4,933,674 (July 2021 est.)


Georgia (Sakartvelo) is a republic in Eastern Europe/Asia, on the east coast of the Black Sea in the Caucasus. The country has 4 land borders: Russia, Turkey, Azerbaijan, and Armenia. Even though the country is located partly in Asia, the local culture is more European than Asian.

The Georgian Government has shaped Georgia’s economic policy to be based on the principles of a free market economy which includes:

  • The protection of property rights.
  • Free competition.
  • Freedom for the private sector under an effective and transparent government.

The Georgian Dream Coalition is generally seen to be business and investor friendly and is committed to devising major economic and fiscal policies to help liberalise and improve the Georgian economy.

Key recent legislative amendments affecting doing in business in Georgia are as follows:

  • Launch of public and private partnership system. The aim of this was to establish a unified legislative and institutional framework for public and private partnerships (PPP) in Georgia. A long-awaited PPP law was finally adopted by the Parliament of Georgia in May 2018. Effective from 1 July 2018, the new law sets out the rules governing PPP processes, starting from the evaluation and announcement of the project up until selection of the investor and monitoring the compliance with its PPP commitments. The law differentiates between concessions and non-concession PPPs, institutional and non-institutional, small and regular PPP projects. The law further acknowledges the role and interests of lenders financing a PPP project and provides for the possibility of granting step-in rights and other guarantees to the lenders through direct agreement with the public partner. For the purposes of establishing complete regulatory basis for PPP, the rules for adoption and performance of PPP projects, regulations on resolving disputes arising out of the investor selection stage of PPP projects and statutes of the responsible PPP Agency were respectively approved. Therefore, modern PPP legislative framework is finally in place to, hopefully, boost the public private co-operation in Georgia.
  • Major pension reform. In July 2018, the Parliament of Georgia adopted the Law on Accumulative Pension. In brief, the new law introduces a modern approach to accumulative pension funds sourced through the contributions made by the employee, the employer and the state to supplement the existing social pension package. According to the new pension scheme, employees will pay 2% of their monthly gross salaries towards their pension, while employers and the government will add another 2% each. Self-employed citizens will pay 4% of their annual income. Notably, if an employee’s annual gross salary exceeds GEL24,000, then the government will only pay 2% on income up to GEL24,000 and 1% on the income that ranges from GEL24,000 to GEL60,000. No contribution is made by the state to benefit employees that have an annual gross salary in excess of GEL60,000. Funds paid to the accumulative pension fund are exempt from personal income tax.

The accumulated funds will be managed and invested by the State Pension Agency (SPA) or an asset management company to be contracted by the SPA to ensure reasonable returns on such funds through investment in financial and non-financial instruments.

The new system was launched on 1 January 2019 and is mandatory for legally employed persons under 40 years of age, meaning that they will be enrolled automatically. The system will be voluntary for persons above 40 years of age, as well as for self-employed citizens. The funds accumulated on an individual pension account may be received on retirement as:

  • a lump sum, provided that the participant joined the pension system at least five years prior to retirement;
  • monthly payments allotted proportionally to the statistical life expectancy of the individual; or
  • insured permanent pension payments from acquired annuity insurance product.

Amendments relevant to the financial sector and issuance of loans. On 21 July 2018, the game-changing amendments to the Civil Code of Georgia entered into force tackling the problem of the abundance of loans among individual lenders. Loans issued to natural persons by individual lenders or entities not supervised by the National Bank of Georgia may no longer be secured with immovable property (other than loans issued in exchange for the right to use the property) or vehicles. Repeated breaches of such restrictions are liable to a sanction of GEL10,000 per occurrence. Where security for the loans issued to individuals is allowed, foreclosure of the security will be considered to have fully satisfied the claim of the lender, irrespective of the amount actually recovered by the lender through such foreclosure. Further, any secured loan will be issued to an individual borrower through wire transfer to its bank account. Moreover, the effective annual interest rate ceiling on loans decreased from 100% to 50%. Permitted penalties for the default have been scrupulously regulated.

