GEORGIA WITH “A DIVERSIFIED GDP STRUCTURE THAT PROMOTES SUSTAINABLE GROWTH”

AMBASSADOR: Georgia and China have a friendly relationship based on the principles of equality, respect and cooperation. At the moment, our partnership is stronger than ever. In bilateral relations Georgia’s priority is to promote Trade and Economic cooperation, increase export of the Georgian products to China and attract more Chinese tourists to Georgia.

Georgia was one of the first countries who joined China’s Belt and Road Initiative (BRI). Despite being located far from China, my country can play a key role in transiting Chinese goods along BRI routes. For that reason, in bilateral relations we bestow great importance to promotion Trans-Caspian Corridor (Middle Corridor).

Government of Georgia aims to deepen integration into the world’s leading markets. PRC is the third largest trading partner for Georgia and the first country for exporting the goods from Georgia. Trade turnover between two countries is close to 2$ Billion. 

One of the main triggers for increased trade and economic cooperation with China was the signing Free Trade Agreements with China (including Special Administrative Region - Hong Kong) in 2017. Today, we have FTA with EU, UK, Turkey, Ukraine and CIS countries, which opens up tariff free access to consumer markets with about 2.3 billion population. We are negotiating Free Trade Deals with US, Israel, India, Indonesia, Korea and Gulf region.

AMBASSADOR: Georgia is located on a historical “Silk Road”, between Europe and Asia, doing business in Georgia places companies at a strategic crossroads of cultures and economies, all while remaining highly integrated with international markets.

The country is ranked No. 7 in the World Bank’s most recent “Ease of Doing Business Index”. The economy of Georgia rates 12th in the Heritage Foundations' Economic Freedom Index and 8th in the Economic Freedom of the world report by the Frazer Institute. 

Georgia is perfectly situated for easy access to most major global markets and has a stable and growing economy, thriving cities, and competitive costs for operating a business. It is filled with young, dynamic, and skilled people and an ‘Open Door Policy’ to help foreign and local companies grow.

The Georgia has a diversified GDP structure that promotes sustainable growth. Despite the pandemic, Georgia's economy demonstrated considerable resilience and the Government had ensured a double-digit economic growth for the last two consecutive years (2021 and 2022).

The Georgia’s economy is powered by the country’s stable political environment, liberal and free-market economy, six flat tax rates, preferential free trade agreements, and developed transport infrastructure. Each of these make the country an attractive destination for foreign investments and the private sector.

Georgia has signed Bilateral Investment Treaties (BITs) with 34 countries (including China) and has been a member of the ICSID Convention since 1992. Integration with the international community has helped the country attract foreign-owned businesses that have made significant contributions to the growth of the Georgia economy. 

AMBASSADOR: The first investment from China to Georgia was made in 2002. Since then, a total of 700$ million have been implemented. In Georgia you can witness successful activities of Chinese companies:

Hualing Group – has invested in various projects, including: Kutaisi Free Industrial Zone and Tbilisi Sea New City, which includes a 5-star hotel “Hotels & Preference Hualing Tbilisi”, residential real estate and shopping center "Tbilisi" Sea Plaza''. Currently, the company is developing another hotel in the center of Tbilisi, the second phase of residential real estate and other projects. Hualing Group is also represented in the financial sector with 95% of shares in Basis Bank.

Eastern Energy Corporation - the company is a subsidiary of the State Grid Corporation of China, one of the largest state-owned companies operating in the field of Chinese energy. The company invested in Georgia in 2004 and owns “Khadori” hydro power plant in Akhmet municipality. The installed capacity of the hydroelectric plant is 24 MW and the annual output is 100 million kW. 

Rustavi Steel Corporation Company LLC - the company was founded in 2014 and owns a construction armature enterprise in Gardabani district. From 2014 until now, up to 13 million GEL has been invested.

We invite more Chinese companies to do business in Georgia. 

AMBASSADOR: We are open for Chinese investments and we target the following sectors: Renewable Energy, Business Process Outsourcing, IT, electronic/electronic parts and auto parts manufacturing, Tourism and Real Estate.

