News: Registration of a Company in the Free Industrial Zoneof Tbilisi
A Free Industrial Zone is a relatively new phenomenon in the post-Soviet area. Each of the former republics of a formely great country chose an independent path of political and economic development. Georgia was one of the first to offer a widely accepted form similar to an offshore. This is the registration of a company at a Free Industrial Zone in Tbilisi, Georgia. A distinctive feature of the Free Industrial Zone is a high transparency of business and state control, compared to the classic «tax havens». This fact allows you easily conduct your business on the most favourable terms, without risking business reputation.
There are three Free Industrial Zones in the territory of Georgia, the most attractive of which is the registration of a company in the Free Industrial Zones of Tbilisi.
How does the Free Industrial Zone in Tbilisi function?
A favourable geographical position of Georgia, located on the eastern coast of the Black Sea, opens up broad transit opportunities for goods and cargo flows from Europe to the regions of Asia Minor and the Far East. A company registration in Tbilisi is beneficial in all respects. In addition to international freight traffic, production located in the territory of the state itself is concentrated in the Free Industrial Zone of Tbilisi.
Established in December 2015, this Free Industrial Zone became the first in Eastern Georgia. The strategic advantages of the Zone are its location - directly at the borders of the capital of the state - Tbilisi, which occupies a strategic position on the communication routes in the South Caucasus and Asia Minor. The opening of a company in the Free Industrial Zone of Tbilisi is aimed at attracting international investments into the country, convenient for the development of international trade.
The following factors are taken into account when establishing a Free Industrial Zone:
• Geographical location;
• Stability of a developed infrastructure;
• Proximity of an international airport, railways and highways;
• Developed banking sector;
• Preferential trade treatment.
Infrastructure of the Free Industrial Zone of Tbilisi
The territory of the Zone is spread over the area of 17 hectares. It is located in the immediate proximity to the international airport of Tbilisi, a cargo transport artery. It is only 17 kilometers away from the centre of the capital. The Zone is divided into 28 unequal areas of 2000 m2, which, at the request of an investor, can be combined. Each of the plots can be rented for up to 50 years.
A 24-hour private security service and a customs control centre allow all production and transport operations to be carried out without leaving the zone. The configuration of the location of certain sections provides access to each of them without affecting the interests of neighbours.
The territory of the zone, governed by the legislation of the Republic of Georgia on free industrial zones, tax and legal jurisdictions that comply with the requirements of international legislation and a specially created comfortable environment that meets international standards, is most suitable for investors to give them opportunity to remain competitive and successful players in the world market.
A company registration in a Free Industrial Zone of Tbilisi
In addition to a convenient location, opening a company in the Free Industrial Zone of Tbilisi has the following advantages:
- Fast registration of a company of any form of ownership in the territory of the Zone;
- Zero tax rate for most activities;
- A wide range of choices of world currencies for payments;
- Lack of compulsory licensing for most types of activities, except for those specifically stipulated in the legislation of Georgia;
- Autonomy from the local municipal authority in the territory the zone is located;
- Lack of restrictions on the property of foreign investors;
- Lower rental rates compared to the rest of the Republic;
- Reduced utility rates.
Priority areas for the Free Industrial Zone
The specialization of the Zone in question and the registration of a company in the Free Industrial Zone of Tbilisi provides for the following activities:
- Logistics;
- Storage of goods;
- Data processing;
- Light small-scale production;
- Refrigerated food storage;
- Household goods;
- Pharmaceutical production;
- IT technology;
- Rental of virtual offices.
In accordance with the legislation on the Free Industrial Zones, storage and production of the following items are prohibited:
- Weapons;
- Poisoning substances;
- Sources of ionizing radiation;
- Psychotropic and narcotic substances;
- Tobacco.
Opening a company in the Free Industrial Zone of Tbilisi
Registration of a company in Tbilisi has a number of preferences that are characteristic of offshore zones. First of all, companies of the Free Industrial Zones of Tbilisi, Georgia have tax exemptions:
- Zero corporate tax rate;
- Exemption from taxation of dividends and interest from the activities of companies;
- Exemption from VAT on export of products manufactured on the territory of Tbilisi Free Zone (hereinafter referred to as TFZ);
- Exemption from unauthorized access when conducting trade operations from the TFZ;
- Exemption from taxation on property and land located on the territory of TFZ;
- Exemption from income tax for employees of enterprises registered in this structural agglomeration;
- The enterprises are not responsible for the returnable VAT.
The only burden that the companies of the Free Industrial Zone of Tbilisi, Georgia have is the 4% tax levied on enterprises registered in the Free Industrial Zone of Tbilisi that trade with enterprises registered and operating in the Republic of Georgia, as well as a license fee. The tax is calculated on the basis of the invoice value of goods produced or services rendered.
Registration of a company in the Free Industrial Zone of Tbilisi, Georgia differs from classic offshore companies in the fact that business entities registered on its territory are fully capable of opening accounts in local Georgian banks. Both residents and non-residents can conduct operations remotely, by power of attorney. There are no restrictions on legal entities or individuals.
Services for opening a business in the Free Industrial Zone
In the territory of the Free Industrial Zone services are widely represented, including services for non-residents, who do not speak the state language in obtaining licenses for:
- Provision of services;
- Trade;
- Domestic production;
- Logistics services;
- Storage;
- IT services;
- Financial and legal advice.
An increasing number of non-residents from the countries of the former Soviet Union are seeking to open a business in the Free Industrial Zone of Tbilisi, Georgia, who are looking for legal ways to reduce the tax burden that restricts business development in their countries. The advantages include the multinational composition of the state and the widelyspoken Russian language, as the language of international communication, familiar to most residents of the post-Soviet area. Traditional hospitality will not create problems with business, regardless of the nationality of an entrepreneur.
Tbilisi
