Hualing Kutaisi Free Industrial Zone: Best-Priced Hub for Offshore Companies in Georgia

Why do we advise the registration of companies in Georgia’s free industrial zones of Kutaisi, Poti, and Tbilisi? Because it is obvious that this option is an excellent ROI for investing and starting a business of any size. The best proof is the rapid growth of new companies in Georgian FIZs. Their owners enjoy tax exemption and attractive terms for investments in production and trade. Each of the free zones has specific strengths and weaknesses. Let’s see what could interest you as a potential investor in the Hualing Kutaisi FIZ?

Reasons to resort to our assistance in the registration of offshore companies in Georgia (Hualing Kutaisi FIZ) 

If you are determined to register your company in a Georgian FIZ, we recommend that you first contact us for a one-on-one consultation on the right FIZ selection. Our local partners in Georgia will help you in a variety of issues on a case-by-case basis. Here are some examples of what they can do for you:

• register a tax-free company that will be most appropriate for the specifics of your business
• open your corporate and personal accounts with banks in Georgia (this exclusive service is available only to our clients)
• select qualified personnel and rent an office on very attractive terms
• prepare and conclude employment contracts
• make arrangements for cost-effective company administration 
• obtain construction licenses in any of the free industrial zones in Georgia
• obtain the “MADE IN GEORGIA” national certificate of origin for duty-free supplies to the European Union.

We can also take over and deliver other arrangements for your effective business in Georgia. You will be able to monitor them remotely, without any need to travel to the country. This means we will save your time, money, and efforts by performing on your behalf all your tasks and catering to your needs.

Reasons behind the Hualing Kutaisi Free Industrial Zone’s popularity with foreigners wishing to open offshore companies in Georgia 

For 3 years in a row, Georgia has been on the list of the Top 10 countries in the World Bank Doing Business 2020 ranking. This means that even foreigners with no skills in the Georgian language can open a company within a couple of days, remotely (by proxy issued to a local agent).

The main benefits of registration of offshore companies in the Hualing Kutaisi FIZ, Georgia, can be summed up as follows:

• there are no restrictions as to the choice of the business structure (LLC, GP, LP, JSC, Cooperative, IE) to start in the Hualing Kutaisi FIZ
• owners can launch any business activity, except for the production of and trade in arms, narcotics and other psychotropic substances, nuclear and radioactive substances, tobacco, and excise goods
• the best-favored projects are in the fields of Manufacturing, BPO & IT, Energy, Hospitality
• 100% foreign ownership of the company is allowed
• there are no requirements for the minimum investment or initial capital 
• 100% repatriation of profits is allowed
• there are no restrictions on international trade 
• the import/export tax (of 4%) is levied only on profit from trade operations with the mainland Georgian companies 
• manufacturers enjoy tax-free trade regimes and are exempt from customs duties in EU, CIS regions, and Turkey
• there is no requirement to hire local residents
• there are no restrictions as to the minimum staff number, only 1 person can work in the company, even if this is the founder
• operational costs in the Hualing Kutaisi FIZ are the lowest in Georgia (around 30% less than in Tbilisi), including the rent tariffs of warehouses and industrial facilities, fees for licenses, services, and offices, 
• Georgia is not included in the black lists of offshore jurisdictions, though it promotes the legal tax exemption and offers allowances for companies registered in its FIZs
• Georgia maintains an open register of business founders, but does not and will not exchange financial information under the CRS; therefore, confidentiality is a very attractive advantage for UBOs of offshore companies set up in the Hualing Kutaisi FIZ
• the “Made in Georgia” Certificate of Origin for products manufactured by the FIZ companies can be obtained through a very fast procedure.

The Georgian government has set 2 priority goals: to establish itself as a leader on the trade route between Asia and Europe; to become a full-fledged member of the EU. To achieve them, it certainly needs significant investments. Therefore, it maintains Free Industrial Zones promoting business friendliness and tax reliefs on corporate profits, property, imports, VAT, and dividends. 

The Hualing Kutaisi Free Industrial Zone for offshore companies in Georgia: the location 

Kutaisi is an important, strategic city that was the seat of the Georgian parliament in 2012-2018. It rests on the banks of one of the largest rivers in the Caucasus – Rioni, which flows into the Black Sea in the port of Poti.

Kutaisi is centrally located in the country, 220 km to Tbilisi, 100 km to Poti, 150 km to Batumi, 200 km to Sukhumi, 100 km to Zugdidi. The population of the city is about 150,000 people, which makes it the second-largest city in Georgia. The local high-skilled, competitively priced professional workforce is a very important strength of the region. This was one of the reasons why Georgia’s first electric car production plant was established in Kutaisi. Its launch has been postponed because of the pandemic, but will soon be delivered.

