Georgia is one of the most investor-friendly countries in the world. It is ranked as 7th among 190 countries in terms of ease of doing business by the World Bank. The term “investor” has consistently been popularized and idolized by all governments over the past two decades in Georgia. Citizens are aware of the importance of foreign investors for the economic development and their well-being.
Why should you consider investing in Georgia?
Apart from the above discussed, Georgia has low taxes that encourage investors to move their business to the country. There are number of tax advantages to investing in Georgia. Below is the list of some of the most interesting benefits available to entrepreneurs. Please note that the list is not exhaustive, and you should consult firms that provide accounting services in Tbilisi and Batumi for details.
Profit tax is only paid upon dividend distribution – this is known as the Estonian model. Unlike other countries, in Georgia you do not pay profit tax on your earned profits. You only pay profit tax when you extract dividends from business. This gives businesses ability to accumulate significant profits prior to paying any taxes.
Individual entrepreneurs with “Small Business” status pay only 1% in taxes – instead of paying 20% personal income tax, individual entrepreneurs holding the Small Business status only pay 1% tax on their incomes.
Number of tax benefits are available for IT businesses – there are special statuses available for IT businesses (“Virtual Zone Entity” status and “International Company” status) that allow them to significantly reduce or altogether avoid paying key taxes like income tax and profit tax.
Free Industrial Zones – currently there are four Free Industrial Zones - one in Tbilisi, one in Poti and two in Kutaisi. There are number of tax benefits available to entities operating in such zones. The benefits include profit tax, property tax and import tax advantages. However, there are number of details that need to be checked prior to deciding to enter the Free Industrial Zones.
Each of the above listed tax benefits might offer your company significant advantages. Prior to deciding to invest in Georgia, it is recommended that you consult with companies providing accounting services in Batumi, Tbilisi, Poti, and other cities of Georgia.