Why Entrepreneurs Should Look to Invest in Georgia

While those who backed Brexit are always quick to discuss the benefits of leaving the single bloc, there remains a considerable concern that exiting the EU will harm the UK economy and the level of investment that flows into the country.

This has been borne out by the recent news that the Netherlands has lured 140 Brexit-wary companies since the 2016 referendum, with more than half of these (78) having moved last year.

At the same time, the country is braced for reduced levels of foreign investment in the near-term, and with this, in mind, both investors and entrepreneurs should open their minds to new markets overseas. But why is Georgia an increasingly viable option?

An Introduction to Georgia

Ever since the dissolution of the USSR, a number of Eastern European nations have emerged and gradually transitioned from a command economy model to a free market alternative (including Georgia).

Of course, Georgia endured some lean and challenging years following its hard-earned independence, but over the course of the last decade or so it has begun to evolve and record a series of impressive economic developments.

Its GDP has certainly grown markedly since 2004, for example, showcasing average annual expansion of 5.42% during this period. There are signs that this growth is accelerating too, with a year-on-year increase of 5.8% recording recently during Q3 2019.




This impressive and consistent growth places Georgia amongst the fastest-growing economies in Eastern Europe, marking it an attractive proposition for investors and entrepreneurs who are looking to expand their portfolios of assets and business interests.

In addition to its exponential growth, Georgia is also ranked as the 6th easiest place in the world to do business (from a total of 190 countries). 

Incredibly, it stood in 112th place back in 2005, and there’s no doubt that the presence of a free market economy and the relatively relaxed regulatory landscape is appealing for business owners from across the globe.

Why Else Should You Invest in Georgia?

These factors alone should be enough to encourage investment in Georgia, but there are additional things that may influence your final decision.

From an entrepreneurial perspective, it’s important to note that foreign companies are only taxed on the income derived from Georgian sources, rather than the total value of their global revenue stream. 

To help avoid double taxation, Georgia has also signed official tax treaties with 52 nations, with consultancy firms such as RSM capable of letting you know precisely what levies you’d face as an overseas entrepreneur or investor.




Additionally, the rate of corporate income tax is fixed at just 15%, which is considerably lower than that of the UK (19%), France (33%) and Spain (25%). This is one of the fundamental reasons why firms in Western Europe relocate to Georgia or expand into this marketplace, while minimal import taxes (of between 0% and 12%) also sweeten the deal considerably.

It’s also interesting to note that property tax in Georgia doesn’t exceed 1% in any scenario, enabling investors to tap into this lucrative market as a way of optimising the profitability of their portfolio.

In general terms, the property tax is fixed between 0.05% and 0.2% of a structure’s fair market value, so long as the owners income sits between 40,000 (£11,001) and 100,000 GEL (£27,504). 

If the owner’s total income does top the latter amount, they’ll face a property tax rate of between 0.8 % and 1%, which still compares favourably to most of the world’s developed economies.

With this in mind, it’s little wonder that real estate represents one of the most popular markets for in Georgia (along with tourism and agriculture), while there’s little argument that this fast-growing Eastern European economy is catching the attention of global entrepreneurs.