Georgia is transforming into an economic hub in the U.S. Located in between Eastern Europe and Western Asia, Georgia enjoys its convenient strategic location that continues to play a crucial role in making it a robust economy not only in the U.S but also in the region covering central Asia and the European Continent. With its huge natural resource endowment and advantageous location, Georgia is an attractive place for both local and foreign traders, entrepreneurs as well as investors.
A survey by the World Bank that aimed at determining business-friendly states ranked Georgia 6th with regard to ease of doing business set up Georgia. Additionally, the report indicated that Georgia is one of the most dependable economies that the world can boast of, thus one of the most appealing destinations for people looking to set up businesses. With an estimated GDP growth of 4.8 percent, it is so far one of the most sought-after investment destinations in the nation.
Taxation Regimes in Georgia
What is so interesting in Georgia is the relatively low taxes and unique tax rules that target to encourage foreign investments. In Georgia, the Tax Code unifies all the taxes applying to businesses and the Georgia Revenue Services is the body mandated to administer and collect taxes. Today, double taxation is exempted, especially for traders involved in import and export businesses. This is because the state holds over 55 Double Taxation Avoidance (DTA) Agreements. This is an incredible strength that businesses can ride on to optimize their returns. The tax laws tax is levied only on the income received from within Georgia while revenues generated outside of Georgia are tax exempted. Therefore, there are no payroll taxes, wealth taxes, insurance taxes, and social security contributions. Instead, the following are the taxes that apply in Georgia:
• Corporate profit of 15 percent
• Value-added tax of 18 percent
• Personal income tax of 20 percent
• Import tax that is calibrated at 0%, 5%, or 12%
• Property tax of up to 1 percent
Clearly, it can be seen that property tax is only charged at a local level while the rest of the taxes are applied nationally.
Additional Tax Advantages in Georgie, the following tax benefits can accrue to your business:
Free Industrial Zones (FIZs)
Establishing your business in FIZs means you will enjoy or be exempted from the following:
• Income or profit tax
• Corporate tax
• Reduced VAT rates
However, if you are a FIZ business that trades with non-FIZ businesses, you will be charged 4% of the market price of the goods you will supply to other businesses, this is according to Georgian law.
Special Trade Company
• Special trade companies are allowed to sell and re-export foreign goods
• They are exempt from paying income or profit tax on all incomes generated from selling and re-exporting foreign goods.
Given the numerous benefits you can enjoy by setting up a business in Georgia, you can now begin to research the best business idea that you can implement to begin reaping the above benefits. Contact an expert with vast knowledge in business set up Georgia to help you start enjoying all of the above benefits.