The services sector has become the new money spinner. It is no longer playing second fiddle to the manufacturing sector but has emerged on its own as the go-to area for businesses. The share of the services sector especially the Information Technology one in the overall GDP of the world economy has come about post the development of new technologies including the internet.
IT, the great enabler of business
The spread of information technology is not limited to digital companies alone but has touched arguably each and every sector of the economy. Thus, not only the private sector but government owned enterprises are increasingly drawn towards IT as part of their digital transformation initiatives. The contribution of IT sector in driving the GDP growth of nations and in providing livelihood to many has given it the status what manufacturing had in the 19th and 20th centuries.
Moreover, the advantages of an IT company vis-a-vis its manufacturing counterpart such as less land requirement, no pollution and a greater degree of wealth generation have driven many companies to diversify into the sector. However, should the IT company be set up in a business friendly environment then its growth potential can be immense. The benefits would include, among other things, the ones related to tax and customs duties.
Remember! A large pie of the company’s profit goes to the government as taxes (fairly legitimate isn’t it?) The problem arises when the level of taxes are so high and irrational that they eat into your profits and act as disincentives. To escape the tax dragnet or at least help in reducing it, you should invest in a business friendly country like Georgia.
Why an IT company setup in Georgia is good news?
Georgia has emerged from its Soviet past by making wide ranging reforms in areas of taxation and procedures to set up businesses. Besides, Georgia has invested a lot in sprucing up its infrastructure especially the optic fiber network in ushering internet services. Moreover, the setting up of a virtual zone in Georgia has created opportunities for IT services to compete and realize the ROI. Spurred by the business friendly environment, Georgia has become home to several IT companies dealing with cutting edge digital technologies such as cloud computing, artificial intelligence and machine learning, Internet of Things (IoT), big data, predictive analysis etc.
How can a virtual zone in Georgia be of help?
A fairly simplified procedure to set up an IT company, a low tax regime, the presence of a robust IT infrastructure, and an exemption from paying customs and excise duties especially on profits and exports are some of the advantages that an IT company can avail in Georgia. Let us list these out in bullet points.
- The Value Added Tax or VAT to be paid for IT exports has been exempted for companies in the virtual zone.
- The revenue earned from exporting software is exempted from taxes.
- The exports from a virtual zone is exempted from paying any excise or customs duties.
Setting up an IT company in a virtual zone in Georgia can be your ticket to achieve bigger goals in business. The plethora of advantages in terms of infrastructure, tax savings and the presence of a skilled workforce can help your business to stay ahead of the competition.