Issue 5, 2014. October-November

   

Stricter Visa Rules Disappoint Foreigners, Trigger Economic Concerns

Maia Edilashvili

Georgia's new immigration laws are creating havoc for foreign nationals living in the country, irrespective of nationality or employment status.

Reports of freelance professionals and contract workers struggling to receive documentation, as well as students being denied the permits necessary to attend university are widespread. Likewise, foreigners working for international organizations in Georgia are being bombarded with misinformation or incomplete regulations, leading to hours of work lost and, in some cases, unplanned trips home to apply for newly required visas or other paperwork.

The new visa and residence permit policy, which the government introduced on September 1, is part of a larger effort to improve "alien data administration." But some analysts warn it could harm the Georgian economy and roll back the country's success at attracting tourists and investors.

Radical Change in Policy for Long-Term Visitors

Under the changes, visitors who qualify for visa-free travel to Georgia can stay for just 90 days; longer stays - or if one is a resident of a country that does not qualify for visa-free travel - require travel documents that only Georgian diplomatic missions and consular offices abroad issue. All types of visas costs $50. Ninety-four countries are eligible for short-term, visa-free travel to Georgia, including the U.S. and EU member states, as well as Armenia, Azerbaijan, Turkey, and Russia.

For a long stay, either a temporary residence permit - which allows the bearer to work, receive an education or reunite with family members in Georgia - or a permanent residency permit are required.

An investment residency permit is also available for those who have invested at least 300,000 lari in the country.

According to the government, the new rules are an effort to regulate the country's immigration law prior to it receiving visa-free travel to the EU.

The political and press section of the EU Delegation to Georgia told Investor.ge in an email interview that one of the benchmarks of the Visa Liberalisation Action Plan (VLAP) requires Georgia to "consolidate the legal and institutional framework for migration policy, in line with EU and international standards, including in the field of legal/labour migration."

In its first progress report on the implementation of the VLAP, the delegation noted that the EU Commission recommended that Georgia adopt the law on foreign nationals and stateless persons.

"The period concerning the visa-free stay indeed brings Georgia closer to the EU standards, where the '90 days in any 180-day-period' rule applies. The change was not explicitly required; however, it should be seen as a part of general approximation," the EU Delegation said in an email to Investor.ge.

A Welcoming Home Base

Interest in Georgian citizenship - and residency - has been high in the past, even though foreigners from 118 countries enjoyed visa-free entry to the country and could stay for 360 days.

Giorgi Meurmishvili, a chief specialist in the public relations department at the Public Service Development Agency, which issues residence permits, told Investor.ge that the agency responded to 7,162 applications for temporary residence permits and 1,466 applications for permanent residence permits in 2013, and an approximately same number applied in 2012. Meurmishvili did not respond to questions about how many applications were approved. Under the previous legislation, which allowed citizens of 118 countries to enter Georgia without a visa and stay for 360 days, Georgia developed a reputation as a welcoming destination for freelancers, students, and travelers, noted economists Florian Biermann and Eric Livny in an editorial published in the Georgia Today newspaper on September 26.

"The foreigners are traveling in Georgia, working, bringing along investment and expertise," noted Inge Snip, a Dutch freelance consulltant, trainer and writer.

Freelancers and researchers like Snip provided Georgia with the skills and experience that the developing economy needs, Biermann and Livny said, adding that, unlike developed economies (they used Germany as an example), which are fighting against too much immigration from low-income European countries, Georgia needs the knowledge that its skilled classes of immigrants bring, especially consultants and students.

Having spent seven years in Georgia, Snip said she finds the new visa rules "troubling".

"The personnel [at Public Service Hall] were friendly, though no one really knew what kind of documents we needed and how to deal with particular cases. So you would hear different stories from different people," Snip complained.

After receiving only a six-month stay permit, she will have to reapply in December and spend additional time, energy and 210 lari ($120) because her document will expire in February.

"These regulations should have been debated beforehand and the service personnel should have undergone training," she told investor.ge.

Many in the expat community agree, citing uneven application of the rules - and a troubling prevalence of misinformation during the application process.

ISET, the International School of Economics at Tbilisi State University, where both Biermann and Livny work, has experienced the challenges first hand: ten foreign students from Armenia and Azerbaijan applied for residency permits. Their applications were identical; seven were approved, two were denied and one is still in process, the economists wrote in an editorial. Their experience is not unique.

"I applied [for a residence permit] using the same documentation as my American business partner,but I got one year and he got five," Joseph Alexander Smith, from the UK, told Investor.ge. A freelance journalist based in Tbilisi and a managing co-director of the American Language Center, Smith has felt a sense of instability, which is causing him to reconsider his investment plans.

