Foreign Investments in Georgia: Legal Framework, Investment Opportunities, and Government Preferences
28 April 2025
Shalva Giorgadze, Head of the Department of Property Relations
Introduction
Georgia confidently maintains its leading position among countries in the region in attracting foreign investment. The growth of FDI (Foreign Direct Investment) is driven by the transparency of the legal framework, preferential tax regimes, and simplified administrative procedures, allowing, among other things, the registration of a business in just one day (including the possibility of remote registration via a power of attorney). An additional advantage is Georgia’s strategic geographical location and large-scale infrastructure projects, such as the modernization of the Port of Anaklia, the construction of a new airport, and the ongoing development of a highway spanning the entire country. For substantial investors willing to invest from USD 300,000, there is an opportunity to obtain an investment residence permit for five years with the possibility of extension, as well as tax residency status.
1. Legal Regulation
The Georgian legal system creates a favorable environment for foreign investments. The key legislative acts include:
- Law of Georgia "On Promotion and Guarantees of Investment Activity" This law guarantees the protection of capital and defines the procedures for making investments in the country. View document
- Law of Georgia "On State Support for Investments" This act establishes support measures such as tax incentives, simplified administrative procedures, and other mechanisms to accelerate the launch of investment projects. View document
2. Key Investment Sectors
Georgia offers a wide range of investment opportunities, notably in the following sectors:
- Real Estate The growing demand for residential and commercial real estate in Tbilisi and Batumi is driven by the development of the tourism sector and the increase in the number of foreign residents.
- Energy The government prioritizes renewable energy sources (hydropower, solar energy). In 2024, several agreements were signed with foreign investors (according to official press releases from the Ministry of Economy and Sustainable Development), including solar energy projects in the Kakheti region.
- Information Technology and Fintech Special tax regimes are in place—namely, the Virtual Zone and international company status—allowing IT businesses to virtually avoid paying income tax and VAT when exporting services, and in certain cases, to benefit from a zero rate on dividends.
- Tourism and HospitalityThe construction of new hotels, resorts, and entertainment complexes is actively supported by the state, especially in the coastal region (Batumi) and the capital cluster (Tbilisi).
- Manufacturing and TradeEstablishing production facilities and processing goods is particularly advantageous in Free Industrial Zones (FIZs), where significant tax incentives are available.
- AgricultureAlthough agriculture is a priority sector, foreigners are prohibited from directly owning agricultural land. Partnerships with Georgian citizens are therefore necessary for agricultural projects.
3. Forms of Investment (Considering the Specifics of the Agricultural Sector)
Foreign investors may select from various forms of business operations:
1.Foreign Direct Investment
Establishing a new enterprise or acquiring a stake in an existing business is the most common option, ensuring full control over assets.
2.Joint Ventures and Partnerships
Combining international expertise with local market knowledge is particularly relevant in the agricultural sector, where, by law, land must be registered under a Georgian citizen’s name.
3.Investment Funds
Participation in funds registered under Georgian legislation allows for risk distribution and access to professional capital management services.
4.Licensing and Consortium Schemes
These are employed for large-scale projects involving government incentives and grants.
1.Foreign Direct Investment
Establishing a new enterprise or acquiring a stake in an existing business is the most common option, ensuring full control over assets.
2.Joint Ventures and Partnerships
Combining international expertise with local market knowledge is particularly relevant in the agricultural sector, where, by law, land must be registered under a Georgian citizen’s name.
3.Investment Funds
Participation in funds registered under Georgian legislation allows for risk distribution and access to professional capital management services.
4.Licensing and Consortium Schemes
These are employed for large-scale projects involving government incentives and grants.
4. Minimum Investment Threshold
While there is no minimum investment threshold in Georgia, specific amounts grant access to certain benefits:
●From USD 100,000: Grants the right to obtain a one-year residence permit with the possibility of extension.
●From USD 300,000: Allows the investor to obtain a five-year investment residence permit, which can later be exchanged for a permanent residence permit.
From USD 500,000: Investment above this threshold qualifies the investor for tax residency status, providing additional tax and financial advantages for conducting business.
