A Brief History of Georgia's Economic History and Foreign Investment in Georgia

After Georgia seceded from the Soviet Union in 1991, the country did not have the right economic conditions due to the ups and downs of economic and political processes and the lack of social security, but after the 2003 revolution, the country gradually began to provide Building economic infrastructure has flourished between 2006 and 2008, with foreign investment averaging $ 1.5 billion a year. The world economic crisis in 2008 as well as the war with Russia in the same year caused the country's economy to weaken again to the extent that the amount of investment in Georgia decreased to $600 million in 2009, but due to the fact that the effort of this country for as the economic progress and attracting more and more foreign investors continued, this statistic began to grow again; especially since 2012, it has taken a good upward trend and this country was able to attract about $1.3 billion of foreign investment in various fields in 2019. With the emergence of the coronavirus, this number decreased drastically, but since the beginning of 2022, it has been such that in the first 3 months of the year alone, it has managed to attract more than $500 million for investment in Georgia, which shows a growth of about 50% compared to before the coronavirus.

Introducing some important reasons for investment in Georgia

- Suitable geographical location: This country is a strategic region for transportation, being located between Eastern Europe and  Asia, as well as access to global open waters. It borders the Black Sea, Azerbaijan, Armenia and Russia and turkey. It is necessary to know that this country is located on the route of the ancient Silk Road, which expresses the extraordinary geographical location of this country and has made investing in Georgia attractive for foreigners.

- Healthy and Corrupt Administrative System: According to the 2019 global statistics of the administrative corruption index, Georgia has the healthiest administrative system among the Eastern European and Central Asian countries, which creates security for investors and the existence of new investment opportunities in Georgia.

- Very low taxes: investment in Georgia has far fewer taxes than other European and Asian countries. In this country, the tax on imports of goods in customs is between 0 and 12 percent, corporate income tax for individuals and companies are 20 percent, VAT is 18 percent and property tax is a maximum of 1 percent. According to the report of the World Economic Forum, Georgia ranks ninth in the world in the ease of receiving taxes, and in a way, it can be said that the country of Georgia is a kind of paradise for those who seek to pay low taxes, and this makes investing in Georgia attractive for foreigners.

- Existence of expert and cheap workforce in Georgia: Georgia has a large number of young, talented and expert workforce who often have the ability to speak 3 languages: Georgian, Russian and English. The attractive point for investing in Georgia is that the average salaries and benefits paid in this country are on average less than a fifth of those paid in European countries and other major countries of the world.

- Easy access and low cost of energy: Abundant access to water and electricity sources as well as easy access to gas are among the advantages of this country. On the other hand, the cost of energy in Georgia is on average one fifth of European countries and large countries of the world, which is very effective in the profit of industries and causes proper profitability of investment in Georgia.

Which countries were the main investors in Georgia?

It is very important to know that the first ranks of investment in Georgia belong to the people of those countries, because by considering the behaviour of nations, one can get a good understanding of the behaviour, relations and international and political positions of Georgia. The 10 countries whose investors made the most investments in Georgia are Spain, England, Turkey, China, the Netherlands, and the United States, respectively. It should be noted that the total foreign investment in Georgia was more than $500 million in the first 3 months of 2022, which is more than 4 times that of 2019.

Top fields chosen for investment in Georgia by foreigners

One of the important issues that helps investment in Georgia is to obtain statistics and information about the sectors in which foreign investment has been made, because by studying these statistics, it is easy to identify welcomed and pristine sectors and about the possibility of its expansion. The highest amount of investment in Georgia in the first 3 months of 2022 was in the fields of finance, energy, construction, production, communication, tourism (hotel, restaurant, etc.), transportation, and mining, respectively.

Georgia's economic position is based on statistics released by world-renowned organizations:

- According to the announcement of the World Bank in 2019, Georgia ranks second in the world in the index of foreign investor support.

- According to the announcement of the World Innovation Organisation in 2018, Georgia ranks second in the world in terms of ease of operation.

- According to Fraser Institute, which publishes the global free trade index, in 2019, Georgia is ranked seventh in the world.

- According to the latest announcement of the World Justice Project organisation in 2019 regarding the role of law, Georgia ranks first in the countries of Eastern Europe and Central Asia.

- According to the announcement of the World Bank in 2018, in the index of administrative requirements, Georgia is ranked ninth in the world.

We hope you enjoyed reading this article, if you need free advice on investment in Georgia and Permanent residence in Georgia by investment, the experts of «Sisno Group» are proud to be by your side.