In addition, from 11 March 2018, new amendments to Georgian laws in relation to the National Bank of Georgia, the Civil Code of Georgia and the Law of Georgia on Advertisement entered into force. In particular, borrowing money, regardless of the amount, will not be advertised, marketed, offered or sold to more than 20 natural persons in Georgia, unless such offer is made:

  • exclusively to sophisticated investors (the investors having financial means to bear the risks related to investment activities); or
  • through a public offering.
  • The banks, insurance companies, MFOs, brokers and other financial institutions are exempt from this restriction. Also, the limitation does not apply to shareholder loans or shareholder contributions.

Regulating labour safety. Georgia has a new law, the Safety of Labour, which aims to integrate European standards in Georgia and sanction the violation of basic safety standards in the workplace. In March 2019, the regulation has been upgraded from regular law to organic law. This means that it prevails over:
ordinary laws in the hierarchy of normative acts; inconsistencies between the regular law and organic law.

The list of hazardous activities and the jobs associated with increased danger, as well as the rules and procedures for selective control of compliance with the Law was adopted on 27 July 2018. The list includes activities involving construction, mining, metallurgy, energy, oil and gas, and the chemical industry. The employers engaged in the listed activities, must:

  • undergo mandatory registration at the Registry of Economic Activities;
  • perform training of the employees on the rules of compliance with basic safety standards;
  • provide employees with health insurance packages; and
  • maintain qualified work safety specialists to monitor and control compliance with the safety standards in the workplace and report any casualties to the regulator.

Where the law does not specifically address hazardous jobs, the requirements thereunder, including the need for there to be a labor safety specialist/department, is mandatory for all types of businesses. The obligation to provide insurance for employees became effective from January 2019. Any violations of the law are sanctioned with a warning, suspension of works and/or penalties up to GEL50 000.

Restriction on ownership of agricultural lands by foreign nationals. The Parliament of Georgia adopted the new edition of the Constitution of Georgia (effective from the appointment of the new President in October 2018), under which the agricultural lands bear a special status excluding foreign nationals and entities from the list of persons permitted to purchase significant resources of the state. On 25 June 2019, the Parliament of Georgia approved the largely debated Bill on Ownership of Agricultural Lands. The law is aimed at broadening the constitutional limits of permitted owners of agricultural lands and confers rights to foreign individuals/legal entities to acquire such lands, provided that certain preconditions are met. Such preconditions are regulated under the law and include circumstances when:

  • a foreign national acquires land through inheritance;
  • a company with a dominant foreign participation acquires the land through an investment plan approved by the government;
    IFIs and local financial institutions with foreign participations acquire agricultural lands through foreclosure of collateral or otherwise, as a result of their permitted activities in Georgia.

It was suggested that the law applied retroactively. However, such application of the new law was rejected by Parliament.
New law on mediation. In September 2019, the Parliament adopted the new Law on Mediation. The law become fully effective from 1 January 2020. It aims to promote mediation as an alternative method of dispute resolution in Georgia by way of setting up a legal and institutional framework. The law applies to two types of mediation:

  • when it is triggered on the basis of agreement of the parties;
  • when it is triggered after the party files a claim to the court on the basis of either parties’ agreement or court order under the Code of Civil Procedures.

The highlight of the new law is that it establishes a self-regulated body, the Association of Mediators of Georgia. Any court-appointed mediation must be conducted by a mediator or mediators selected from the list of mediators maintained by such association, while private mediation can be conducted by mediator(s) chosen by the parties outside of such list. The law also determines that the agreement on mediation must be in writing and that the commencement of mediation suspends running of the limitation terms. The law further provides for the confidentiality obligations, criteria for impartiality and independence of mediators and generally determines mediation procedures, including, but not limited to enforcement of the mediated settlement agreement through courts of law.

Georgia is among 46 countries that signed the UN Convention on International Settlement Agreements Resulting from Mediation 2018 (Singapore Convention) on 7 August 2019. The Singapore Convention is expected to facilitate international trade and commerce by enabling disputing parties to easily enforce and invoke settlement agreements across borders. Businesses will benefit from mediation as an additional dispute resolution option for settling cross border disputes, rather than litigation and arbitration.

