Free Trade Zone
Georgia has earned its position as a dominant commercial center. Same is also known with its contemporary, changing and entrepreneurial business culture. Same is also strategically placed at the crossroads of trade and commerce between East and West zones. Georgia is splendidly located to access markets of Central Asia and the Middle East, Europe, as well as CIS countries. Its time zone allows it to connect to all market from America to Asia with equal benefit. Being on the bridge between Europe and Asia, the economy of Georgia is highly unified with international markets. Owing to the DCFTA with EU, Georgia appreciates direct access to nearly one billion markets.
Businesses operating within Georgian-free industrial zones enjoy brisk and genuine incorporation procedures. They also enjoy tax-free trade opportunities. Free zone envisaged by tax code of Georgia where the business-friendly regulations and favorable tax and customs system apply. Georgian charter does not impose control regarding foreign ownership of companies. Therefore, any legal and natural person, resident or foreigner, is allowed to register a company in Georgia.
One can enjoy the under-mentioned benefits by having registered company in free trade zone:
- Tax Incentives;
- Simplified procedures;
- Payments may be carried out in any currency;
- Exemption from majority of licenses/permits;
- Autonomy from the local self-government bodies.
There are different free zones in Georgia which are:
- Poti Free Zone
- Kutaisi Free Zone
- Tbilisi Free Zone
Kutaisi Free Zone:
Kutaisi is one of the largest cities of Georgia and Kutaisi free zone is located within the city, investors who choose to invest their benefit from special investment regime. More than 20,000 employees work in Kutaisi free zone and the employments and employees are expected to increase.
One can presume the under-mentioned tax benefits:-
- 100% permanent exemption from Corporate Profit, Dividend, Property taxes and VAT;
- 100% permanent exemption from import/export of all cargo, including raw materials, equipment & machinery, prefabricated goods;
- 100% capital and profit repatriation;
- Double taxation with many countries ;
- Free Trade regime with the CIS countries and Turkey;
Tbilisi Free Zone:
Tbilisi being the capital of the republic of Georgia, has been attempted a lot to create good foreign financial investments. Tbilisi has been declared the only industrial free zone of East Georgia. It is located in Glani, 17 km away from the city. It covers 17 hectares of area. This has been created to welcome all investors from technology, trading and services, ware housing and logistics. The companies who are based in Tbilisi free zone will benefit from operational and tax advantage.
One can presume the under-mentioned tax benefits:-
- Income of a Free Industrial Zone Enterprise is exempt from the Corporate Income Tax;
- Interest and Dividend paid by a Free Industrial Zone Enterprise is not taxed and is not included in the taxable income base of the receiver;
- Trade between the Free Industrial Zone Enterprises are exempted from the VAT;
- Free Industrial Zone Enterprises have no obligation to administer personal income tax of the employees;
- Free Industrial Zone Enterprises are not liable to asses and pay Reverse Charge VAT (RCVAT);
- Export is exempted from VAT with the entitlement to tax credit;
- Property, including land, located in a Free Industrial Zone is exempted from property tax;
- Trade between a Free Industrial Zone Enterprise and a Georgian company is taxed at 4% of the invoice value.
Registration of a company in free zones:
The free zones in Georgia are very popular from the investments perspective. There are a lot of foreign companies same are under process to bring the FDI in Georgia free trade zone. Because of tax incentives and other benefits, other companies are also planning to enter into Georgia.
The process of setting up a company in free zone took place once the application is filed by the company. The processes of a company formation in a free zone in Georgia are done by submitting the appropriate applications. Corporate has to submit other important information along with the application same includes:
- Identification data of applicant;
- Design plans of companies in free zones.
The whole process for opening of a company in Georgia free trade zone does not take more than 2 days. Individuals also need to submit few more documents to the national agency for registration. Once all information submitted then company get the registration.
Now next question comes that how to register a company in a free trade zone. So in reply to the raised question is that same company must be registered with the National Agency of Public Registry of the Ministry of Justice. One need to submit the application form along with other signed documents and same (i.e. documents) are as follows:
- Name and type of company;
- Date of starting business and date of termination;
- Details regarding the founder of the company;
- Documents of naming each member of supervisory board and management board.
Conditions for the Registration:
Under registration process, some important conditions are there which one has to abide by to get registration process completed. Same will be issued by the ministry of justice on the basis of the same company get registered in free zones. In addition to the same company has to go for yearly license approval which is again a mandatory thing.
The process of formation of a company in free zones is exactly the same as a company gets registration in Georgia. Once a company is registered same becomes operative the day company get the incorporation form. To register/ form a company, some other documents (detail mentioned below) need to be submitted:
- The charter of company;
- A proof from Information Centre of Ministry of Internal affairs etc.;
- A registration fee must be submitted as prescribed by authority.
After all this the company will receive a confirmation number and particulars related to the registration process.