Table of content
Introduction
Imagine a place where you can set up a business quickly, enjoy low taxes, and operate in a safe, stable environment. Welcome to Georgia—the country, not the U.S. state.
As more investors look to this growing market, one big question remains: Is Georgia really a safe place for business? This comprehensive guide from Gegidze unpacks the facts, addressing key aspects of safety, economic stability, and the overall business environment in Georgia.
Economic Stability and Business Environment
Is Georgia a Safe Country for Business?
Georgia's economic stability is reflected in its consistent GDP growth, averaging around 5% annually. The country boasts a liberal and free-market-oriented economic policy, low levels of corruption, and a competitive workforce. These factors, coupled with a strategic geographic location, make Georgia a secure and attractive environment for business.
Is Georgia Business Friendly?
Georgia ranks highly on the World Bank's Ease of Doing Business index, positioning it among the top 10 economies globally. The simplified administrative procedures, low tax rates, and minimal bureaucracy contribute to a business-friendly climate. Georgia's company register process is straightforward, and the country has established a strong legal framework to support business operations.
Business Structures in Georgia
According to the “Law of Georgia on Entrepreneurs,” enterprises can establish the following organizational and legal forms in Georgia:
Limited Liability Company (LLC): Investors usually choose an LLC business structure because of its flexibility and limited liability protection.
Individual Enterprise (IE): An IE is an individual engaged in economic activities. The individual is personally liable for the business’s obligations and fulfills rights and duties as an individual.
Joint Stock Company (JSC): A JSC is suitable for larger enterprises with shareholders, offering the ability to raise capital through stock issuance.
Limited Partnership (LP): An LP consists of one or more general partners with unlimited liability and one or more limited partners whose liability is restricted to their investment.
General Partnership (GP): A GP involves two or more partners who share unlimited liability for the business's obligations.
Branch Office (BO): A BO allows foreign companies to operate in Georgia without establishing a separate legal entity.
Cooperative (CO): A CO is a member-owned business entity focused on mutual benefits for its members.
Open for Business: Georgia Welcomes Foreign Investment
Georgia does not impose restrictions on foreign ownership or corporate governance of legal entities, with few exceptions. Companies must have charter capital, but the legislation does not specify a minimum amount. There are also no limitations on the number of directors or founders a company can have.
Business Registration Process in Georgia
The National Agency of Public Registry (NAPR) handles the registration of all types of legal entities. The registration process is efficient, with same-day service for a fee of 200 GEL, or next-business-day service for 100 GEL.
Documents Required for LLC Registration
To register a Limited Liability Company (LLC) in Georgia, you need to submit the following documents:
Application for registration
Charter of the company
Partner resolution on incorporation of the company/branch, including appointing the director
Passport copies of the company’s director and founders (if the founder is an individual)
Director’s consent to be appointed as the director of the company
Document confirming the consent of the owner on using its property as the company’s legal address
Document confirming the founder’s registration in a foreign country and the authority of its representative individuals (if the founder is a foreign company)
All documents issued outside Georgia must be notarized, apostilled or legalized, translated into Georgian, and notarized again.
Registration of Individual Enterprise (IE)
For registering as an Individual Enterprise (IE), the interested person must submit:
ID card
Application for registration
Georgia Country Holidays
Understanding local holidays is crucial for planning business activities efficiently. Georgia celebrates various national holidays that may impact business operations.
Celebrating Georgia's Rich Culture: National Holidays
The number of holidays in Georgia reflects its rich culture and history, including both secular and religious festivals. There are 16 official holidays established by the Labour Code of Georgia, during which most businesses and government offices are closed. Here’s a list of these holidays and their significance:
January 1 and 2 – New Year holidays: Celebrating the start of the New Year.
January 7 – Christmas: Observed according to the Julian calendar.
January 19 – Epiphany: The Baptism of Jesus Christ.
March 3 – Mother’s Day: Honoring mothers and motherhood.
March 8 – International Women’s Day: Celebrating women’s achievements and promoting gender equality.
April 9 – Day of National Unity: Commemorating the adoption of the Act of Restoring Independence of Georgia and honoring those who died for national integrity.
