- Free Industrial Zones (FZ) in Georgia: the mission and legal status
- The Tbilisi Free Zone (TFZ): the big picture
- Who can register a business in Georgia in the Tbilisi Free Zone (TFZ)
- Requirements to consider when you register a business in the Tbilisi Free Zone (TFZ)
- Your advantages after you register a business in the Tbilisi Free Zone (TFZ)
- Documents required to register a business in the Tbilisi Free Zone (TFZ)
The Free Industrial Zones (FZ) in Georgia welcome international export-oriented entrepreneurs to register new businesses and boost their competitive advantages. The Georgian TFZs are very similar to classic offshore tax havens by the generous taxation regime and unfailing commitment to banking privacy.
This article zooms in on the virtues of the Tbilisi Free Industrial Zone (TFZ) where manufactures, service providers, and traders from all over the world have registered hundreds of legal entities. Learn how you, too, can also register a business in Georgia remotely and save on taxes, logistics, accounting, and banking. Our experts will be glad to take care of the time-consuming paperwork, application formalities, and arrangements, so that you could soon launch high-margin products and maximize your profits in international markets.
By opening businesses in the Tbilisi Free Zone, international tenant companies get access to the zero-rate taxes, low cost utilities, inexpensive highly skilled labor, flexible tenancy terms, advanced infrastructure, and other benefits. Besides, they obtain the “Made in Georgia” national certificate for their products and ship them to the global markets of over 1 billion potential consumers.
Our extensive experience, professional local lawyers, their excellent knowledge of the national legislation in Georgia will save you time and resources. You are guaranteed access to the high-quality international business development tools and solutions available to all TFZ companies. This turn-key service price starts from 4000 EUR and depends on your choice of the shareholders’ profile, the license type, the bank account.
Free Industrial Zones (FZ) in Georgia: the mission and legal status
Years ago, when Georgia decided to create several Free Industrial Zones (Law No. 5175 of July 3, 2007), the main goal was to attract foreign investments and trigger its GDP growth. The idea was to allocate certain land plots in Georgia where foreign investors and residents wishing to register businesses could develop their projects in the most favorable environment. As a result, the Georgian government has paved the road for the inbound foreign capital. The TFZs operate under the Law “On Free Industrial Zones” – the framework for regulatory incentives, permits, allowance, and norms for the registered businesses.
The Law “On Free Industrial Zones” in a snapshot:
- A Free Zone can be established in any area exceeding 10 hectares.
- Free Zones can be established by the government or a legal entity.
- Only the Georgian government can take the decision on establishing a Free Zone.
- A legal entity acts as the Organizer in charge of the infrastructure and the full functioning of the Free Zone.
- The land allocated for the creation of a Free Zone can be leased out for up to 59 years or transferred to a person with the right of ownership or the right of development/superficies.
- Companies of any form of ownership are allowed to register in Georgian Free Zones.
- Settlements within a Free Zone are effected in any currency.
- No income tax is levied on export revenues.
- Exports of goods and any transactions within a Free Industrial Zone are not subject to VAT.
- There is no property tax.
- Imports of goods produced outside the zone by companies registered in the Georgian Free Zones are exempt from import tax.
The Tbilisi Free Zone (TFZ): the big picture
The Tbilisi Free Industrial Zone (TFZ), is the best place in Georgia for registration and development of international businesses. Entrepreneurs are offered land, warehouses, office spaces, as well as access to advanced infrastructure (utilities, motor roads, customs clearance points). Company founders do not have to spend time and resources to resolve organizational issues. The TFZ Organizer has prepared the business friendly environment and advanced turnkey solutions.
Tbilisi Free Zone (TFZ) Specifications:
- Date of establishment – 30 November, 2015
- Legal framework: Government Resolution # 549 of 26 October, 2015
- Area: 17 ha
- Organizer: Georgia Tech Park Ltd. (100%)
- Beneficial owner: BitFury Group (Netherlands)
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Who can register a business in Georgia in the Tbilisi Free Zone (TFZ)
- Resident and non-resident private persons
- Resident and non-resident legal entities
Requirements to consider when you register a business in the Tbilisi Free Zone (TFZ)
All business structures stipulated by the Georgia legislation are eligible for registration in the TFZ:
- Individual Entrepreneur (IE)
- Limited Liability Company (LLC)
- Limited Partnership (LP)
- Branch office
- Joint Stock Company with the minimal charter capital of GEL 15,000
- General Partnership.
Any activity not prohibited by Georgian law is allowed in the TFZ, except for the following ones specified as the “banned activities”:
- production of and trade in weapons
- production of and trade in nuclear, radioactive materials
- import, storage, production, and sale of narcotic drugs and psychotropic materials
- import, storage, production, and sale of tobacco product or raw tobacco materials
- the use of the premises for dwelling purposes
- import, storage, production, and sale of excise goods.
Your advantages after you register a business in the Tbilisi Free Zone (TFZ)
Taxation advantages:
- TFZ businesses are exempt from the Corporate Income Tax (15%).
- Dividends and interest paid by TFZ businesses are tax-free (5%).
- Trade between the TFZ businesses is VAT-free (18%).
- No property tax (1%).
- No import tax on goods from other countries (up to 18%).
