The Free Industrial Zone Company offers huge tax advantages to investors. The key Tax benefits are numerous : 0% Corporate Income, 0% Dividend Tax, 0% VAT. No customs duties on imported or exported products, exchange controls or capital repatriation, and many other advantages for your business expansion into the EU, CIS, Asia, and Middle East markets.
Indeed, Georgia is a strategic bridge between Europe and Asia’s leading economies. Georgia is only nine days away from China by rail. And it takes another two days to deliver export goods to Europe. Georgia has free trade agreements with the CIS countries, Europe and China. Georgia has access to a 2.3 trillion consumer market and will become a major distribution hub in ten years.
The Key Tax benefits OF The Free Industrial Zone Company In Georgia
A Free Industrial Zone Company is aimed to create a tax and customs, legal and administrative environment that highly promotes company competitiveness in world markets.
- 0% Corporate Income Tax (instead of 15%)
- 0% Dividend Tax (instead of 5%)
- 0% VAT (instead of 18%)
- 0% Property Tax
- 0% Foreign Income Tax
A Free Industrial Zone Company In Georgia Benefits From Numerous Other Advantages
- A foreigner can be 100% owner of the Company
- Repatriation of 100% of capital and profits
- No account monitoring, no audit is required
- No minimum seed capital is required
- No minimum investment is required
- No limitations or quotas on Import / Export
- A very attractive price of license and permit
- No exchange controls within a FIZ.
- No trade barriers or quotas on imports and exports
- A fast and straightforward customs import and export procedure
- 0% tax on import and export goods, raw materials, equipment and machinery, prefabricated and manufactured products
- No restrictions on the employment of foreigners
- Low labor cost (average wage $450)
- Low energy costs
- Low electricity costs
- Low water supply costs
If your Free Industrial Zone Company hires Georgian resident employees, Georgia FIZ company will have to pay a 20% withholding tax on employees’ gross salary + 4% pension contributions.
If your Free Industrial Zone company exports products from the Georgia Free Zone within Georgia territory, then a 4% VAT rate applies to these sales.
Other Operational Advantages Of a Free Industrial Zone Company
Good Infrastructure
Georgia Free Industrial Zone offers equipped business districts and high-performance communication infrastructures. But also efficient cargo handling services, customs brokerage, administrative services, and quick certificate of origin.
Affordable Warehouse and Land Lease
Georgia Free Zone investors can rent land, warehouses, industrial units, offices, and storage rooms at affordable prices.
A Strategic Location
Georgia is a strategic location for a Free Industrial Zone company. Georgia is an excellent logistics center (Black Sea ports, railways, and modern roads). Georgia is at the heart of the new Silk Roads and the “One Belt – One Road” which will link the European market to the Chinese market within the next ten years. Georgia is an ideal location for business expansion into the EU, Asia, CIS, and the Middle East markets.
Several Free Trade Agreements With The World’s Major Economic Zones.
Georgia is becoming a key country linking the European and Asian markets. Thanks to several FTA, Georgia has access to 2,3 billion consumers without custom duties.
- A Free Trade Regime with the CIS countries and Turkey.
- A Deep and Comprehensive Free Trade Agreement with the EU for manufacturing and processing industries.
- A Free Trade Regime with EFTA (Switzerland, Liechtenstein, Iceland, Norway).
- Preferential Trade (GSP) with the United States, Canada, and Japan.
Double Tax Avoidance Treaties With 56 Countries
Georgia has also concluded
56 Double Taxation Avoidance Treaties with many countries such as Germany, China, the UK, Singapore, and Ireland, among many others…Regarding a Free Industrial Zone Company Dividends, suppose they are distributed to a foreign (non-resident) shareholder, then the taxation of such a shareholder in his tax residency country shall be analyzed with the consideration of provisions of the double tax treaty of the relevant country (if any).
A Skilled Workforce
- There is no Georgian regulation on a minimum wage
- There are no unions
- A liberal labor code and a high degree of flexibility in “employee-employer” relations
- An important source of Young Workers
How Long Does It Take To Register A Free Industrial Zone Company?
It takes 15 business days. After the registration of the Company, the main time-consuming actions include preparing and submitting constituent documents to the Georgia FIZ administration.