●From USD 100,000: Grants the right to obtain a one-year residence permit with the possibility of extension.
●From USD 300,000: Allows the investor to obtain a five-year investment residence permit, which can later be exchanged for a permanent residence permit.
From USD 500,000: Investment above this threshold qualifies the investor for tax residency status, providing additional tax and financial advantages for conducting business.
5. Taxation
A simple and transparent tax system is one of Georgia’s key competitive advantages. Key rates and preferential regimes include:
Basic Taxes:
● Corporate Income Tax: 15% levied only on distributed profits. No tax is levied if a company reinvests funds into its own development.
●Personal Income Tax: 20% on income earned in Georgia (base rate, with lower rates applicable to certain types of income).
Special Regimes:
●IT Companies:
●Free Industrial Zones (FIZs):
Companies operating in FIZs and complying with certain conditions may be exempt from corporate income tax, VAT, property tax, and customs duties.
These measures significantly reduce the tax burden, enhancing the competitiveness of Georgian companies in the international market.
Basic Taxes:
● Corporate Income Tax: 15% levied only on distributed profits. No tax is levied if a company reinvests funds into its own development.
●Personal Income Tax: 20% on income earned in Georgia (base rate, with lower rates applicable to certain types of income).
Special Regimes:
●IT Companies:
○ Virtual Zone: 0% corporate income tax and VAT on exported IT services.
○International Company Status: 5% corporate income tax, 0% dividend tax, and 5% payroll tax.
●Free Industrial Zones (FIZs):
Companies operating in FIZs and complying with certain conditions may be exempt from corporate income tax, VAT, property tax, and customs duties.
These measures significantly reduce the tax burden, enhancing the competitiveness of Georgian companies in the international market.
6. Investment Exit Opportunity
Georgian legislation guarantees flexible exit mechanisms for investors:
1.Sale of Shares or Buyback
Enables a quick return of invested funds based on the market valuation of assets.
2.Company Liquidation
Upon closure of a legal entity, the investor receives a proportional share of the value of property/assets.
3.Investment Funds
Special mechanisms within funds help optimize tax costs during profit repatriation.
Thus, investors can plan an exit strategy in advance, taking into account tax optimization and legal guarantees.
1.Sale of Shares or Buyback
Enables a quick return of invested funds based on the market valuation of assets.
2.Company Liquidation
Upon closure of a legal entity, the investor receives a proportional share of the value of property/assets.
3.Investment Funds
Special mechanisms within funds help optimize tax costs during profit repatriation.
Thus, investors can plan an exit strategy in advance, taking into account tax optimization and legal guarantees.
7. Agreements with Foreign Investors
The Georgian government actively signs agreements with foreign companies to stimulate investments in priority sectors. According to official press releases from the Ministry of Economy and Sustainable Development and the Government of Georgia, in 2024, major memorandums and cooperation agreements were signed, including:
●Investments in Renewable Energy
An agreement with an international consortium to build a solar power plant in Kakheti (approximately 100 MW). The total investment exceeds USD 150 million.
●Development of the IT Sector
The creation of an innovative cluster in Tbilisi in collaboration with foreign technology companies, with total investments exceeding USD 50 million.
●Tourist Infrastructure
Implementation of hotel projects in Batumi and Kutaisi, with a total investment of around USD 200 million.
All these projects receive state support in the form of tax incentives, accelerated registration, and assistance in obtaining permits.
●Investments in Renewable Energy
An agreement with an international consortium to build a solar power plant in Kakheti (approximately 100 MW). The total investment exceeds USD 150 million.
●Development of the IT Sector
The creation of an innovative cluster in Tbilisi in collaboration with foreign technology companies, with total investments exceeding USD 50 million.
●Tourist Infrastructure
Implementation of hotel projects in Batumi and Kutaisi, with a total investment of around USD 200 million.
All these projects receive state support in the form of tax incentives, accelerated registration, and assistance in obtaining permits.
8. Comparative Analysis
When comparing Georgia with other countries (Turkey, Azerbaijan, Kazakhstan, UAE), the following advantages stand out:
1.Ease of Doing Business
Company registration in Georgia can be completed in one working day, and it can even be performed remotely through a power of attorney. This simplifies project launches compared to the more complex procedures in Turkey and Kazakhstan.
