agreements with the EU, the introduction of a visa-free regime with the EU, low taxes and tax rates, a very short list of licences and permits, very simple administrative procedures, are among the advantages you had by setting up a Free Zone company in Georgia.
Georgian Free Industrial Zones or (FIZs) are regulated by the Georgian Law on Industrial Free Zones. A very flexible and complete legislation that aims to promote economic growth and attract foreign direct investment. The industrial free zones are therefore designed to create an ultra-favourable tax and customs, legal and administrative environment for companies in order to greatly increase their competitiveness on world markets.
A Free Zone company is a company domiciled in one of the 4 free industrial zones of Georgia. It allows:
Advantages for a Georgian Free Zone Company
- 0% corporate tax
- 0% dividend tax
- 0% income tax
- 0% property tax
- 0% V.A.T.
- 0% foreign income tax
- Foreigners can be 100% owner of their company
- Repatriation of 100% of capital and profits
- Open a corporate bank account easily
- No Automatic Exchange Of Information
- No account monitoring, no audit is required
- No minimum capital is required
- No minimum investment is required
- Very attractive price for license and permit
- No exchange controls within an FIZ.
- No trade barriers or quotas on imports and exports
- A simple and fast customs import and export procedure
- 0% taxe on import and export goods, raw materials, equipment and machinery, prefabricated and manufactured products
- No restrictions on the employment of foreigner
- low labor cost
A company that produces goods for export in the free zone is therefore exempt from all taxes. With the exception of personal income tax (20%), which is paid on employees' salaries.
If a company imports products from the Free Industrial Zone to another territory of Georgia, in addition to the tax on employees' income, it must pay 4% VAT on the income from sales made on Georgian territory.
It is also human capital and benefits:
- There is no regulation on a minimum wage
- There are no unions
- There are no social contributions
- A liberal labour code and a high degree of flexibility in "employee-employer" relations
- An important resource for Young Skilled Workers
A simple and fast procedure
The company registration is done in 2 days. No Audit is required. Opening the company's bank account is quick and easy, within one working day after the company's registration on the FIZ.
These free zones have other operational advantages
- They offer equipped business districts and high-performance communication infrastructures. But also efficient cargo handling services, customs brokerage, administrative services, in particular issuing the certificate of origin very quickly. It is also worth mentioning the low cost of power in Georgia.
- For many companies, the opening of an office in one of Georgia's free zones is an interesting prospect. Georgia is becoming a key country linking the European and Asian markets.
- It is a strategic location for companies. Georgia is an excellent logistics centre (major Black Sea ports, railways and modern roads), at the heart of the new Silk Road and the major "One Belt One Road" programme, which will link the European market directly to the Chinese market within the next ten years. An ideal location for business expansion into the Caucasus, EU, CIS, Central Asia and Middle East markets with a market of nearly one billion consumers.
- A free trade regime with the CIS countries and Turkey.
- A deep and comprehensive Free Trade Agreement with the EU for manufacturing and processing industries.
- Free trade regime with EFTA (Switzerland, Liechtenstein, Iceland, Norway).
- Preferential trade (GSP with the United States, Canada and Japan).
- Georgia has also concluded 52 double taxation treaties with many countries such as Germany, China, UK, Singapore, Ireland among many others.....
A free zone company is limited to these types of activities
- Manufacturing industries (imports raw materials, manufactures, processes, packages and exports finished products)
- General business activities (allows you to buy, sell, import, distribute and store items specified in your license)
- Development and IT services (e.g. e-commerce)
- Consulting and other professional management, legal and accounting services....
- Financial and banking services. Since June 2018, Georgia daes not grant this type of licence in a FIZ.
- Logistics services
Each license has a cost depending on its type of activity. It is renewed annually.
- Advice on the choice of the Free Zone
- Administrative procedures for the creation and registration of the company domiciled in the Free Zone. Please note that you are not obliged to travel to Georgia. A Power of Attorney issued to the legal representative of your choice is enough to carry out all the procedures.
- Opening of the comporate bank account.
- Accompaniment and/or representation at all government appointments.
- A dedicated trilingual French Advisor for all procedures (French / English / Russian).
- Get a resident visa for the company's founder, his family, and employees
- Become a tax resident in Georgia if you wish
- Introduction and appointment scheduling for additional services (Real Estate, School, Health and others...).
- Practical advice.