New Law on derivative instruments. In December 2019, Parliament adopted a new Law on Derivative Instruments. The law:

  • introduces definitions of derivative instruments, qualified financial contracts and financial pledges (see below);
  • facilitates trading with qualified financial instruments.
  • It also reinforced the enforceability of close-out netting, even in the case of insolvency. This had previously been a major defect of Georgian financial regulations prior to adoption of this law. Furthermore, the new law provides that qualified financial contracts may include derivatives and financial pledges. A derivative is defined as a qualified financial contract, the value and cash flow of which depends on underlying assets or an underlying indicator, payment of which must be made by real delivery or in cash, including netting/final netting.

The law also regulates financial pledges and differentiates between two types of financial pledge (possessory financial pledge and collateralised financial pledge). Moreover, the National Bank of Georgia has the authority to define additional types of qualified financial contract and extend the list of underlying assets or underlying indicators.

New regulations in the energy sector. Starting from 20 December 2019, the Georgian Parliament adopted several laws in relation to the energy field, some of them prompted by the Deep and Comprehensive Free Trade Area (DCFTA). The changes focus on improving transparency with regard to gas and electricity prices charged to industrial end-users, as well as obliging the state to progressively develop renewable energy and substitute old resources. Amongst those adopted recently, the new Law on Energy and Water Supply is likely to have the most impact on the market. It regulates the activities of physical and legal persons in the field of electricity system management, electricity market, generation, transmission, distribution, import, export and consumption of the electricity (power). It also sets the rules of conduct for the energy market players. However, despite all these changes, the harmonisation of Georgian legislation with the relevant EU directives and regulations is still taking place. For example, the Georgian Parliament published a bill on energy efficiency that focuses on increasing the safety of electricity supply and becoming self-sufficient through energy conscious policies. The wave of legislative changes in the energy sector is rather overwhelming, but it does not mean that the process will stop anytime soon. Meanwhile, it is yet to be seen whether such immediate and powerful changes are any better for the market than the gradual assimilation of Georgian regulations to those of the EU.

The Law of Georgia on Promotion and Guarantees of Investment Activity determines the legal grounds for the implementation of both foreign and local investments in Georgia and guarantees for their protection. The rights and guarantees of foreign investors cannot be less than the rights and guarantees enjoyed by natural and legal persons of Georgia. After paying taxes and obligatory fees, foreign investors must have the right to convert profits (income) gained from investments, as well as other monetary funds in the banking institutions of Georgia. They must also have the right to their unlimited repatriation abroad.


According to user speed test data, Georgia’s average download speed is about 150.6 Mbps


For Georgia, there are two associated plug types, types C and F. Georgia operates on a 220V supply voltage and 50Hz.


$2,223 (2019 est.)
$2,158 (2018 est.)
$2,073 (2017 est.)

note: data are in 2010 dollars


Warm and pleasant; Mediterranean-like on Black Sea coast



The government of Georgia offers two main routes for foreign entrepreneurs interested in doing business and getting residency in Georgia.


A five-year permit granted for entrepreneurs in a Georgian business or real estate


  • At least US$300,00 in a Georgian business or real estate
  • For business investments, the applicant’s annual turnover must be at least i) US$50,000 in the first year, ii) $100,000 in year 2, iii) US$120,000 for years 3,4,5
  • For real estate investments, if within five years, the property is sold and another property of equal or higher value is bought, the investment residence permit will be canceled
  • The investors submit evidence of investment, personal identification, and recommendation letter from a Georgian government official, or three Georgian citizens


  • Residency after 5 years
  • Family members of the main applicant can also apply for residence visas


  • This is good for freelancers, entrepreneurs, or those employed under a labor agreement or similar document certifying employment. A residence permit is valid for one year and is renewable for up to 5 years


  • Owning immovable property/ real estate valued at least US$100,000


  • One year residency and is renewable for up to 5 years


  • Up to 6 months


Timber, hydropower, manganese deposits, iron ore, copper, minor coal, and oil deposits; coastal climate and soils allow for important tea and citrus growth.


Georgian 86.8%, Azeri 6.3%, Armenian 4.5%, other 2.3% (includes Russian, Ossetian, Yazidi, Ukrainian, Kist, Greek) (2014 est.)


Georgian (official) 87.6%, Azeri 6.2%, Armenian 3.9%, Russian 1.2%, other 1%; note – Abkhaz is the official language in Abkhazia (2014 est.)


