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Frequently Asked Questions
I. Macroeconomic Environment
I. Macroeconomic Environment 1. What is Georgia's GDP per capita? GDP per capita reached 2297.3 USD in 2007.
2. What was the GDP growth rate for the past year? Real GDP grew 12.0 percent in 2007 as compared with the previous year.
3. What is the inflation rate? The annual inflation rate for 2007 was 11.0 percent.
4. What is the ratio of state debt to GDP? State debt was 32 percent of GDP in 2006. Foreign debt was 16.9 percent of GDP, and internal debt was 10.9 percent of GDP.
5. What is the ratio of tax revenues to GDP? Tax revenues were 22.7 percent of GDP in 2006.
6. What percentage of GDP is the budget deficit? In 2006, the budget deficit was 0.2% of GDP.
II Starting a Business 8. How many documents are required to register a business? In general, the following documents are required:
9. How many days are required to register a business? After submission of all documents, the Tax Inspection must register the business structure within three working days. Individual entrepreneurs must be registered within one working day.
10. What institutions should be contacted to register a business? 1. Notary
2. Bank (twice: for payment of fees and for opening a bank account)
3. Tax Department
III. Licenses and Permits 11. How many documents are required to obtain a license? There are three general documents to be presented:
Other documents may be required depending on the type of license.
12. How many documents are required to obtain a permit? There are three general documents to be presented:
Other documents may be required depending on the type of license.
13. Is there a "one stop shop" principle? Yes.
IV. Registering Immovable Property 14. What documents are required to register immovable property? The following documents are required to register ownership rights in immovable property:
15. Where is property registered? Immovable property is registered with the National Agency of Public Registry, which is subordinated to the Ministry of Justice of Georgia.
16. How many days are necessary to register property? Property registration takes 1, 3, 5, or 10 business days, depending on the turnaround period requested and paid for.
17. What does the registration of a title to immovable property cost? The registration fee does not depend on the value of the property. It is a fixed amount and depends on the turnaround period requested. Fees range from GEL 150 for one-day service to GEL 7 for 10-day service.
18. Can international arbitration be used to resolve disputes over property in Georgia? Yes, Georgia honors the parties' agreement or contract to rely on international arbitration to resolve disputes over property located in Georgia.
V. Tax System 19. How many taxes exist?
20. What are the tax rates?
21. What are the rules for treating capital expenditures for corporate income tax calculation purposes? Georgia's Tax Code provides two options for deducting capital expenditures from taxable income: 1. Deducting of capital expenditures through the depreciation mechanism
VI. Foreign Trade 22. What favorable trade regimes are applicable to Georgia's foreign trade?
23. What goods are subject to import licenses or permits?
24. What goods are subject to export licenses and permits?
VII. Foreign Investments 25. Does Georgian law treat resident and non-resident investors differently? The law on "Investment Activities and Guarantees" secures equal treatment and rights to Georgian and foreign investors, except for ownership of agricultural land. Foreign legal and physical persons are allowed to purchase land in Georgia, except for agricultural land.
26. Does Georgia prohibit foreigners from investing in any sectors open to domestic investors? No, foreigners may invest in any sectors open for private investment.
27. Does Georgia have an established securities market? Yes, there is a securities exchange with a well-developed institutional structure and legal framework. Trading volumes are low but rising.
28. What restrictions will foreign investors face in repatriating capital? None. Georgia has no restrictions on capital repatriation. Dividends are subject to a 10% withholding tax.
VIII. Financial Institutions 29. What is the average interest rate? Interest rates for loans average 15-18%; and for deposits 6-10%.
31. Are foreign financial institutions restricted from opening branches or affiliates in Georgia? There are no limitations on opening branches and affiliate companies of foreign financial institutions in Georgia. Licensing terms and conditions are the same as those for Georgian residents.
IX. Pricing and Tariffs 32. What types of price controls are in effect in Georgia? The only price controls are regulated tariffs in the following sectors:
o Personal Income Tax is 25% flat
o Corporate Income Tax is 15%.
o VAT is 18%.
o Excise Taxes vary, depending on the product.
o Property Tax rates vary, depending on the type of property;
o Customs Duties fall into 3 brackets: 0%, 5% and 12%. 90% of goods are in the 0% category. |
 President Saakashvili and his government have successfully created a very attractive environment for economic development as the basis for building a nation that provides its citizens with hope and opportunity
Steve C. NicandrosFrontera Resources Houston, President and CEO
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