Easter holidays: Good Friday, Holy Saturday, Easter Sunday, Easter Monday (dates vary each year, celebrated according to the Julian calendar).
May 9 – Victory Day over Fascism: Marking the end of World War II in Europe.
May 12 – Day of Georgia as the Abode of the Holy Mother; Commemoration Day of St. Andrew the Apostle; Day of Hope: Honoring St. Andrew, the founder of the Apostolic Church of Georgia.
May 26 – Independence Day of Georgia: Celebrating the declaration of independence from the Soviet Union.
August 28 – Mariamoba: The Assumption of the Virgin Mary.
October 14 – Mtskhetoba (Svetitskhovloba): Celebrating the Robe of Jesus holiday.
November 23 – St. George’s Day: Honoring St. George, the patron saint of Georgia.
Banking and Financial System
The banking and financial system in Georgia is robust and well-regulated, providing a secure environment for businesses. The Georgian Lari (GEL) is the sole legal tender for payments within the country, with exceptions for export-import operations and free industrial zones.
The Role of the National Bank of Georgia (NBG)
The National Bank of Georgia (NBG) sets monetary policy, issues licenses, and supervises banking institutions and currency exchange offices. Commercial banks in Georgia must be licensed by the NBG, with a minimum statutory capital requirement of 12 million GEL. Banks are required to operate as Joint Stock Companies and adhere to International Financial Reporting Standards (IFRS).
Major Banks in Georgia
Georgia is home to several prominent banks, with the three largest being:
These banks have established correspondent banking relationships with international institutions, such as Citibank, and are included in the London Stock Exchange's top 250 largest companies list. Their shares are actively traded on the London Stock Exchange.
Is Georgia Safe for Foreigners to Open Bank Accounts?
For foreigners, opening a bank account in Georgia is remarkably simple and quick, typically taking about 30 minutes. Accounts can be opened for newly registered entities immediately after obtaining a unique identification number. Here’s what you need to know:
Required Documents: International passport and filled-out forms.
Language Assistance: While English is fairly commonly spoken, it’s recommended to bring a translator or request an English-speaking banker.
Remote Setup: Accounts can be opened remotely through a Power of Attorney (POA) [here is a guide on How to Open a Bank Account Remotely.
Benefits of Georgian Bank Accounts
Unlike many international accounts for foreigners, Georgian banks do not require a minimum deposit to open an account. Operating fees are low, and the specific amount depends on the chosen bank and service level. Here are some key benefits:
Debit Cards: Issued for a small fee (around 70 GEL), usable worldwide.
Currency Options: Accounts can handle GEL, USD, and EUR, maintaining funds in their original currency until conversion is needed.
Mobile and Internet Banking: All major banks offer these services, allowing you to manage your funds from anywhere.
Swift Transactions and International Standards
All Georgian bank accounts use the international IBAN format, simplifying fund transfers and ensuring quick transactions, typically within one working day. The system’s efficiency makes Georgia an attractive destination for businesses needing reliable and fast banking services.
The Georgian Stock Exchange (GSE)
The Georgian Stock Exchange (GSE), established with USAID and Barents Group's support, is the country’s only organized securities market. It facilitates the trading of thousands of securities, both on the GSE floor and remotely.
Political Landscape in Georgia for Businesses in 2024
Georgia's political climate in 2024 offers strategic advantages that make Georgia an attractive business environment.
Opportunities
EU Integration: Georgia is making progress toward EU membership, focusing on judicial reforms and reducing oligarchic influences. Success in these areas could enhance Georgia's reputation as a stable and reliable business environment.
Strategic Importance: Positioned at the crossroads of Europe and Asia, Georgia serves as a vital trade and energy corridor. This strategic location, especially amid the Ukraine conflict, underscores Georgia's role in regional stability and economic development.
Economic Potential: Georgia offers a relatively open market economy with favorable conditions for foreign investment. The government’s efforts to improve the business climate, coupled with strategic trade agreements, provide a solid foundation for economic growth and business expansion.
Is Georgia Safe for Foreigners and Investors?