- No export tax on goods to other countries (up to 18%).
However, TFZ businesses are subject to pay:
- the Retirement Fund contributions
- the import/export tax on goods traded in Georgia (4%)
Operational advantages:
- the most reliable high-quality infrastructure of all Georgian FZs (warehouses, offices, round-the-clock customs clearance, roads, parking, utilities)
- flexible tenancy terms, the opportunity to rent any land plots (from 50 sq.m. to several thousand sq.m.), month-to-month lease plans are allowed
- low tariffs on utilities and communications (18% cheaper because they are VAT-free)
- competitive skilled labor costs
- facility management service
- low accounting costs (employees are responsible for paying PIT and filing tax returns)
- eligibility to the “Made in Georgia” national certificate and tax-free export of goods to EU, CIS, EFTA, UK, Ukraine, China, Turkey, Hong Kong
- no currency control, inexpensive banking fees.
Logistics advantages:
- location in the capital of Georgia
- access to the E60 highway (77km to the Krasniy Most boarder post between Azerbaijan and Georgia)
- 33 km to the Shota Rustaveli Tbilisi International Airport (TBS) and its cargo terminal, 14 km to the cargo-handling railway station, 324 km to the seaport in Poti.
With regard to the disadvantages of registering a company in Tbilisi FZ, the lease of land plots in Tbilisi is the most expensive tenancy arrangement of all the Free Industrial Zones in Georgia. However, the higher tariffs are justified by the prime quality of the infrastructure, more flexible tenancy terms, and payment plans. Only in the TFZ can you pay the rent per month, while in other TFZs the payment is charged per year.
Given all the strengths and favorable conditions for doing business in the TFZ, there is little wonder that the Tbilisi Free Zone has attracted hundreds of entrepreneurs from different countries and industries. They come to register businesses in Georgia and are very happy to discover advantages of the FZ in the capital city of Tbilisi. Among them are the Ukrainian and Azerbaijani logistics companies, an Indian pharmaceutical company, textile companies from Turkey and Pakistan, and, of course, the BitFury data center (with the capacity of 40 MW).
The Tbilisi Free Industrial Zone is particularly popular with manufacturers exporting pharmaceuticals, textiles, jewelry. Logistics companies and production facilities that depend on cost-effective power resources have also recognized the supremacy of the TFZ.
Documents required to register a business in the Tbilisi Free Zone (TFZ)
A foreign person intending to register a business in Georgia (TFZ) needs to submit the following notarized copies of documents:
- Passports of the new TFZ company founder(s)
- Minutes of the Board meeting about the TFZ business establishment
- Consent of the person to be appointed as the Director of the TFZ company
- Passport of the founding partner(s) of the new TFZ company
- Passport of the person to be appointed as the Director of the new TFZ company
- Articles of association
- Consent to register the company’s legal address in the TFZ (issued by Georgia Tech Park Limited)
A foreign legal entity intending to register a business in Georgia (TFZ) needs to submit the following notarized copies of documents:
- Passports of all the foreign legal entity founders
- Extract about the foreign legal entity’s incorporation issued by the relevant foreign authority
- Resolution of the foreign legal entity to register a new TFZ business in Georgia
- Consent of the person to be appointed as the TFZ business Director
- Passport of the person to be a founding partner of the new TFZ business in Georgia
- Passport of the person to be appointed as the TFZ business Director
- Articles of Association of the new TFZ Company
- Consent to register the company’s legal address in the TFZ (issued by Georgia Tech Park Limited).
Most of the founders of businesses in the Tbilisi Free Zone are private persons. They are required to submit fewer documents than the legal entities. Besides, the founding companies have to disclose their ownership details, including the ultimate beneficial owners’ data.
You will not have to collect and prepare all the above-mentioned documents if you order our professional assistance. We will agree with you and prepare the incorporation documents for your new business. All you will need to do is forward to us the following documents.
- If you are a private person wishing to register a business in the TFZ, Georgia – the notarized copies of passports of the founding partner and the Director;
- If you are a legal entity wishing to register a business in the TFZ, Georgia – the notarized copies of passports of the person to be a founding partner and the Director of the new TFZ business in Georgia; the Articles of Association; the extract about the foreign legal entity’s incorporation issued by the relevant foreign authority; if the founding partner is another company – its incorporation documents.
If you want to get the most out of your new business, you should register it in Georgia in the Tbilisi Free Industrial Zone – the most favorable environment for entrepreneurship right in the capital city.
Please contact us at our e-mail address: info@offshore-pro.info. We will be happy to discuss with you all the details and answer questions about the specifics of running a business in the Free Zones in Georgia.
Can foreigners register businesses in the Tbilisi Free Industrial Zone (TFZ), Georgia?
Yes, foreigners can register businesses of any type in the Tbilisi Free Zone. The simplest way is to register an LLC.
Where is the Tbilisi Free Industrial Zone (TFZ)?
Tbilisi Free Zone is located in the Gldani district of the capital city of Georgia.
What is the advantage of the Tbilisi Free Zone (TFZ) over other tax-free zones in Georgia?
The Tbilisi Free Industrial Zone (TFZ) features the most advanced infrastructure of all the tax-free zones in Georgia and offers much more flexible policies (for example, the attractive lease terms).
