Foreign investors are increasingly turning their attention to Georgia, a country that has positioned itself as one of the most business-friendly destinations in the region. With its liberal tax system, strategic location, and strong legal protections for investors, Georgia offers a unique environment for both established companies and new ventures.

This guide provides a complete overview of the legal requirements and practical steps foreign investors should know before entering the Georgian market.

Why Invest in Georgia?

Since regaining independence, Georgia has made significant progress in shaping its investment policy and developing a business-friendly environment. For a free-market economy such as Georgia, attracting foreign investment remains a central priority.

Among the advantages of investing in Georgia, particular emphasis is placed on the liberal and predictable legal framework, namely:

1. Tax System

Georgia offers an attractive climate for investors through its business-friendly approach and predictable regulatory environment. Low tax rates and flexible registration procedures further strengthen its appeal. In addition, Georgia provides access to growing markets in both Europe and Asia. The country has one of the most competitive tax regimes in the region, enabling investors to allocate more resources toward reinvestment.

2. Investment Opportunities

Georgia’s strategic geographical location creates significant potential for logistics and trade. Promising sectors include:

Renewable energy
Tourism
Agriculture
Information technologies (IT sector)
Construction industry

3. International Agreements

Georgia is a party to free trade agreements and other international treaties concluded with countries such as China, Turkey, Azerbaijan, CIS member states, the European Union, and many others, enabling investors to expand their businesses globally.

4. Protection of Investors’ Rights

Georgia has established legal mechanisms safeguarding investors’ rights at the national level. Furthermore, pursuant to international treaties such as the Washington Convention (ICSID), the New York Convention, and others, investors may also resolve disputes through international mechanisms, further enhancing Georgia’s investment attractiveness.

Can a Foreign National Invest in Georgia?

The legal requirements for foreign investors are determined primarily by bilateral or multilateral investment and trade treaties concluded between Georgia and the investor’s home state. However, apart from such treaties, Georgia’s domestic legislation also establishes essential prerequisites for investment, the most notable of which include:

1. Definition and Nature of Investment

Under the Law of Georgia “On the Promotion and Guarantees of Investment Activity,” entrepreneurial activities carried out in Georgia qualify as an investment if they meet the statutory criteria. Specifically, an investment is defined as any type of property, intellectual asset, or right contributed and used in entrepreneurial activity within Georgia for the purpose of gain profit.

Such assets or rights may include:

Monetary funds;
Shares;
Stocks;
Securities;
Real and movable property;
Rights to use land or other natural resources;
Know-how and other intangible assets.

2. Investment Entities (Investors) and Objects

Pursuant to Georgian legislation, the following qualify as foreign investors:

Foreign nationals;
Legal entities incorporated outside the territory of Georgia;
Stateless persons not residing in Georgia;
Georgian citizens permanently residing abroad.

3. Investments of Special Importance

Particular attention is given to Investments of Special Importance, a category regulated under Georgian law and eligible for preferential treatment. Such status may be granted if:

The total investment value exceeds GEL 8 million; or
The investment has significant functional and strategic impact on the development of Georgia’s economy and infrastructure.

The threshold is lower for investments made in Georgia’s highland regions, where an investment exceeding GEL 2 million may qualify as an investment of special importance.

Although the foregoing list of prerequisites is not exhaustive, it defines the principal framework governing foreign investment in Georgia.

What Steps Should a Foreign Investor Take to Invest in Georgia?

Prior to investing, it is advisable that foreign investors examine the legal and business environment to select the appropriate corporate form and complete registration in compliance with Georgian law.

The key legal steps in registering and forming an entrepreneurial entity in Georgia include:

Determining the appropriate legal form of the business, taking into account its objectives (e.g., limited liability company, individual entrepreneur, joint-stock company, or other corporate form).
Choosing a unique company name.
Preparing and submitting registration documents to the National Agency of Public Registry, including minutes of meetings or partners’ decisions, the foundation agreement, charter, and other documents required under Georgian law.
Documents may be prepared either in Georgian or in any foreign language; however, documents submitted in a non-official language must be translated and duly certified.

Legal Risks to Be Considered Before Investing

Although Georgia offers a relatively simple business environment, low bureaucracy, and favorable tax benefits, it is crucial for foreign investors to assess potential legal risks in advance to mitigate financial loss.

Key risks include:

1. Misinterpretation of Regulations

Investors may face difficulties interpreting local legislation. For the successful investment, careful consideration must be given to tax and licensing requirements, including double taxation avoidance treaties and other agreements relevant to the investor’s business. It is also recommended to review the legal relations and bilateral treaties between investors home state and Georgia for investment promotion and mutual assistance.

2. Protection of Property Rights

When acquiring real estate, both the legal and factual status of the property must be verified. In particular, land use, zoning, and permitted construction purposes must be examined, as certain plots are subject to restrictions on development.

3. Tax Risks

Tax legislation requires constant monitoring and compliance. For effective investment planning, investors must carefully structure their financial strategies and maintain ongoing oversight.

4. Labor Relations

Employment relationships are regulated in detail under Georgian labor law. For this purpose, drafting employment contracts requires particular attention to ensure both investor protection and compliance with Georgian law and labor inspection requirements.

5. Daily Operations

For sustainable operations, businesses must maintain properly drafted contracts and ensure compliance with legal requirements in their daily activities.

Taking into account the above factors, Georgia offers promising investment opportunities. However, success requires careful planning and comprehensive market analysis. Selecting the right sector, ensuring compliance with legal and tax requirements, and partnering with local professionals constitute the key prerequisites for successful investment.

Justice League offers foreign investors a full range of tailored services, from consultation to day-to-day monitoring delivered not just by one lawyer, but by a team of lawyers with diverse expertise and experience.