Political stability is a cornerstone of Georgia's appeal to foreign investors. The government’s consistent efforts to align with European values and improve its global image have fostered a stable and secure environment for businesses. This stability is crucial for long-term investments and business operations.
Infrastructure Development
Development and Investment in Georgia
Georgia's investment in infrastructure projects like the East-West Highway and expansions of ports in Batumi and Poti enhances its connectivity and logistics capabilities. The Tbilisi Free Zone offers additional incentives, making Georgia even more appealing for businesses looking to expand their operations.
Roads & Highways
Georgia’s extensive and continually expanding road network is a cornerstone of its infrastructure, crucial for economic growth and business operations. With over 1,603 kilometers of international roads and more than 5,300 kilometers of national roads, connectivity is seamless across the country. Notably, the construction of a new highway through Likhi Range, featuring 96 bridges and 53 tunnels, is set to revolutionize transportation efficiency. This ambitious project, divided into sections like Chumateleti-Khevi, Khevi-Ubisa, Ubisa-Shorapani, and Shorapani-Argveta, demonstrates Georgia’s commitment to improving infrastructure and boosting regional connectivity.
Railroads
Georgia’s rail network is a vital link for freight and passenger transportation, serving as a strategic corridor between Europe and Asia. Spanning 1,326 kilometers, the Georgian Railway can handle approximately 30 million tons of cargo annually. The Baku-Tbilisi-Kars railroad mainline, launched in 2007, reconnects the historic Silk Road, linking Georgian and Azerbaijani railways to Turkey. This project includes the Marabda-Kartsakhi railway section, enhancing regional trade routes. The first train from Turkey to China on this line started operating in December 2021, underscoring Georgia’s pivotal role in global logistics.
Seaports
Georgia’s maritime infrastructure is anchored by two major seaports and two oil terminals. The Batumi seaport, with its five terminals and 11 berths, and the Poti seaport, the largest in Georgia with 15 berths, are central to the country’s trade operations. Poti is undergoing significant development to create a deep-water port, aiming to double its container capacity to over 1 million TEU. The Kulevi Oil Terminal and the Baku-Supsa pipeline enhance Georgia’s position as a crucial oil transit hub, supporting its strategic importance in energy logistics.
Airports
Georgia’s air connectivity is robust, with three international airports: Tbilisi, Kutaisi, and Batumi, as well as several regional airports. Tbilisi International Airport, the main gateway, has seen a dramatic increase in passenger numbers, from 1 million in 2010 to nearly 4 million. Kutaisi International Airport, known for its low-cost flights to Europe, and Batumi International Airport have both expanded to handle growing passenger traffic. These airports are vital for enhancing Georgia’s connectivity, supporting tourism, and facilitating business travel.
Pipelines
Georgia is strategically positioned with major oil pipelines like the Baku-Tbilisi-Ceyhan (BTC) and the Western Route Export Pipeline (WREP). The BTC pipeline, one of the world’s longest, transports oil from the Caspian Sea to Turkey. The South Caucasus Pipeline (SCP), running parallel to BTC, transports gas, significantly enhancing Georgia’s energy security. Recent expansions have tripled the gas volumes transported through the SCP, reinforcing Georgia’s strategic role in regional energy markets.
Transmission Lines
Georgia’s power transmission network is extensive, connecting with neighboring countries through robust cross-border links. With 11,297 kilometers of transmission lines and 94 substations, the network ensures stable power supply and regional connectivity. Plans to expand this infrastructure include adding 1,700 kilometers of new lines and upgrading cross-border capacity to 5,000 MW, bolstering Georgia’s role as a regional energy hub.
What Should Business Travelers Watch Out For in Georgia?
While Georgia is generally safe, business travelers should remain vigilant against potential scams, particularly in taxis and bars. Using taxi apps and checking reviews on platforms like Google or TripAdvisor can help avoid overcharging.
Navigating Tbilisi's Nightlife: A Guide for Tourists
Tbilisi, the capital of Georgia, boasts a vibrant nightlife scene filled with trendy bars, lively clubs, and a variety of entertainment options. From rooftop terraces with stunning views to cozy live music venues, there's something for everyone to enjoy. However, as a tourist, it's important to be aware of your surroundings and take precautions to ensure a safe and enjoyable experience.
