The price for this service starts at US$ 2,000
Georgian Free Industrial Zones (FIZ) are territories where resident companies can significantly reduce their tax burden. Companies registered in a FIZ become exempted from the following taxes: the VAT, the income tax, the dividend tax, and the property tax. Kutaisi Free Industrial Zone is located on the premises of a former motorcar factory, and there you will find all the infrastructure necessary for conducting a successful business. There are office buildings on the territory as well as warehouses and convenient access ways for trucks and railroad cars. All the utilities are also available including the Internet connection. In addition, Kutaisi FIZ compares favorably with other Georgian Free Industrial Zones having a simpler company registration procedure. Here the resident company purchases a universal license that entitles its holder to any (legal) type of business activity. At the same time, other Free Zones issue separate licenses – general or special – to trade, manufacture, and service businesses. Besides, Kutaisi is attractive for the lower costs of renting office space and land lots. Having a company registered in Kutaisi FIZ, you can thus establish a legal entity that can have business with foreign (i.e. non-Georgian) partner companies paying virtually nothing in taxes. Manufacturing firms can obtain the “Made in Georgia” label for their produce, which will give them one more competitive advantage. This label allows exporting goods manufactured on the Georgian territory to a large number of countries without customs duties. Georgia has made free trade agreements with the EU, CIS, and EFTA countries as well as China and Turkey. Negotiations are underway about signing such agreements with India and Israel.
We have an exclusive offer for you to register a business company in Kutaisi Free Industrial Zone. The price of this service starts at US$ 2,000 USD. Another US$ 500 have to be added to this sum if a legal entity is among the company constitutors. You will also have to pay US$ 4,000 for the universal license issued by the FIZ administration.
Our experts have vast experience in registering companies in Georgian Free Industrial Zones. We will be happy to draft all the constitutive documents for you, have the company registered with the Georgian Public Registry and sign the agreement with the FIZ administration on your behalf. Having a company registered in Kutaisi FIZ usually takes only two 2 working days. After that you will receive the Company Charter, the Memorandum and Articles of Association, the extract from the Public Registry with the legal information about your company and the universal license from the FIZ administration.
Introducing Kutaisi Free Industrial Zone in Georgia
The Georgian Government Decree № 106 from June 5, 2009 established Kutaisi FIZ. This Decree granted “Georgian International Holding”, Ltd. 270,000 square meters (323,000 sq. yards) of land on the premises of a former motorcar factory on a 99-year lease. The Holding received the status of FIZ administrator and undertook to make the Zone ready for operations before December 1, 2009. By that date all the infrastructure required for conducting business by resident legal entities and sole proprietors was to be in place, including offices furnished and equipped with computers. Customs checkpoints were to be built and the Zone territory fenced. Round o’clock security surveillance of the territory was also to be provided.
The Egyptian “Fresh Georgia”, Ltd. was the first large investor in this FIZ. The company built a household, gas, and electric equipment manufacturing plant on the territory of the Zone. Egyptian businessmen promised to invest over US$ 1 billion in Kutaisi FIZ building twelve factories there including one for production of MAN trucks. As of now, the promise is still to be kept. A large French company called Atlantic Georgia is also operating in Kutaisi FIZ. It manufactures electric heaters and boilers. Apart from these, textile manufacturers (making blankets, plaids, mattresses, etc.), and a medium-size metallurgic plant are residents of this FIZ.
It is 10 kilometers (6.2 miles) from the Zone to Kutaisi international airport where a cargo terminal will be built in the near future. The city of Poti – the largest seaport in Georgia – is located 95 kilometers (less than 60 miles) away from Kutaisi, and the capital city of Tbilisi is 210 kilometers (130 miles) away. A railroad line comes right into Kutaisi FIZ and it can accept cargo trains with multiple cars. Besides, the Zone is located close to highway Е60 – Europe’s second largest transit route. This road starts in Brest, France, and runs all the way down to Irkeshtam, Kyrgyzstan. More than 60% of international cargo is transported via this highway.
There is one more Free Industrial Zone that shares the former motorcar plant territory with Kutaisi FIZ. Its name is Kutaisi Hualing FIZ, and it is run by Hualing Group, China.
Advantages of Kutaisi FIZ for company formation in Georgia
The main advantage a company registered in Kutaisi FIZ receives is exemption from almost all taxes, if (and only if) the company sells its goods or services outside Georgia. This is a healthy opportunity to reduce your production costs because being registered in this Zone you would not have to pay the following duties levied on mainland companies in Georgia:
- 18% VAT;
- 15% income tax;
- 5% dividend tax ;
- 0% to 12% customs duties.
