Supporting investment activities in Georgia: from project development to implementation

In addition to economic factors, the legal regulation of investment in Georgia is also of interest. The legislation is focused on the protection of private property, freedom of capital and equal access conditions for foreign and local investors. The possibility to register a company in Georgia in one day, transparent tax system and availability of free industrial areas create conditions for quick launch of projects. The Enterprise Georgia program as well as state support for investments in Georgia strengthen investors' confidence in the sustainability and predictability of the legal framework.

With the growing interest in the region, legal support for investments in Georgia is becoming more and more in demand. Mistakes at the initial stages, improperly executed documents, unrecorded tax risks can lead to losses and blocked projects. Competently built support including allows to optimize taxation, develop an investment agreement, conduct due diligence, and if necessary - to resolve an investment dispute. This article will describe how exactly professional support helps to formalize investments in Georgia, open a business and protect capital.

Investment climate in Georgia

The choice of a country for capital placement begins with analyzing the conditions in which the project will be developed. Georgia has a stable business environment. It combines liberal regulation, a predictable macro-economy and a clear fiscal system. This makes investment in Georgia not just possible, but strategically sound. There are prospects for long-term projects in various sectors, from industry to the digital economy.

The country's economy demonstrates stable dynamics. GDP is growing, inflation is kept within acceptable limits, and public debt remains at a moderate level. Due to the simplified tax model and reduced level of government intervention, Georgia maintains its reputation as a transparent and open jurisdiction. The minimal number of mandatory inspections makes it possible to start investment activities in Georgia without lengthy approvals. This significantly reduces start-up costs and lowers the market entry threshold.

Government initiatives are aimed at boosting foreign investment in Georgia. One of the key programs is Enterprise Georgia. Its objective is to stimulate local production and exports. It includes interest rate subsidies, co-financing for businesses, tax and administrative incentives. In addition, the government provides legal guarantees and special conditions for projects in priority zones. Of particular interest is the mechanism of state support, under which it is possible to get access to infrastructure, land and even state guarantees. This makes the registration of investments in Georgia more predictable and protected.

Sectoral potential: investment opportunities in key sectors of Georgia's economy

The structure of the Georgian economy is characterized by a high degree of openness and diversity of areas for capital investment. This creates favorable conditions for starting investment activities in Georgia, selecting a suitable market segment and structuring an investment deal taking into account current trends. In most cases, a successful project requires not only investment, but also thoughtful legal support of investments in Georgia, especially when entering priority sectors.

Agriculture and agro-processing

Agriculture retains an important role in the economy. The country's geography allows growing a wide range of agricultural products - from grapes to citrus fruits and nuts. Georgia is actively developing exports to CIS, Middle East and EU countries, which makes agribusiness an attractive destination for investors. The greatest potential remains in the production of organic products, animal husbandry and processing. Investments in modern agro-technologies, greenhouse complexes, refrigeration facilities and packaging lines are possible here.

Significant interest is aroused by the registration of investments in Georgia in the direction of processing: jams, juices, wine products. Such projects provide quick access to the foreign market with competent logistics and financial support.

Tourism and hotel sector

Tourism is one of the most dynamically developing areas. The country offers rich natural, historical and cultural resources. At the same time, the domestic hotel infrastructure does not yet fully satisfy demand, especially in the high price segment. This opens up opportunities for the creation of hotels, apartment complexes, spa residences and gastronomic spaces in Tbilisi, Batumi, Kakheti and resort regions. Given the seasonality of the flow and the diversity of locations, the projects can be combined with agritourism and wine routes. Here it is important to obtain legal support in Georgia to properly register the company, obtain permits and structure contractual relations with contractors.

Construction and commercial real estate

With the growing demand for quality space, investments in office and shopping centers, warehouses, co-working and logistics hubs are relevant. Especially promising are investments in commercial real estate in Georgia near the capital region, airports and seaports. Development projects often require foreign contractors, compliance with construction norms and connection to engineering networks, which makes it important to provide legal support for investment projects in Georgia at all stages. Business-class residential projects and mixed-use formats are also in demand. Investors often choose free industrial zones to locate production or logistics complexes, which provides significant tax benefits for investors in Georgia.

Energy and renewable sources

The energy sector is becoming one of the priority areas for foreign investment in Georgia. The country has significant potential in hydropower, as well as in solar and wind generation. Both new power plant construction projects and participation in existing concession schemes are possible here. The peculiarity of this sphere is complicated permitting procedures, the need to conclude agreements with the state, and connection to the national power grid. In this context, it is critical to obtain an operating license and conduct investment due diligence in Georgia, including environmental and technical assessments.

