GEORGIA - PROMISING
MARKET FOR INVESTMENTS

GEORGIA IS A WINNING COMBINATION

Strategically locatedat thecrossroad of Europe andAsia
Free Trade Agreementswith 2.3 bln market - EU,China (Including HongKong), Turkey, Ukraine,
CIS & EFTA

Modern and fast developing infrastructure
Skilled and competitively
priced labor force
Stable, effective andwell -developed banking
sectorFlat -rate , low taxes - No
corporate profit tax onreinvested profit
Recognized as one of theeasiest places to dobusiness in the world1

STRONG SUSTAINED ECONOMIC GROWTH

Key EconomicIndicators201520162017

2018 I -III Q

Nom. GDP, USD mn

13,98814,37815,087

11,993

Nom. GDP per capita,USD

3,755

3,857

4,047

3,216

Real GDP growth, %

2.9%

2.8%

4.8%

4.8%

Import (CIF), USD

mn

7,300

7,294

7,939

6,690

Georgia’s economy has experienced
economic growth at a
CAGR of 4.1%(2012 -2017)
Europe and Central Asia region
experienced economic
growth atof 1.6% (2012 -2017)a CAGRIn 2012 -2017 the strongest growthoccurred in:- Financial services (11.2%),

Export (FOB), USD

mnSource: National Statistics Office

2,205

2,113

2,735

2,447

- Hotels/Restaurants (8.8%),- Construction (8%), etc.
Each growing at a CAGR of 8%

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RAPIDLY IMPROVING GOVERNANCE

Doing BusinessEconomic Freedom

Corruption
Perceptions Index

Safety & Crime index

N6N 16N 41

N6

Up from #112 in 2005

Up from #99 in 2005

Up from #130 in 2005

Up from #20 in 2012

2nd a mong thecountrie s in Europe

8th a mong thecountrie s inEurope

6th a mong thecountrie s in
Ea ste rn Europe

6th pla ce a mongthe 118 countrie s3

FOREIGN DIRECTINVESTMENTS

FDI BY YEARSFDI (mln USD)
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400200
-

1,753
17%

2007

FDI as % of Nominal GDP
1,895

20%
18%
1,570
1,566
16%
14%
1,13012%
13%
12%
12%
1,023 1,021
999
11%
11%
10%
845
8% 8%
664
8% 6%
7%
6%
6%
6%
4%
2%0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IIII Q
1,818

Share of reinvestments in total FDI was
50.6% in first thee quarters of 2018, forcomparison, same number
stood at 34.7%

1,666

Top FDI sectors:- Financial Sector- Energy- Transport and Communications- Manufacturing- Construction- Real Estate

Top investor countries: Azerbaijan,Netherlands, UK
Georgia has signed Bilateral Investment Treaties (BIT’s) with 33 countries and is a member of ICSID
Convention since 1992

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TAX INCENTIVES

8th Least Tax Burden Country in the World

Taxation System
No Corporate Profit tax on retained

profitPension Contribution- 6% (2% paid byEmployer, 2% paid by Employee, 2% paid byGovernment)
Personal Income taxes for interest, dividends
and royalties are reduced to just 5%
Double Taxation avoidance with 515 %20 %18 %<1%

Select Items

0%,5%, or 12%Corporate
Profit Tax

Value
Added Tax

Personal
Income Tax

PropertyTax

5 countries

No capital gains, wealth or inheritance tax
No restrictions on currency conversion orcapital/profit repatriation

Excise Tax

Import Tax(depending ongoods imported)

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REGIONAL HUB FOR DOING BUSINESSFREE TRADE AGREEMENTS WITH 2.3 BLN MARKET
Very simple andservice -oriented
customs policy
and administration
No quantitative
restrictions ortariff barriers
80% of goods freefrom import tariff
Most Favored Nation(MFN) since 2000