The Hualing Kutaisi Free Industrial Zone for offshore companies in Georgia: the background

In 2007,  Mi Enhua, the president of the Group Corporation, visited Georgia. This visit has become a landmark for the Chinese investments in the country, with the Hualing holding remaining the largest investor in Georgia. It has already invested over 0.5 billion dollars in the country’s economy.

The Hualing Group invested in the Kutaisi Free Industrial Zone establishment and turned it into a mature logistics hub. The territory of the FIZ used to be an old car factory during the post-Soviet period. The investor is restoring the old facilities for the purposes of attracting industrial projects, export/import traders of raw materials, as well as for improving the parking and container storage capacities of new companies. Since May 2015, The Hualing Kutaisi FIZ has been fully owned by the Hualing Group. According to the agreement signed by the Georgian government and this Chinese corporation, the company rented 359,251 m2 of land for 30 years.

The Hualing Kutaisi Free Industrial Zone has already attracted over 150 companies engaged in production and trade operations in a variety of fields – from woodworking and furniture production to the manufacturing of plastic products and solar panels.

The Hualing Kutaisi Free Industrial Zone for offshore companies in Georgia: the specifics

The 4 Free Zones in Georgia (Tbilisi, Poti, Kutaisi, and Kutaisi-Hualing) are equally attractive because of their tax-free regimes. You can open similar companies and accounts in any of them. However, investors who want to organize production or trade-in Georgia can expect a number of challenges. For example, it is very difficult to find free warehousing capacities near the seaport in the Poti FIZ, and there are no plans to build new storage facilities there in the near future. For many people who want to export goods by sea, this fact is the key consideration in favor of the Hualing Kutaisi Free Industrial Zone. Besides, the government is planning to build a cargo terminal at the Kutaisi airport.

Since the complex was founded on the site of a former car factory, there is virtually no area to rent for construction purposes, and the storage quality is far from international standards. That is why, if your company needs large areas for the construction or upgraded quality storage facilities, you should choose the Tbilisi FZ, where new Class A warehouses are available, or Poti, where more than 100 hectares of land are available for tenants.

Therewith, the Hualing Kutaisi FIZ features many ready-made premises for production, and the cost of the license here is lower than in the Tbilisi FIZ.

The Hualing  Kutaisi Free Industrial Zone for offshore companies in Georgia: the lowest costs for tenants and business owners

The Hualing Kutaisi FIZ is a great option for small/medium businesses whose priority need is to have a direct access/link to the Georgian highway network. This Free Industrial Zone offers the most competitive rates for renting warehouses and office spaces, as well as company registration in general. You can get updates on its tariffs and charges, including the license fees, by contacting us.

The Tbilisi FZ is a comprehensive logistical hub, where air, road, and rail routes go. The Poti FIZ is convenient for export/import supplies by sea and for renting warehouses. The Hualing Kutaisi FIZ is an excellent option for trucking and fast handling/transit of goods to the sea port. The nearby European route E60 is part of the East-West autobahn. And in the near future, the new cargo terminal will appear at the local airport turning into a sorting and redistributing hub, yet one more beacon for attracting more businesses into the region.

The Hualing Kutaisi Free Industrial Zone for offshore companies in Georgia: the banking sector’s value add-ons

The country’s great commercial and logistical potential has been bolstered by a liquid and reliable banking sector oriented toward foreign clients. Although Georgian banks have recently significantly tightened their requirements for non-residents, with our help you will be able to get corporate and personal accounts with a local bank smoothly, at reasonable rates, and in due time.

The advantages of Georgian banks are:

• low-cost banking service
• variety of banking services, including those meeting the remote account management needs
• no need to freeze funds in case of a minimum balance
• fast international transfers due to the extensive global correspondent banking network and the IBAN
• English-speaking interface in online banking, some other languages are also available
• secure banking confidentiality
• absence of currency regulation.

The above-mentioned strengths and the zero-tax incentives have made the Hualing Kutaisi FIZ very popular with foreign investors. For this reason, many of them choose Georgia as a jurisdiction for company registration, tax optimization, and asset growth.

Where to start registration of offshore companies in Georgia or how to choose the best Georgian FIZ?

China’s investment in the Hualing Kutaisi FIZ has inspired hundreds of investors. Enterprises of all sizes successfully manufacture and ship products from all Georgian FTZs to Europe and Asia on a duty-free basis. There is no corporation tax, and the easy registration in any free industrial zone in the country allows you to quickly start implementing your business needs. You are welcome to contact our local professional consultants and lawyers in Georgia with particular questions. They will discuss with you all your main issues of choosing the right FIZ, offer solutions, and plan further prompt steps. Here is what we can do for you:

• design the ownership structure and prepare the application/incorporation documents
• register an offshore/tax-exempt company in the chosen Georgian FIZ
• open your corporate and personal account(s) with Georgian banks
• choose and lease land on the most favorable terms
• – obtain the construction license
• obtain the manufacturing license and the national “MADE IN GEORGIA” certificate.