Issue 1, 2019. February-March

   

INVESTMENT NEWS

Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. The information in this issue was taken from agenda.ge, a government- supported website, and other sources.

Georgia Breaks Visitor-Numbers Record in 2018
Over eight and a half million foreigners visited Georgia in 2018-a 9.8 percent year-on-year increase. A little more than half, 4.75 million, were tourists, which is a 16.9 percent increase compared to 2017. Fifty percent more tourists traveled to the country from Estonia, Slovakia, Romania, the Netherlands and Germany. Overall, the countries with the largest increases in tourist numbers were South Korea, China, Belarus, Israel and Kuwait. Georgia brought in some $3 billion from international tourism in the country from January-November 2018-$485 million more than in the same period in 2017.


Record High Wine Exports in 2018
Georgia set a record high for wine exports in 2018, exporting almost 86.2 million bottles of wine to more than 50 countries, the Georgian National Wine Agency reported. In total, the sale of wine to foreign countries generated $203 million-an increase of 20 percent in comparison to 2017. The top 10 countries to import Georgian wine were Russia, Ukraine, China, Kazakhstan, Poland, Latvia, Belarus, Estonia, Lithuania and Germany.

Five Percent Economic Growth Forecast For 2019
The World Bank forecasts a five percent growth rate for the Georgian economy in 2019, which is higher than the predicted growth for neighboring countries: Armenia (4.3 percent), Azerbaijan (3.6 percent), Russia (1.5 percent) and Turkey (1.6 percent). The most recent forecast bumped up Georgia's growth rate by 0.2 percent. Georgia's strong growth is especially notable considering that global growth is expected to slow down to 2.9 percent in 2019.


Georgia Moves Up in Forbes' Best Countries for Business Rating
Georgia has moved up eight ranks in 2018 in Forbes magazine's "Best Countries for Business" rating. Ranked 44th out of 161 countries, Georgia is ahead of all neighboring countries: Russia (55th), Turkey (57th), Azerbaijan (70th), Ukraine (77th) and Armenia (81st). Georgia's ratings were especially impressive in trade freedom (4th), investor protection (2nd), tax burden (16th) and corruption (43rd). The new ranking puts Georgia head of Qatar, South Africa, Brazil and India, among others.
Down to a Single Tax Document-Georgia Does Away with Extra Tax Forms
Businesses in Georgia will only have to file one tax document, instead of five, as of January 1. This reform has been introduced in a bid to reduce bureaucracy and strengthen the ease of doing business in the country, especially for small- and medium-sized businesses.

New Tax Benefits for Large International Companies
In a bid to become the financial center of the region, Georgia is offering unique tax benefits to large transnational companies that open up regional offices in the country.
Prime Minister Mamuka Bakhtadze previously introduced the concept of electronic residency, which will allow the citizens of more than 30 countries to electronically register their companies and to open bank accounts in Georgia.

New Restrictions on Banks Issuing Loans
The Georgian National Bank has issued stricter rules on who can receive bank loans. Starting on January 1, banks are responsible for determining if clients have the financial means to pay back loans before they are issued.
The new regulations also make it more difficult to issue loans using real estate as collateral-such loans can be issued if a borrower owns several pieces of real estate and if the properties are not leased. These regulations will affect only entities that have given loans to 20 or more individuals.

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