Georgia Capital Tbilisi Currency Lari (GEL) Language Georgian, Russian, Armenian Population 4.66 million EU status Non-member GDP 2006 $5.72 billion Employment 87.4% Exports $1.761 billion f.o.b. (2006 est.) Imports $3.32 billion f.o.b. (2006 est.)

Setting up business Number of days to start business 16 Cost (% of income per capita) 10.9% Nonwage labor cost (% of salary) 20% Total tax rate (% profits) 37.8%

 

Georgia

Tbilisi, the Georgian capital

Georgia is a fast-developing economy located in the Caucasus region of South- Eastern Europe. Whilst the economy has a strong service sector, generating some 54.8% of GDP, the agricultural sector, which generates 17.7% of GDP, nevertheless employs some 40% of the workforce, indicating considerable scope for improvements in efficiency. Industry accounts for 27.5% of the economy, employing some 20% of the workforce.

Business reforms paying off

Having taken several years to emerge from the post-Soviet economic slump, business conditions are now rapidly improving to create a more open, attractive climate for investment. In September 2006, the World Bank’s “Doing Business 2007” report ranked Georgia 37th overall – an improvement of 75 places from last year, when it was ranked 112th. According to Caralee McLiesh, one of the founders of the “Doing Business” report, Georgia has “improved its business start-up procedures, dramatically improved its customs procedures, introduced specialized courts, streamlined labor regulations, introduced a credit bureau, and cut the number of licences [needed to start a business] enormously”. The huge improvement in the country’s rankings just shows how far a country can go if it’s committed to change, she said.

The changes are already paying off – in 2006 the number of businesses registered in Georgia was up by 55%, and unemployment fell by 2%.

Why Georgia ?

According to the Invest in Georgia agency, the country’s advantages include:

• Strategic location between Europe and Asia;
• EU neighboring country;
• Access to CIS markets;
• Democratic & liberal policy;
• Competitive export regime;
• Liberal and simplified tax code;
• Qualified, motivated and cheap workforce;
• Attractive operating and living costs;
• High-potential agricultural sector;
• Good logistical, transport and communications infrastructure.

Opportunities

Privatization of the state economy is ongoing in Georgia. In addition to opportunities in the areas being privatized, Georgia is encouraging foreign capital involvement in a wide range of areas, including industry, agriculture, financial services, transport, telecommunications, energy, tourism and construction.

Energy sector in transit

Energy transit is set to be a major source of income

Georgia has no energy reserves itself, and is largely reliant on Russia for its oil and gas. However, it is set to play a major role in the development of the international energy infrastructure as a transit point for oil and gas, and transit fees from the Baku- Ceyhan oil pipeline, and the Baku-Erzerum gas pipeline, which both run via Tbilisi, are expected to play an increasingly important role in the economy. There is a possibility that these fees may be paid in kind, leading to a need for increased storage and transfer capacity within Georgia itself. In addition, Georgia’s existing domestic energy infrastructure is mostly inefficient and in need of updating, providing further opportunities for FDI involvement. Georgia is seeking to move away from its reliance on Russian oil and gas, and from fossil fuels generally, as these have to be imported, by investing in alternative energy sources, including hydroelectric power.

AMCHAM Georgia

The American Chamber of Commerce in Georgia aims to promote the development of commercial relations between Georgia, the United States of America, and the international community in Georgia. Established in 1998, the Chamber promotes its goals by establishing relations with key policy makers and appropriate governmental bodies in both the US and Georgia on subjects of interest to its members. Additionally, the Chamber collects and disseminates timely information concerning areas of interest, organizes conferences and seminars, works on legislative initiatives of concern to the business community in Georgia, and most importantly, provides an ongoing forum for members of the American business community to gather to share knowledge, experiences, problems and solutions.

 

Contact Information

American Chamber of Commerce in Georgia
1 Nustubidze Street
Tbilisi 0177
Georgia
Tel: +99 53 231 2110
E-mail: amcham@amcham.ge
Website: www.amcham.ge

 

Useful websites

georgia.usembassy.gov	US Embassy in Georgia
www.investingeorgia.org/en	Government Investment Promotion Agency
www.privatization.ge	Ministry of Economic Development
www.georgica.caucasus.net	Tourist information

 

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