Information technologies and digital services

Georgia is gradually becoming a center for attracting startups and IT companies. This is facilitated by a special tax regime for qualified service providers, the absence of currency restrictions, and a developed digital infrastructure. Investing capital is possible both through the creation of one's own structure and through the financing of technology teams already operating in the country. For such projects it is important to optimize taxation in Georgia, choose the correct form of registration, and use double taxation agreements.

Light industry and production of construction materials

Against the backdrop of growing domestic construction and exports, demand for textiles, packaging, furniture and finishing materials is increasing. Companies located in industrial parks or free industrial zones in Georgia benefit from reduced taxes and simplified customs regimes. Investments in equipment, capacity expansion, logistics and export support are in demand here. To launch such a project, it is necessary to develop an agreement for an investor in Georgia, go through the certification procedure and submit documents for registration under the chosen form of business.

Legal framework for investment activities in Georgia

The current legislation provides guarantees to protect investments, simplify administrative procedures, and prevent unjustified interference by state authorities. Timely legal support of investments in Georgia helps to take into account all regulatory requirements and minimize risks at the start.

Key legislative acts

The basic source of regulation is the Law “On Promotion and Guarantee of Investments”. It sets out the principles of equality between foreign and domestic investors, rules for repatriation of profits, conditions for confiscation of property and the procedure for resolving investment disputes in Georgia. The law protects the investor from unilateral changes in the terms of the investment agreement and provides for the possibility to apply to international arbitration.

The second important normative act is the Law on Licenses and Permits. It defines in what cases it is necessary to obtain a license for activities in Georgia, what documents are submitted and in what terms. When opening a company or introducing a new product, it is this law that forms the basis for administrative interaction with the state.

The third important law is “On State Control over Economic Activity”. Its provisions are aimed at protecting against unlawful inspections, limiting interference by supervisory authorities and establishing a transparent mechanism of inspection control. It establishes the grounds, terms and procedures for conducting control activities, which is especially important when registering a business in Georgia and subsequently operating it. The law ensures predictability and reduces the likelihood of pressure on entrepreneurs.

Regulatory and supporting bodies

The Ministry of Economy and Sustainable Development coordinates the state economic policy. It is responsible for strategic planning, implementation of reforms, and cooperation with international organizations. Under its leadership, the agency Enterprise Georgia operates, which implements investor support programs, facilitates participation in export projects, and provides advice and assistance in registering companies in Georgia. The agency also manages tenders for the placement of production facilities in free industrial zones.

Image caption: Official website of the Ministry of Economy and Sustainable Development of Georgia

An important instrument of interaction with the state in the implementation of large investment projects is the public procurement system. The National Agency for Public Procurement ensures equal access to tenders, publication of information and control over compliance with contract terms and conditions. Participation in such procedures requires legal support of the investment project in Georgia, including verification of documentation, calculation of tax burden and compliance procedures.

International agreements and obligations

International treaties play a special role in legal support of business in Georgia. The country has joined a number of bilateral agreements on mutual protection of investments. These documents guarantee investors access to fair justice, protection from expropriation and free movement of capital. Virtually all such treaties provide for the right to resort to international arbitration, which allows for the protection of investments in the event of a dispute with the state.

Of particular importance is the Association Agreement with the European Union, which provides for the creation of a Deep and Comprehensive Free Trade Area (DCFTA). For an investor, this means harmonization with European standards, access to the EU market and simplified compliance with certification and origin procedures. Participation in this zone requires compliance with labor safety, environmental and accounting standards, which entails the need to obtain legal support in Georgia when implementing a project in the export model.

What forms of investment are possible

The main forms of investment in Georgia can be divided into the following categories:

• Direct investments. Characterized by the investor's active participation in the management of the business. He gets the right to influence the strategy, appointment of management, conclusion of major transactions. This model requires legal support of investments in Georgia, including the development of an investment agreement, distribution of rights and obligations, assessment of financial risks. It is often used in construction, energy, industry.
• Portfolio investment. This is a passive form of participation. The investor acquires securities or shares, but does not interfere in management. Income is formed by the growth of the value of the asset or dividends. It is common in the financial sector, funds and IT. Main legal tasks are assessment of the legal regime of securities circulation, compliance with currency regulation and tax advice in Georgia.
• This category includes the acquisition of commercial spaces, residential properties, and development plots, often linked to construction projects and lease operations. While the real estate sector in Georgia remains attractive, foreign investors should be aware of legal restrictions - particularly regarding the purchase of agricultural land, which is limited for non-citizens. Proper structuring and registration of investments in this field require thorough due diligence, including cadastral risk analysis, legal verification of ownership rights, drafting of contracts, and full legal support throughout the transaction process.
• Venture capital investments. Aimed at high-risk but promising start-ups. Often involves staged financing, options or stakes. Intellectual property protection, competent structuring of the deal, preparation of exit conditions. Applicable in IT, education, biotechnology. Legal support of business in Georgia is required, taking into account international standards.
• Reinvestment of profits. Used by residents or foreign investors already working in the country. Net profit is used to expand production capacity, purchase assets or launch new businesses. Requires consideration in tax planning. Allows to optimize taxation in Georgia, preserving the business management structure without attracting external capital.

