Tbilisi, Georgia - 31C Partly cloudy / 14:40

Frequently Asked Questions

 

 

I. Macroeconomic Environment
II Starting a Business 
III. Licenses and Permits 
IV. Registering Immovable Property 
V. Tax System
VI. Foreign Trade
VII. Foreign Investments
VIII. Financial Institutions
IX. Pricing and Tariffs

 

 

 
I. Macroeconomic Environment:
 
1. What is Georgia’s GDP per capita?
GDP per capita reached 1401.8 USD in the first half of 2008.

 

2. What is the GDP growth rate of Georgia?
Actual GDP grew by 8.5 percent in the first half of 2008.

 
3. What is the inflation rate?
The average CPI (e-o-p) in 2008 (YTD) is 12.8 percent.
 

4. What is the ratio of state foreign debt to GDP?
The forecasted state foreign debt for 2008 is about 18 percent of GDP.

 

 
5. What is the ratio of tax revenues to GDP?
The forecasted tax revenue for 2008 is 27.6 percent of GDP

 

 

6. What percentage of GDP is the budget proficit (surplus)?
In 2007, the budget proficit was 1,2 percent of GDP

 

 
7. What is the exchange rate of the Georgian lari to the U.S. dollar and Euro?
  • The average annual USD / GEL exchange rate in the first half of 2008 (period average) was 1.5
  • The average annual Euro / GEL exchange rate in the first half of 2008 (period average) was 2.28
 

II Starting a Business

 

8. How many documents are required to register a business?

In general, the following documents are required:

 

  • Application
  • Company charter
  • Signature sample of the director 
  • For limited liability companies and joint stock companies, document certifying the appointment of directors and members of the supervisory council 
  • Receipt for payment of registration fees
 

9. How many days are required to register a business?

 

After submission of all documents, the Tax Inspection must register the business structure within three working days. Individual entrepreneurs must be registered within one working day.

 

 

10. What institutions should be contacted to register a business?

      1. Notary
      2. Bank (twice: for payment of fees and for opening a bank account)
      3. Tax Department

  
 

III. Licenses and Permits

 

11. How many documents are required to obtain a license?
There are three general documents to be presented:
  • Application
  • Extract from Entrepreneurs Registry
  • Receipt for payment of license fee

Other documents may be required depending on the type of license.

 

 
12. How many documents are required to obtain a permit?

There are three general documents to be presented:

  • Application
  • Extract from Entrepreneurs Registry
  • Receipt for payment of license fee

Other documents may be required depending on the type of license.

 

13. Is there a "one stop shop" principle?
Yes.
 
IV. Registering Immovable Property
14. What documents are required to register immovable property?

 

The following documents are required to register ownership rights in immovable property:
  • Application for registration
  • Agreement on the transfer of rights in immovable property
  • Certificate on non-encumbrance
  • Receipt for payment of the registration fee
  • Copy of the identity card of the property owner
  • Cadastral drawing
 
15. Where is property registered?
Immovable property is registered with the National Agency of Public Registry, which is subordinated to the Ministry of Justice of Georgia.
 

16. How many days are necessary to register property? 
Property registration takes 1, 3, 5, or 10 business days, depending on the turnaround period requested and paid for.

 

17. What does the registration of a title to immovable property cost?
The registration fee does not depend on the value of the property. It is a fixed amount and depends on the turnaround period requested. Fees range from GEL 150 for one-day service to GEL 7 for 10-day service.

 

 

18. Can international arbitration be used to resolve disputes over property in Georgia?
Yes, Georgia honors the parties' agreement or contract to rely on international arbitration to resolve disputes over property located in Georgia.

 

 

 V. Tax System
19. How many taxes exist?
 
  • There are only six type of taxes;
 

20. What are the tax rates? 

 

  • Personal Income Tax is 25% flat
  • Corporate Income Tax is 15%.
  • VAT is 18%.
  • Excise Taxes vary, depending on the product.
  • Property Tax rates vary, depending on the type of property;
  • Customs Duties fall into 3 brackets: 0%, 5% and 12%. 90% of goods are in the 0% category.
 

21. What are the rules for treating capital expenditures for corporate income tax calculation purposes?
Georgia's Tax Code provides two options for deducting capital expenditures from taxable income:

     1. Deducting of capital expenditures through the depreciation mechanism
     2. 100% deduction in the year in which the capital expenditure is incurred without capitalization and further depreciation

 
VI. Foreign Trade

22. What favorable trade regimes are applicable to Georgia's foreign trade?

  • MFN Tariffs with WTO Members
  • Preferential Tariffs with the USA, Canada, Switzerland and Japan
  • GSP + with the European Union and Turkey
  • Free Trade with CIS Countries and Turkey
 

23. What goods are subject to import licenses or permits?  

 

  • Goods subject to veterinary / phytosanitary control
  • Materials of limited circulation
  • Arms and ammunition
  • Dual-purpose goods
  • Therapeutic agents subject to special control
  • Endangered species
  • Radioactive substances
  • Means of electronic surveillance
 

24. What goods are subject to export licenses and permits?

 

  • Materials of limited circulation
  • Arms and ammunition
  • Dual-purpose goods
  • Therapeutic agents subject to special control
  • Endangered species
  • Radioactive substances
  • Means of electronic surveillance
 
VII. Foreign Investments

25. Does Georgian law treat resident and non-resident investors differently? 
The law on "Investment Activities and Guarantees" secures equal treatment and rights to Georgian and foreign investors, except for ownership of agricultural land. Foreign legal and physical persons are allowed to purchase land in Georgia, except for agricultural land.

 
26. Does Georgia prohibit foreigners from investing in any sectors open to domestic investors?
No, foreigners may invest in any sectors open for private investment.

 

 

27. Does Georgia have an established securities market?
Yes, there is a securities exchange with a well-developed institutional structure and legal framework. Trading volumes are low but rising.

 

 

28. What restrictions will foreign investors face in repatriating capital?
None. Georgia has no restrictions on capital repatriation. Dividends are subject to a 10% withholding tax.

 

 

VIII. Financial Institutions
29. What is the average interest rate?
Interest rates for loans average 15-18%; and for deposits 6-10%.

 

 

31. Are foreign financial institutions restricted from opening branches or affiliates in Georgia?
There are no limitations on opening branches and affiliate companies of foreign financial institutions in Georgia.  Licensing terms and conditions are the same as those for Georgian residents. 

 

 

IX. Pricing and Tariffs
32. What types of price controls are in effect in Georgia?

The only price controls are regulated tariffs in the following sectors:

 

  • Communication
  • Transport
  • Energy 
  • Communal utilities /services 
  • Personal Income Tax is 25% flat 
  • Corporate Income Tax is 15%. 
  • VAT is 18%. 
  • Excise Taxes vary, depending on the product. 
  • Property Tax rates vary, depending on the type of property; 
  • Customs Duties fall into 3 brackets: 0%, 5% and 12%. 90% of goods are in the 0% category.
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OFFICIAL EXCHANGE RATE OF LARI
2010-06-28
EUR 2.2599 0.0000
USD 1.8397 0.0000
All rates

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