•Georgia and PRC have special fruitful partnership in the energy sector. With support of Chinese companies, several types of electric energy projects have been implemented and/or are underway in Georgia: hydro power plants, coal and natural gas-fired thermal plants, wind power plants.

•The FTA also includes cooperation in the field of energy, which implies the establishment of new favorable relations between the parties and the attraction of new investments and partners in the sector. 

•The total Installed Capacity of Electric Power Plants operated in Georgia amounts to around 4.5 MW. Out of which 77% comes to Hydro Power Plants, 22% to Thermal Power Plants and only 1% to Wind Power Plant which is expected to reach 10% by 2025.

•Georgia has more than 20 000 rivers and almost 300 of them provide an excellent opportunity for hydropower generation. High emanation of Sun due to geographic location causing 250-280 sunny days per year (approx. 1,900-2,200 hours/year) in the most regions of Georgia.

•Government of Georgia has elaborated 10 years Network Development Plan (2021-2031). We are developing and modernizing Network System and Transmission Lines with all neighboring countries. Recently, we have initiated “Black Sea Submarine Cable” project that connects South Caucasus Region to the South-East Europe (length approx. 1 200 km).

•We have ongoing 153 small and medium HPP (the overall installed capacity of which is around 1 500 MW with prospected electricity generation around 7.5 billion kWh), 13 WPP and 31 SPP projects (the overall installed capacity of which is approximately 900 MW with prospected electricity generation around 3 billion kWh).

•In Energy Sector, we apply Build-Own-Operate (BOO) Principle, we have a huge unexploited potential, there is no tariff set for newly built Renewable Energy Plants (Investor is free to trade on open market and negotiate the price) and generation and export activities are exempted from VAT.

•75 higher education institutions and 125 professional educational centers are operating in Georgia. About 40%-60% of the population speaks English and Russian, and German is the 3rd most spoken language, giving us the opportunity to serve both European and regional markets.

•Georgia has one of the most competitive average salaries among competing countries in the direction of Business Process Outsourcing - 500 USD. The income tax payable from the employee's salary is fixed at 20%. Citizens of 98 countries can come to Georgia without a visa, which creates an attractive environment for attracting professional workforce from other countries.

•High-speed Internet is available throughout the country. Georgia ranks 15th in the world in terms of Internet access.

•Georgia has one of the lowest utility bills in terms of the region, about 2.3 USD per 1 sq.m.

•High-level office spaces are available in almost all regions of Georgia, with a total area of approximately 1 million square meters.

•Georgian Business Process Outsourcing (BPO) companies are already providing services to clients mainly in European markets in more than 10 languages.

•China is among world’s most technologically advanced countries. We aim to expand the partnership opportunities with PRC in the field of innovation and entrepreneurship.

•To take advantage of our geographic location and well-rated business climate, the Government of Georgia works on strengthening transit function of the country through the existing and new high capacity fiber-optic backbones, by linking Georgia to the European and Asian countries. In this respect, we invite high-tech companies from PRC to engage in implementation of the digital connectivity of Europe and Asia.    

•With the assistance of the World Bank, we plan to create the regional digital hub in Georgia, which includes an international connection with the fiber-optic internet infrastructure as well as the establishment of a regional data center in Georgia. High-tech companies from PRC are welcomed in this process and we count on their active engagement.

•In IT sector, Virtual Zone Entities are exempt from: a) corporate profit tax on the revenue derived from providing IT services abroad and b) VAT for delivering IT services abroad. The Georgian enterprises, that are granted the status of an International Company and render IT services in Georgia, enjoy reduced property (but not land), profit, dividend (full exemption), and income taxes, with profit and personal income taxes reduced to 5%.

•Investors can take advantage of Free Industrial Zones. Companies operating in FIZ are exempt from all taxes except income tax in case of export of products. There are 4 free industrial zones in Georgia: Tbilisi, Kutaisi (two) and Poti (near the port).

•The cost of energy is quite low - 1 kW/h is about 7$ cents.