Here are a few more nice perks that may also be interesting:
- Kutaisi FIZ resident companies do not have to file financial reports, thus the bookkeeping costs can be kept down;
- These companies do not have to hire Georgian citizens;
- Any form of company ownership is acceptable; legal entities or private individuals, Georgians or foreign citizens can be the company constitutors;
- There is no lower (nor higher) limit requirements to the resident company registered capital;
- It is the responsibility of the company salaried staff to declare their income to the authorities and pay the tax;
- The price of utilities in the FIZ is lower, because the utility providers are exempted from the VAT;
- Unlike other Georgian Free Zones, Kutaisi FIZ issues only one universal license that is valid for any type of (legal) business activity;
- Kutaisi FIZ enjoys direct access to the longest railroad line among all Georgia Free Industrial Zones;
- Its infrastructure is very well thought out. Here you can find large warehouses and smaller storage containers, spacious offices and hallways, and small smart offices. There are also vacant land lots where you can put buildings that your company production process requires (you have to obtain a construction permit for that though);
- All the utilities are available: electricity, gas, water supply, Internet connection, and so on. In addition, there are brokerage and security services available in the Zone;
- Customs checkpoint is in operation round o’clock, seven days a week;
- It is possible to obtain a “Made in Georgia” certificate for the products manufactured on the territory of Kutaisi FIZ that gives the exporter a major competitive advantage.
Any type of business activities is allowed inside the Zone apart from manufacture and sales of weapons and ammunition, and also drugs, psychotropic or nuclear substances, and excisable goods. Interestingly, no-one is allowed to reside in the Zone, but this is not a problem at all as you can easily find a rental apartment in the city outside the FIZ. Another advantage Kutaisi has is lower prices for food, clothing, and rent compared to the capital city of Tbilisi, or the resort city of Batumi.
The costs of having a company registered in Georgia in Kutaisi FIZ
To have a business company registered in this Free Industrial Zone and gain access to all the tax benefits that it provides you will have to cover the following costs:
- Company registration – US$ 2,000 (a single flat payment); if there is a legal entity among company constitutors, another US$ 500 is due;
- Universal license – US$ 4,000 (it is valid for one year and has to be renewed annually);
- A corporate account in one of the leading Georgian banks – US$ 1,500 (a single flat payment).
Even though the prices in Kutaisi FIZ are comparatively lower, you should bear in mind the rent and the utility costs. Also please remember that the generous tax exemptions are only effective for business dealings with foreign partners. Transactions between Kutaisi FIZ resident companies and Georgia resident ones are taxed 4%, and this is the tax on the contract price, not on the profit.
Manufacturers whose home country international agreements do not allow exporting the produce duty-free to certain markets, will be especially advised to obtain a “Made in Georgia” certificate. Goods of Georgian origin can be exported to the EU, CIS, and EFTA countries, China and Turkey without payment of customs duties.
Stages of company registration in Georgia, Kutaisi FIZ
A non-resident of Georgia wishing to have a business company registered in Kutaisi FIZ can save his or her time by applying for our remote company registration service. A notarized power of attorney has to be issued in the name of our representative in Georgia, and this paper will enable this person to carry out all the actions required for establishing a company in this country. The Kutaisi FIZ company registration procedure consists of the following steps:
- You send us a request to firstname.lastname@example.org.
- We ask you to fill in a short form where you should indicate the name of the prospective company, the type of its business activity, the type of the goods for sale (if you deal in trade), the company form of ownership, the constitutors’ and directors’ details (we can provide the nominee director service to you, if you like), your contacts, and some other relevant information.
- Our expert contacts you for clarification of certain issues and some additional information, if necessary.
- You cover the costs of our services against the invoice.
- Our lawyer prepares a power of attorney and sends it to you for notarization.
- You have the power of attorney notarized and send it back to us via an international postage service.
- Our lawyers draft the company constitutive documents and submit them for your endorsement.
- We have the company registered with the Georgian Public Registry of commercial and non-profit organizations. It is an open-access Registry and information about legal entities registered in Georgia can be obtained via the website: https://enreg.reestri.gov.ge.
- We submit the form you have filled in (see above) to the FIZ administration, and if they approve it (and they will), you pay the price of the license.
When the registration is complete we hand over the following documents to you: the new company Charter, the Memorandum and Articles of Association, an extract from the Registry, and the license.
Documents necessary to incorporate a company in Kutaisi FIZ, Georgia
For us to register a company in Kutaisi Free Industrial Zone you have to provide the following documents to us:
- If you are a private individual (or private individuals) registering a company – only your foreign passport(s);
- If you are a legal entity registering a company in Georgia, we need your company Charter, the Memorandum and Articles of Association, an extract from the home country Registry, and shareholders’ and company directors’ details.
After we receive all the papers, it usually takes us two working days to register a company in Kutaisi FIZ. So please contact us now and only in a couple of days you will have a powerful business instrument – a tax-exempt company in Georgia. It should also be kept in mind that Georgia does not automatically exchange its resident business people financial information with other countries. Nor does it intend to do so in the future. Thus, the information about the balance on your account, your turnover, your profit, etc. will remain confidential. If you want to establish a company in a Georgian tax-free zone, or if you have any questions, please write to us to email@example.com. We will be happy to assist you.