Investment project support services in Georgia

Support of investment activities in Georgia covers all stages - from legal analysis and business registration to interaction with state authorities, dispute resolution and management of current liabilities. This is a complex legal work that allows an investor not only to open a business in Georgia, but also to ensure its legal and sustainable operation. Each area requires a separate approach: be it contracts, real estate transactions, obtaining licenses or tax planning.

Pre-investment analysis

Pre-investment due diligence begins with an examination of the legal status of the asset, the ownership structure, the presence of encumbrances and the legality of ownership. When investing in real estate, it is important to assess cadastral data, zoning and compliance with the intended use. At the same time the counterparty is checked: analysis of statutory documents, beneficiary structure, judicial history and financial stability. This is especially relevant when entering into the capital of an existing business or concluding long-term agreements. The reliability of the transaction is assessed based on a combination of factors, including data from local and international registers.

In addition, the regulatory environment in which investment activities will be conducted in Georgia is examined. Licensing conditions, environmental and labor requirements, tax burden, and applicability of international agreements are checked. As part of financial due diligence of investments in Georgia, liabilities are calculated, taxation structure and possible benefits are determined. Such due diligence ensures the legal stability of the transaction and reduces risks already at the stage of preparation for registration. Without it, it is impossible to provide quality support for investments and guarantee their legal protection.

Business registration: stages of legal registration

Effective support of investment activities in Georgia is impossible without correct registration of a lawful entity. This stage is the formal starting point of the project and determines not only its legal framework, but also its control structure, tax regime and management mechanism. In order to register a company in Georgia, it is necessary to determine in advance the format of the business, prepare documents and take into account the peculiarities of national registration.

Step-by-step algorithm of starting a business in Georgia

Opening of companies in Georgia takes 1-2 working days. However, when foreign citizens are involved, apostilization and legalization of documents may be required. At this stage it is important to obtain legal support in Georgia to take into account the nuances of currency regulation, tax status and corporate structure.

Contractual work

After a firm is registered, it becomes essential to formalize agreements between the parties involved. At this stage, effective support for investment activities in Georgia includes drafting comprehensive contractual documentation that safeguards investor rights and clearly outlines the terms of project participation. This typically involves investment agreements, option contracts, non-disclosure agreements, and other critical legal instruments that ensure clarity, legal protection, and alignment of interests among stakeholders.

The investment agreement sets out the rights of the parties, the procedure for depositing funds, the profit sharing mechanism and exit terms. It is important to provide for force majeure, liability and dispute resolution procedures. When an investor enters an existing business, a separate entry agreement is required. It specifies the share, amount of investment, terms, decision-making rights and management features. In the case of international participation, provisions on jurisdiction and applicable law are added to the agreement. All documents are subject to legal expertise. This is the only way to protect investments in Georgia and exclude conflicting interpretations of the terms and conditions.

Real estate and land transactions

Real estate projects require a special approach. Correct registration of rights and compliance with procedures is a key element of investment support in Georgia. Verification starts with cadastral information. The status of the object, type of authorized use, presence of restrictions or disputes is clarified.

Registration is carried out through the registry, with the submission of an application, attachment of title documents and party identifiers. It is necessary to confirm the basis of acquisition: sale and purchase agreement, gift, investment agreement. When investing in construction, the project documentation, contractors' licenses, urban planning conditions are checked.

Lease relations are also regulated within the framework of legal support of investments in Georgia. Lease is used when it is impossible to buy land, especially when it comes to agricultural plots. The contracts fix the purpose, term, procedure of extension, conditions of transfer to third parties. Pre-lease with the right of subsequent purchase is often used. This reduces start-up costs and gives time to launch the project.

Permits and licenses

Many industries require official authorization to operate. It is impossible to start investment activities in Georgia in construction, logistics, medicine, energy, food industry without authorization procedures. The regulatory framework establishes specific activities subject to licensing.