Which Documents Are Required For Registering A Free Industrial Zone Company In Georgia?
To register a business in a Free Industrial Zone, an individual must provide a passport, business name, phone number, and email address. Suppose a Legal Entity is the Free Industrial Zone Company owner, then the mother company will require a full set of constituent documents, including disclosure of the ultimate beneficiary of the Company.
Do You Have To Renew Your Free Industrial Zone Company Every Year?
Indeed, you have to renew your license every year. This license renewal fee depends on the Georgia Free Zone where the Company is incorporated and the type of activities your Company carries on. On average, the renewal of a FIZ license costs about $2,000.
Can I Set Up A Free Industrial Zone Company Remotely?
You can, thanks to a Power of Attorney. Your trustee in Georgia, On Your Behalf, will carry on all the necessary steps for registering your Free Industrial Zone Company within Georgia FIZ. Your physical presence in Georgia for registration is not required.
Please consult us if you want to opt for a remote Free Industrial Zone Company registration.
Can You Open A Corporate Bank Account For Your Free Industrial Zone Company?
Yes, you can. Once your Free Industrial Zone Company is registered, we will help you set up a multi-currency business bank account in one of the best Georgian banks.
Free Industrial Zone Corporate Bank Account & Substance
The bank will need the Free Industrial Zone Company to have a real physical presence in Georgia FIZ. The Free Industrial Zone Company must show Substance in Georgia. It means that the FIZ Company shall carry out basic income-generating activities within Georgia FIZ and have adequate local human resources to carry out such activities, with the necessary qualifications.”
Corporate Bank Accout Remote Opening
If you opt for a remote bank account opening service without a physical presence in Georgia, it is possible. Thanks to your Power of Attorney, your Trustee can open this account remotely.
How Much Time To Open The Business Bank Account For My Free Industrial Zone Company In Georgia?
About 14 days. We need to prepare and submit the constituent documents of your business plan forms appropriately and help the bank understand your business details, commercial information, and purpose/use of the bank account to approve your account application.
Do I Have To Keep Accounting For My Free Industrial Zone Company?
No, it is not mandatory, but it could be useful to maintain a good follow-up of the Company. Alternatively, your free Industrial zone company could hire local employees and purchase in Georgia. The Company’s accounting is done to make its monthly tax returns correctly.
Do I Have To Register My Free Industrial Zone Company For Vat?
No. But suppose your Free Industrial Zone Company plans to make sales in Georgia and your VAT taxable transactions exceed 100,000 GEL during any 12 calendar months. In that case, you need to register immediately as a VAT taxpayer to the Revenue Service and pay VAT on all future transactions that qualify for VAT. The VAT rate in Georgia is 18%.
This registration with the
Revenue Service will be used to claim back VAT if you buy products and services.
Please note that you can voluntarily register for VAT at the beginning of your business (and before reaching the threshold of 100,000 GEL of VAT taxable transactions), so you can claim back VAT on your purchases and service fees immediately from other VAT payers in Georgia.
What Happens If A Free Industrial Zone Company Sells Products Or Services Within The Georgia Territory?
Free Industrial Zone Tax benefits apply mostly for selling products to clients based abroad (outside Georgia).
Suppose you work with Georgian clients and earn income in Georgia by selling your products to Georgian resident customers. In that case, the Georgian-source income will be taxed at a Corporate Income Tax rate of 15% (standard rate) + VAT 4%.
In Which Georgia FIZ Is It Better To Register A Business?
It all depends on the objectives. The most expensive license is in Tbilisi, and the simplest and most affordable in Kutaisi- Hualing. If you need a large land plot and access to the seaport, you should pay attention to the Poti FIZ.
What Kind Of Legal Entity Will Be Quality To Be Registered Within A Georgia Free Industrial Zone?
Limited liability company, joint stock company, full partnership, limited partnership, and all legal entities permitted by the Georgian legislation. However, the simplest legal form is the LLC.
If you need more information about the Free Industrial Zone Company,
please get in touch with one of Happy Georgia’s advisers. He will provide you with the In-and-Outs of a Free Industrial Zone company registration in Georgia.