•We provide access to Finance through Partnership Fund by co-financing (equity, mezzanine, etc.) investment projects at their initial stage of development - the Fund acts as a financial partner for private investors and provides mid to long-term financing. It co-invests only in commercially viable investment projects. The Fund’s participation in projects is limited to minority share (up to 50%). The Fund provides Greenfield as well as Brownfield financing and acts as a "Sleeping Partner” with a predetermined, clear exit strategy. 

AMBASSADOR: We provide access to Finance through Partnership Fund by co-financing (equity, mezzanine, etc.) investment projects at their initial stage of development - the Fund acts as a financial partner for private investors and provides mid to long-term financing. It co-invests only in commercially viable investment projects. The Fund’s participation in projects is limited to minority share (up to 50%). The Fund provides Greenfield as well as Brownfield financing and acts as a "Sleeping Partner” with a predetermined, clear exit strategy. 

In IT sector, Virtual Zone Entities are exempt from: a) corporate profit tax on the revenue derived from providing IT services abroad and b) VAT for delivering IT services abroad. The Georgian enterprises, that are granted the status of an International Company and render IT services in Georgia, enjoy reduced property (but not land), profit, dividend (full exemption), and income taxes, with profit and personal income taxes reduced to 5%.

In Energy Sector, we apply Build-Own-Operate (BOO) Principle, we have a huge unexploited potential, there is no tariff set for newly built Renewable Energy Plants (Investor is free to trade on open market and negotiate the price) and generation and export activities are exempted from VAT.

In Tourism Sector, we offer Free Tourism Zones (in Anaklia, Kobuleti and Ganmukhuri) where investors can get free land, profit and property tax exemptions until 2026, and free casino license for hotel with over 80 rooms. 

AMBASSADOR: China is among world’s most technologically advanced countries. We aim to expand the partnership opportunities with PRC in the field of innovation and entrepreneurship. Cooperation with organizations in the innovation, technology, ICT and R&D commercialization fields will enhance the innovation ecosystem in Georgia.

We see big potential in this direction and we stand ready to facilitate trade missions, B2Bs and startup pitching events as well as to host potential partners in the Technological Park of Georgia and discuss the details for the future cooperation.

AMBASSADOR: Georgia has unique biodiversity with subtropical marshes, semi-deserts, alpine zones and snowy peaks, all within hundred km of each other. We have more than 12 000 historical and cultural monuments, three out of which are included in the list of UNESCO World Heritage Sites, Over 103 resorts, around 2400 springs of mineral waters and 8 national parks and 31 protected areas.

Tourism sector is one of the most dynamically developing sectors of Georgian economy with significant potential for further growth. In 2022, we have hosted 5 426 903 International Traveller Trips (188.5% growth y-o-y). Before the pandemic, the number of tourists coming to Georgia from China maintained an increasing trend. In 2019, the number of Chinese tourists in Georgia, compared to the previous year, increased by 51% and amounted to 48,071 people. However, it is significant that the share of Chinese travelers is less than one percent of the total number of tourists arriving in Georgia.

Government of Georgia has developed 10 Year Development Plan 2015-2025, which aims to increase tourist flow to 11 million persons and attracting Chinese tourists is one of the main priorities. 

Georgia has "Approved Destination Status" and we have simplified VISA regulations for the Chinese citizen. A short-term electronic visa of Georgia can be issued within five working days, through a special e-VISA PORTAL. In addition, a Chinese citizen who has a visa and/or residence permit of the country defined by the resolution of the Government of Georgia can enter Georgia without a visa, under the terms and conditions stipulated by the same resolution.

The launching of direct flights in 2016 (Tbilisi-Urumchi-Beijing-Urumchi-Tbilisi) contributed further enhancement cooperation in tourism sector and increased the number of visitors.

The recent decision of the Ministry of Tourism and Culture of PRC to include Georgia in the second batch of destinations and resuming the direct flights provides new impetus to boost Tourism and Cultural relations between the two countries. 

China is an attractive tourism market for us and we are committed to continue our efforts aimed at further boosting our bilateral cooperation for further resulting in growth of visitors’ numbers between our destinations.