Georgia is an aspiring economic centre of the Caucasus. Located at the boundaries of the continents of Eastern Europe and Western Asia, it boasts years of robust economic growth and is considered one of the most credible economies of Europe and Central Asia.
With a geographically advantageous location and availability of natural resources, Georgia has always been appealing to foreign traders, investors and entrepreneurs. It has been ranked 6th in ease of doing business by the World Bank with a GDP growth of 4.8%. Considered as one of the most reliable economies of the world, it stands as the perfect destination for you to set up a business.
Taxation in Georgia
The tax rates are comparatively low and special tax rules are applicable to some of the foreign investments. Taxes in Georgia are all unified under the Tax Code and the authority of collection of taxes rests in the hands of Georgia Revenue Services.
Georgia currently holds 55 DTA (Double Taxation Avoidance) Agreements, which means that double taxation is exempted during the import-export process. This turns out to be another appealing feature to the business investors.
Now, in Georgia, only income received from Georgian sources is taxed on their profit produced in the country and not on the revenue generated. So there exists no imposition of payroll taxes, social security contributions, and wealth or insurance taxes. The taxes imposed in Georgia are:
- Corporate profit tax of 15%
- A value-added tax of 18%
- Personal income tax: 20%
- Import tax: with differentiated values of 0%, 5% or 12%
- Property tax: up to 1%
Thus, you can see that only property tax is levied on a local level while all the other taxes are applicable at a national level. There exists no imposition of payroll taxes, social security contributions and wealth or insurance tax. Moving ahead, let’s have a glance at the tax advantages in Georgia.
Tax Advantages in Georgia
By investing in Georgia, you can avail the following benefits:
1. Free Industrial Zones (FIZs)
- No corporate tax
- No income or profit tax
- 0% property tax
- Reduced VAT rates
Now, if any business entity operates or deals with other entities outside the FIZ, a 4% on the market price of the goods supplied to a person registered under the Georgian law is to be charged.
2. Special Trade Company
- Can sell and re-export foreign goods
- Exempt from profit tax on income from selling and re-exporting foreign goods
3. International Financial Company (IFC)
- Conducts business outside Georgia
- Located outside any FIZ
- Profit received from financial services is exempt from profit tax
- The company is penalised if the income exceeds 10% of gross income
4. Customs Regime for Export Companies
All Georgian companies producing goods for export can apply for a special Internal Processing Customs Regime license which permits the import of raw materials used for the production of goods without paying customs duties and VAT.
Thus, the region provides numerous benefits to foreign investors, encouraging them to establish a business in Georgia. If you are interested in incorporating a company in Georgia, we at Business Setup Worldwide can help in providing an effective solution to your problem. Our advisors in Georgia will provide you customized solutions according to your needs. Contact us today to know more.