6INVESTMENT SECTORSHOSPITALITY &REAL ESTATELOGISTICS

ENERGYMANUFACTURING

BUSINESS PROCESSOUTSOURCING

7HOSPITALITY & REAL ESTATEInternational Traveler Trips (mln)10868.7

7.9

4.7

5.7

5.9

6.3

2013

2014

2015

6.7

+10 %

42020122016

Tourism revenue increased by
2018 (USD 3,3 bln )

2017

2018

19 % in

PIPELINE OF
ON -GOING BRAND
HOTELS IN GEORGIA“Internationalupscale brands enjoyoccupancy rate of 72 % in Tbilisi”
Colliers International“Georgia has become a hub fortourism and business” SheikhNahyan Bin Mubarak Al Nahyan8MANUFACTURING SECTORInternational Companies
Presented in Georgia

Average monthlyto USD 370

salary amounts

Free Trade Agreements withbillion market“ A highly qualified,technology -driven workforce and strong
manufacturing capabilities are
attracting high -tech businesses
Georgia“ - Elbit Systems, manufacturing of aircraft composites

to2.3

1 kWh is ~7 USD cents for 30 -110
kV high voltage electricity
4 Free Industrial Zones- No taxes
except Personal Income Tax (20%)“ HeidelbergCement invests in Georgia becauseof its transparent
and simple tax system, stable macro-economic environment andfavorable geographic location”– HeidelbergCement“Georgia has transparent business climate,acceptable labor cost and simple legislation

growing economy,” - Henkel

9BUSINESS PROCESS OUTSOURCING (BPO)
Time proximity and cultural flexibilities (GMT+4)
Language skills to serve English, German and Russian
speaking countries
75 higher educational institutions
125 professional education centers
Competitive averagegross monthly

salary of USD 500

Lowest utilities costs (including internet) in the wideregion, approximately 2.
3 USD per sq. m.
The most attractive directions: CRM, HRO, F&A, ITO,Architecture and Design services.
German, US and other foreign companies
already provide BPO service from Georgia“ Georgia was very welcoming
due to its ease ofopening a firm and finding quality teammembers.
Georgia has an unique place with limitless potential”–Base4, architecture & engineering service
outsourcing

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TRANSPORT AND LOGISTICS SECTOR

Strategic
initiative

location within Belt andRoad

Alternative route through Georgia
takes 10 -15 days from China to Europe
instead of 45 days of traditionalroute“Georgia has strategic
Geographicallyhub location, key position in Caucasus
region, transparent tax and customs
regulation” - Gebrüder Weiss, logisticcompany

Sea Port
Poti Sea Port (APM Terminals)
Batumi Sea Port (BIH)

International Airports
Tbilisi International Airport (TAV)
Batumi International Airport (TAV)

Kulevi Terminal (SOCAR)
Supsa Terminal (BP)Roads and Railway
Georgian Railway - Total Length:
2,083.9 km
Road - Total Length: 20,329 km

Kutaisi International Airport (UAG)

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ENERGY SECTORInternational Companies
Presented in Georgia

HYDRO POWER

WIND

SOLAR

Among top countries interms of water
resources per capita(only 20% utilized )Wind potential ofGeorgia is estimatedup to 1500 MW

Big potential for solar energy
development

80% of total electricity
is generated fromHPPs

Share of wind power
in total generation
will reach 10% byyear 2025

“Georgia has one of thelargest untapped hydropotentials in Europe,
making the country anattractive destination”
Clean Energy Group

During the year in mostregions there are 250 -280
sunny days and the annual
average amount of sunshine
hours is over 2000

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ENTERPRISE GEORGIASUPPORT TOOLS:
Produce in Georgia:
10 % Interest Rate Co-financing (2 years)

50% Collateral Guarantee (up to 4 years)
Free Land for Manufacturing (investment obligation)

EXPORT

Host in Georgia :Co-financingof Franchising Fee/Management Contract (hotels)

10% Interest Rate Co-financing (2 years)
INVEST

BUSINESS

Film in Georgia:
20 %- 25% cash rebate

CO-INVESTMENT OPPORTUNITIES:State -owned investment fund: Partnership Fund

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THANK YOU