"I want to be able to keep running the business, but right now I have no guarantee of staying after January 2015," he said. "Also, if I want to start another business it will be almost impossible to prove I'm employed [because immigration authorities] only accept contracts."

The Ministry of Justice has written that residency permits are accessible to those "who carry out entrepreneurial or labor activity in Georgia," including freelance professionals. Also, the law reads that, "any activity for which a person receives remuneration shall be considered labor activity."

Despite this, foreigners state it is very difficult to receive residency if one lacks permanent employment because one is requested to submit a contract or employment document.

"Ours was a letter from our partner organization saying we were needed for the next five years and they [the government] accepted it, but no one who was freelancer or self-employed could submit a letter; they needed contracts," said Smith.

Those restrictions, noted Biermann and Livny, ultimately work against Georgia.

"Thanks to many of these irregularly employed foreigners, Georgia was about to become a 'cool' place, something that can be easily confirmed by reading their declarations of love for Georgia on the internet. To a considerable extent, this development came about because Georgia was so successful in attracting artists, bloggers, travelers and generally interesting people (in economics, these people are considered to belong to the 'cultural capital' of a country)," the economists wrote.

They added that"[b]eing a 'cool' place is not about having a lot of people who work from nine to five every day, as Georgian lawmakers may have thought. Rather it is about artists and cultural entrepreneurs who may indulge in a precarious and unpredictable life."

"And this has economic implications, because it is much easier to attract economically relevant people to places which have a cosmopolitan, culturally attractive atmosphere, like Amsterdam and London. Georgia may now be squandering the advantage it had over much richer places like Almaty, Baku, and Tashkent," Biermann and Livny concluded.

Reforming the Reform

But the government has argued that the regulations are necessary as part of a principle of "reciprocity" with other countries and for Georgia's own strategic interests, as well as a part of Tbilisi's efforts to adhere to the standards required for the EU's Schengen zone. The Ministry of Foreign Affairs did not respond to Investor.ge's questions about the implementation of the new rules or any government projection about its potential impact. The Ministry's press department did note, however, that several countries were removed from the visa-free list (countries whose residents can stay in the country for 90 days without a visa).

The ministries of these countries, however, did not respond to the Georgian government's proposal; the ministry plans to repeat the proposal at a later date.

Roman Gotsiridze, the president of the Tbilisi-based Economic Development Center of Georgia, argues, however,that a "reciprocal approach" does not make sense for a small, developing country like Georgia.

Once an advisor to former Georgian President Mikheil Saakashvili, as well as the former president of Georgian National Bank,he believes that instead of unnecessary bureaucratic principles, Georgia should seek to be innovative - "[This is] the only solution for a small country," Gotsiridze noted.

Economists are worried that because consular services abroad are usually located in the capital cities that this would complicate visa procedures for people leaving in other areas.

Additionally, Georgia has 63 diplomatic missions abroad, meaning that citizens of many countries would need to apply for Georgia's consular service in a neighboring country, which would further complicate the process of obtaining a visa.

The Ministry is planning to roll out a program of e-visas that will, in part, ease the burden on Georgia's limited number of consular offices.

In the meantime, however, Gotsiridze said that Georgia is losing out on tourists and visitors.

"Tourists in today's world make decisions very quickly, so the visa obligation will likely de-motivate many people to travel to Georgia," he told Investor.ge.

Kakha Bendukidze, who served as Minister of the Economy after the Rose Revolution, also denounced the new visa rules. On his Facebook page, the former minister wrote that issuing visas at the border is a common practice "in all developing tourist-[oriented] economies."

According to Bendukidze, the reform of easing visa rules, which he personally launched in 2004, was composed of three components: increasing the list of visa-free entries, providing visas on the state border and allowing long-term stays.

The reform proved a success. According to official statistics, the number of foreign visits started to increase progressively, jumping from a low of around 700,000 in 2006 to over 5 million in 2013. Currently the share of tourism in Georgia's service exports is as high as 58%.

Lambasting the stricter visa rules, Gotsiridze now expects that the worst outcome from the changes may be a decline in the inflow of tourists who would, before the reforms, had the chance to stay in Georgia and start working here.

"I personally don't mind them bureaucratizing the system and making sure they know who is who and where they are and for how long and applying penalties for over-staying, but Georgia isn't the UK, France or Sweden with a generous benefit system," said Smith, a journalist and the co-director of the American Language Center.

He warned the new regulations could be a deterrent for investors like himself against opening small and medium size businesses (SMEs).

"I don't really leach off the Georgian state; I pay taxes and employ locals. So I have a lot riding on staying in Georgia, but I don't want to stick around if they make it difficult for no reason. [The new regulations] will drive SMEs away."

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