Staying Safe While Having Fun:
Research Bar Prices: Prices can vary at different establishments. Before heading out, check online menus or reviews on platforms like Google or Tripadvisor to get an idea of standard pricing.
Beware of Overcharging: Although rare, some places might overcharge tourists. Always review your bill carefully and ask questions if prices seem unusually high.
Go with a Group: Exploring Tbilisi's nightlife with friends or fellow travelers is a fun and safer way to experience the city's vibrant after-dark scene.
Transportation Risks in Georgia
When traveling in Georgia, it’s important to take standard precautions to ensure your safety, Here are some key considerations for navigating transport in the country:
General Safety Tips
Street lighting away from main roads can be poor, and pavements may be uneven. There can be occasional short power cuts, so consider carrying a torch to navigate safely at night.
Taxis in Georgia
The safety and provision of taxis have improved significantly in Georgia. Here are some tips to stay safe while using taxis:
Do Not Flag Taxis on the Street: To avoid potential scams or safety issues, it's better not to flag taxis on the street.
Pre-Book Taxis: Use reputable ride-hailing apps like Bolt or Yandex.Taxi to book your rides. These apps offer transparent pricing and tracking features.
Check for Seatbelts: Ensure the taxi has working seatbelts before starting your journey.
Road Travel in Georgia
If you plan to drive in Georgia, here’s what you need to know:
Driving Permits: You can drive in Georgia with an international driving license for up to one year from the date of entry. For longer stays, you need a 1949 or 1968 international driving permit (IDP) or a Georgian driving license.
Car Hire Requirements: If hiring a car, check the rental company’s requirements, as they may need you to have an IDP.
Drink Driving Laws: Georgia has stricter drink driving laws than many countries, with severe punishments for violations. Avoid alcohol if you plan to drive.
Driving Conditions
Driving in Georgia, especially outside city centers, can present several challenges:
Poor Lighting and Road Quality: Roads outside city centers are often poorly lit and of lower quality.
Hazards: Stray livestock, confusing road markings, and erratic driving can pose significant hazards.
Weather Conditions: Heavy rain, flooding, snow, and landslides can affect roads and bridges, especially in remote areas. Always check local weather conditions and ensure your vehicle is well-equipped for travel outside Tbilisi.
Are Taxis Safe in Tbilisi?
Yes, taxis in Tbilisi are generally safe. Using reputable taxi services or ride-hailing apps like Bolt or Yandex ensures fair pricing and reliable transportation, adding to the overall safety of the city.
Avoiding Taxi Scams:
Beware of Airport Taxis: Drivers waiting outside airports often quote higher prices.
Negotiate (if necessary): While ride-hailing apps are recommended, some travelers prefer taxis. If you choose a taxi, politely negotiate the fare before getting in. Agree on a price in advance to avoid surprises.
Ride-Hailing Apps - Your Best Ally:
Download Bolt or Yandex.Taxi: These popular apps offer transparent pricing. You'll see the estimated fare upfront, ensuring a fair price and a smooth ride.
Convenience at Your Fingertips: These apps allow you to request a ride, track your driver's location, and pay electronically, avoiding cash exchange hassles.
Additional Tips:
Learn Basic Georgian Phrases: Knowing a few basic phrases like "gamarjoba" (hello) and "ra ghirs" (how much) can be helpful for communication.
Carry Local Currency (GEL): While some taxis accept card payments, having local currency (Georgian Lari - GEL) on hand can be convenient.
Conclusion
Georgia has successfully transformed from a post-Soviet state into one of the safest and most business-friendly countries in the region. Its economic stability, strong legal framework, political stability, and robust infrastructure make it an ideal destination for business operations. While no country is entirely free of crime, Georgia's low crime rates and effective anti-corruption measures provide a secure environment for businesses and investors.
Frequently Asked Questions (FAQs)
Which Language is Spoken in Georgia?
The official language is Georgian. However, English and Russian are widely spoken, especially in business and tourist areas, facilitating easier communication for foreigners.