Successfully investing in Georgia

last updated on 7 June 2024 | reading time approx. 2 minutes

How do you assess the current economic situation in Georgia? »
How would you describe the investment climate in Georgia? Which sectors offer the largest potential? »
What challenges do German companies face during their business ventures into Georgia? »
What are Georgia's current economic relations with Germany?? »
In your opinion, how will Georgia develop? »

How do you assess the current economic situation in Georgia?

Since 2021, Georgia's economy has been growing continuously every year. In 2022, growth of 9 percent was even achieved. In 2024 is a growth of 6 percent expected. The economic growth is mainly due to the tourist industries (very high foreign exchange earnings) as well as the service- and construction industries. Other factors for growing are the migrants from Russia, which are stimulating the service sector, and the transport corridor for goods from China that are transported through Georgia, the Caspian and the Black Sea.

Exports in 2024 are developing very positively. This is primarily due to high demand for Georgian raw materials. High growth in foreign investment is also expected by 2027.

How would you describe the investment climate in Georgia? Which sectors offer the largest potential?

Georgia is a very attractive country for foreign investors. The country offers less bureaucracy and extremely advantageous tax exemptions. Among the most important are:

VIRTUAL ZONE TAX EXEMPTIONS

Georgia offers profit tax exemptions for IT companies if their target market is outside the country. The country is becoming a popular place for IT companies to do business because of the skilled local IT staff.

FREE INDUSTRIAL ZONES IN GEORGIA

The Free Industrial Zones (FIZ) were established with the aim of attracting foreign investment capital and investors to Georgia. The FIZ offer extended tax benefits as well as ease of operation to companies located in the zone.

The following sectors also offer the greatest potential for foreign investors:

construction
agriculture
renewable energy
tourism
general services
export of foodstuffs

What challenges do German companies face during their business ventures into Georgia?

Georgia is considered a country where corruption has been successfully fought in the past. By creating a very good investment climate, bureaucracy has also been reduced in recent years. Overall, it can be said that investors face relatively few challenges. Learning the local language is usually the biggest challenge for foreign investors. However, this is often unnecessary because most of the population in the cities is very well educated and often speaks at least English.

What are Georgia's current economic relations with Germany?

Georgia has very good economic and cultural relations with Germany and Germany is one of Georgia's largest trading partners. German companies do business very successfully in Georgia.

In your opinion, how will Georgia develop?

The country has made great progress in recent years in liberalizing trade with the EU and implementing EU legislation into national law. A shadow over this positive development was cast in April 2024 by the draft of the so-called “Agents Law”, which was submitted for a vote by the parliament in Georgia. In response to this draft, a wave of protests emerged from civil society protesting against this law. According to EU experts, the current government does not want to bring the country into the EU, although an estimated 80 percent of Georgians want it. It is difficult at the moment to predict how Georgia will develop politically, but economically Georgia has very good conditions to develop rapidly and to record further economic growth in the next few years. Georgia is a very interesting location for foreign investors and offers interesting investment opportunities.