The procedure starts with submitting a package of documents to the authorized body. Registration data, qualification documents, technical conditions, business plan and, in some cases, expert opinions will be required. The authorities are obliged to consider the application within a set period of time.

However, practice shows that it is not easy to obtain authorization. Delays are possible due to the lack of necessary annexes, errors in the form, technical discrepancies. Therefore, lawful support of investment projects in Georgia at this stage allows avoiding bureaucratic failures. A specialist interacts with agencies, controls deadlines and finalizes documents.

Accompaniment in PPZs (if applicable)

Projects implemented in free industrial zones in Georgia receive special lawful and tax treatment. These territories are created to stimulate production and exports. Participants are provided with benefits: zero profit rate, simplified administration, VAT exemption on exports.

To start activities in the PPE, it is necessary to conclude an agreement with the management company of the zone. It specifies the terms of lease, the type of activity, and the obligations of the parties. If necessary, licenses, connection to communications, product certification are issued.

Obtaining resident status involves a preliminary check of the project and compliance with the requirements of the zone. It is important to prepare a business plan, logistics scheme, capital structure. Without legal consulting for business in Georgia, compliance with all requirements becomes more complicated.

Tax and accounting: procedure and support

Financial transparency and accurate accounting is an integral part of any project focused on sustainable growth. Proper record keeping affects the legality of operations, the size of the tax burden and the possibility of participation in state support programs. Therefore, support of investment activities in Georgia necessarily includes tax planning, organization of accounting and control over fulfillment of obligations to the budget.

Georgia offers a transparent and adaptable tax system. The standard corporate profit tax is set at 15%, but it is deferred in cases of reinvestment and only becomes payable upon the distribution of dividends. Value Added Tax (VAT) stands at 18%, though it does not apply to exported goods. The country also provides access to various special tax regimes, including simplified, preferential, and Free Industrial Zone (FIZ) frameworks.

To achieve optimal tax efficiency, it is essential to select the most suitable regime based on the nature of the business and planned operations. This strategic decision is typically guided by a lawyer or tax advisor during the transaction structuring process.

Financial support of investments in Georgia includes organization of accounting. All organizations must prepare reports according to international standards (IFRS). This requires a systematic approach: execution of primary documents, reflection of income and expenses, payroll accounting, tax accrual and reporting. If there is foreign participation or foreign economic activity, accounting becomes more complicated. In this case, an external accountant or consulting group is involved.

The nuances of currency transactions, transfer pricing and intra-group transactions must be taken into account when preparing reports. This is especially important in large transnational projects involving parent and subsidiary companies. As part of legal support for investments in Georgia, a lawyer and an accountant work together to ensure compliance with regulations and avoid sanctions.

Special fiscal regimes for IT, industry and startups

The International Company status is available for IT organizations. It allows for a reduction of profit tax to 5% and employee income tax to 5%. In addition, administration is simplified and social contributions are canceled. To obtain this status, a company must meet the requirements for the origin of income and the type of services provided. The decision is issued by the tax service upon application of the business.

A simplified regime is provided for small enterprises with an annual turnover up to a set threshold. It allows reducing tax to 1% of turnover without mandatory profit reporting. This format is often used when starting a business in Georgia with minimal investments, especially in the sphere of services, trade, and tourism. Startups registered under special accelerator programs can apply for tax deferral, hiring subsidies and mentoring services. This allows starting a project with a lower fiscal burden and structuring a deal in Georgia in a flexible format.

Regimes are in place for the manufacturing sector to encourage exports. Investors can be exempted from income tax and VAT when selling abroad. These measures make it possible to optimize taxes in Georgia, especially in cases where the company supplies products to the EU or neighboring countries.

Conclusion

The investment process in Georgia is based on accessibility, flexible regulation and support from the state. The country has a transparent business registration system, tax preferences, state and international capital protection guarantees. A developed legal framework, participation in international agreements, free industrial zones and support programs - all this forms a stable investment climate in Georgia.

However, even with formal simplicity, many projects face legal and administrative barriers. Mistakes at the registration stage, unreasonable contractual terms, improperly registered real estate, violation of tax requirements - all this causes direct financial losses. Only professional support of investment activities in Georgia allows avoiding such risks. A comprehensive approach of a lawyer ensures legality, predictability and economic efficiency of investments. Our team of specialists offers not only the execution of documents, but also an in-depth legal strategy that will ensure the sustainability of business in any sphere. From project analysis to defense of interests in court, we accompany the investor at every stage.