Orthodox (official) 83.4%, Muslim 10.7%, Armenian Apostolic 2.9%, other 1.2% (includes Catholic, Jehovah’s Witness, Yazidi, Protestant, Jewish), none 0.5%, unspecified/no answer 1.2% (2014 est.)


total: 38.6 years
male: 35.9 years
female: 41.4 years (2020 est.)


urban population: 59.9% of total population (2021)
rate of urbanization: 0.35% annual rate of change (2020-25 est.)
total population growth rate v. urban population growth rate, 2000-2030

note: data include Abkhazia and South Ossetia


7.12 physicians/1,000 population (2018)

Semi-Presidential Republic


Unemployment, youth ages 15-24
male: 28.9%
female: 32.9% (2019 est.)
total: 30.4%


Personal Income Tax Rate (highest marginal tax rate) – Personal income is subject to a flat tax rate of 20%.

The concept of tax residence is recognised in Georgia. The individual is deemed to be resident in Georgia if they spend 183 calendar days or more during 12 consecutive calendar months in Georgia. For employees that are non-registered taxpayers (that is, individuals who have a separate tax identity and registration for complying with tax regulations), the employer acts as the tax agent and withholds personal income tax at source at the flat rate of 20%. In various cases, certain exemptions can be granted to the employee under specific tax treaties.

The only tax payable is personal income tax at the flat rate of 20%. The employer will act as the tax agent, withholding 20% of the personal income tax at source. Tax returns are filed on a monthly basis, on the 15th day of the month following the respective reporting month. No obligation vests with an employee who is a non-registered taxpayer to pay personal income tax. If the employee is a registered taxpayer (which happens rarely, for example, in cases when the employee also pursues certain economic activities), the obligation of paying personal income tax rests on the employee. This obligation is completed annually and a tax return will need to be filed before 1 April of the year following the respective reporting year.

An exception exists in relation to certain tax treaties. If the respective tax treaty provides an exemption from the payment of local tax, the non-tax resident employee will need to provide the tax residence certificate of the country with which Georgia concluded the relevant tax treaty on avoidance of double taxation.

Corporate Income Tax Rate (excluding dividend taxes) – Resident enterprises are subject to corporate income tax (CIT) on worldwide income. Non-resident enterprises carrying out economic activities in Georgia through a permanent establishment (PE) are subject to CIT concerning its Georgian-source income. The CIT rate is a flat 15%.

A Georgian enterprise is defined as one which has its place of management or place of activity in Georgia.

There is a general understanding that all enterprises that are not local are considered as foreign enterprises. Enterprises with a permanent establishment and branch offices in Georgia are viewed as representative offices of foreign enterprises that pay local taxes only to the extent of income received from Georgian sources.

Georgian enterprises pay taxes on their worldwide income. Permanent establishments, branches and representative offices of foreign entities pay tax only on the income derived from Georgian sources.

Taxes payable by the business vehicles (irrespective of whether they are Georgian enterprises or permanent establishments/branches of a foreign entity) are as follows:

Corporate income tax (CIT). The rules relating to the payment of CIT were amended in January 2017. CIT is now payable from the distributed profit (dividends) at the flat rate of 15%. CIT is also payable on the free of charge delivery of goods, services or monetary funds, expenses that are not related with economic activities and representative expenses that exceed a certain threshold. CIT returns need to be filed before the 15th day of the month following the respective reporting month. The new rules relating to the payment of CIT do not apply to commercial banks, credit unions, insurance organisations, microfinance organisations and pawnshops. This is because they pay CIT from the difference between their taxable income and deductible expenses at a rate of 15% and file tax returns before 1 April of the following year. The new rules for paying CIT will become effective for these organisations on 1 January 2023.

Special Tax Regimes- Individuals with an annual turnover of less than 30,000 Georgian lari (GEL), no employees, and who register as a micro business will be exempt from tax on their business income.

Individual entrepreneurs with an annual turnover of less than GEL 500,000 may register an as a small business and pay 1% tax on their turnover. The rate increases to 3% if annual turnover will exceed GEL 500,000.

Georgia has a broad network of double tax treaties with 56 conventions in full force and effect (Saudi Arabia joined the list in 2019). The most important jurisdictions include:

  • UK.
  • France.
  • Germany.
  • The Netherlands.
  • Luxembourg.
  • United Arab Emirates.
  • China.
  • Turkey.
  • India.
  • Malta.

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