2.Flexible Tax Regime
Low base rates and special incentives (particularly for IT companies) are often more advantageous than those in Azerbaijan and other regional competitors.
3.Government Preferences
Programs for obtaining an Investment Residence Permit (starting from USD 300,000), tax residency status, and other support mechanisms make Georgia attractive to investors of all sizes. In the UAE, incentives primarily target large international corporations, whereas Georgia offers comfortable conditions for medium-sized businesses as well.
4.Infrastructure and Geographical Advantages
The modernized Port of Anaklia, a new airport, highways running across the country, and Georgia’s strategic location at the crossroads of Europe and Asia provide convenient logistics and access to the EU, CIS, and Middle Eastern markets.
1.Ease of Doing Business
Company registration in Georgia can be completed in one working day, and it can even be performed remotely through a power of attorney. This simplifies project launches compared to the more complex procedures in Turkey and Kazakhstan.
2.Flexible Tax Regime
Low base rates and special incentives (particularly for IT companies) are often more advantageous than those in Azerbaijan and other regional competitors.
3.Government Preferences
Programs for obtaining an Investment Residence Permit (starting from USD 300,000), tax residency status, and other support mechanisms make Georgia attractive to investors of all sizes. In the UAE, incentives primarily target large international corporations, whereas Georgia offers comfortable conditions for medium-sized businesses as well.
4.Infrastructure and Geographical Advantages
The modernized Port of Anaklia, a new airport, highways running across the country, and Georgia’s strategic location at the crossroads of Europe and Asia provide convenient logistics and access to the EU, CIS, and Middle Eastern markets.
Conclusion
Georgia continues to strengthen its status as one of the most attractive locations for foreign investments, a position driven by:
● Transparent legislation and clear business regulations.
●A flexible tax system with various special regimes (Virtual Zone, Free Industrial Zones, etc.).
● Government support in the form of tax incentives, fast company registration, and investor assistance programs.
●An advantageous geographic location and dynamically developing infrastructure.
Therefore, for those considering Georgia as a potential destination for capital investment, it is advisable to study the available tax incentives, investment protection mechanisms, and verify alignment with current government support programs. If necessary, consultation with professional advisors is recommended at every stage—from market analysis and business registration to tax optimization and investment exit strategies.
Georgia remains open to cooperation with foreign capital and is committed to strengthening its business climate while maintaining transparency and predictability in legal regulation. These factors contribute to the growing number of international companies choosing Georgia as a reliable platform for business development in the region.
● Transparent legislation and clear business regulations.
●A flexible tax system with various special regimes (Virtual Zone, Free Industrial Zones, etc.).
● Government support in the form of tax incentives, fast company registration, and investor assistance programs.
●An advantageous geographic location and dynamically developing infrastructure.
Therefore, for those considering Georgia as a potential destination for capital investment, it is advisable to study the available tax incentives, investment protection mechanisms, and verify alignment with current government support programs. If necessary, consultation with professional advisors is recommended at every stage—from market analysis and business registration to tax optimization and investment exit strategies.
Georgia remains open to cooperation with foreign capital and is committed to strengthening its business climate while maintaining transparency and predictability in legal regulation. These factors contribute to the growing number of international companies choosing Georgia as a reliable platform for business development in the region.
Notes:
● Statistical data are taken from the official reports of the National Statistics Office of Georgia (GeoStat): www.geostat.ge.
● Information on agreements is based on official press releases from the Ministry of Economy and Sustainable Development of Georgia and the Government of Georgia.
●Specific conditions regarding tax incentives and rates should be verified before entering into investment agreements, as legislation may change.
● Statistical data are taken from the official reports of the National Statistics Office of Georgia (GeoStat): www.geostat.ge.
● Information on agreements is based on official press releases from the Ministry of Economy and Sustainable Development of Georgia and the Government of Georgia.
●Specific conditions regarding tax incentives and rates should be verified before entering into investment agreements, as legislation may change.
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MARIA GUSEINOVA
Leading Manager of Commercial Department
Leading Manager of Commercial Department