Purchasing investment property differs significantly from buying a home for personal use. The investor's primary goal is capital appreciation or generating regular income (rent/lease), so legal due diligence focuses not only on the cleanliness of ownership but also on the asset's commercial potential and risks. Georgia is an attractive market for real estate investment due to its liberal legislation and growing tourism. However, a successful investment requires deep legal analysis: checking zoning regulations, determining building coefficients, calculating tax obligations, and securing a legal Exit Strategy. A qualified lawyer helps the investor avoid "hidden pitfalls," such as future urban development plans that might reduce property value, or problematic lease agreements.
What does the Investment Property Purchase service cover?
This service is comprehensive legal support for investors, including:
- Deep Due Diligence: Detailed study of the property's history, current disputes, encumbrances, and third-party rights.
- Urban Planning Analysis: Assessing the development potential of the land or building (functional zone, building parameters - K1, K2, K3).
- Legal Protection of ROI: Auditing lease agreements or drafting new, "ironclad" lease contracts that ensure stable income.
- Tax Optimization: Structuring the investment to minimize property tax and income/profit tax.
- Building Permit Verification: If the investment is in a property under construction, controlling the legality and deadlines of the permit.
- Residency Issues: Procedural support for foreign investors to obtain a residence permit based on an investment of 300,000 USD (equivalent in GEL) or purchasing real estate worth 100,000 USD.
Common Scenarios and Needs
Investors often approach lawyers with the following tasks:
- Buy-to-Let: An investor buys several apartments for Airbnb or long-term rental. Contracts with management companies and tax registration (small business status for 1% taxation) are required.
- Commercial Property with Tenants: Buying an object that houses an operating business (e.g., a supermarket). The lawyer checks the stability of the lease and the solvency of the tenant.
- Land for Development: Investing in land to build a residential block or hotel in the future. It is critical to determine what can actually be built under local regulations.
- Remote Investment: A foreign investor buys property in Georgia without visiting. Reliable representation and secure fund transfer mechanisms are needed.
Georgian Legislation and Regulations
Investment transactions are regulated by the Civil Code of Georgia and the Law on Entrepreneurs (if the investor establishes a company). For foreign investors, the Law on the Legal Status of Aliens and Stateless Persons is important, defining criteria for investment residence permits. In the case of land plots, a restriction applies: the Law on Ownership of Agricultural Land prohibits selling agricultural land to foreigners. This factor is critical when planning an investment to avoid attempting to purchase an asset that cannot be registered. Also, the Tax Code provides for incentives in certain types of investment zones (e.g., Free Industrial Zones) or tourism projects.
Step-by-Step Process
The process begins with defining the investor's goals and identifying the appropriate object. Then, a full legal and technical audit is conducted. If the conclusion is positive, a purchase scheme is developed (direct purchase or establishing a company). A preliminary agreement is signed, and funds are deposited. After signing and registering the main contract, lawyers assist the investor in further asset management—signing lease agreements and registering for tax purposes. If a residence permit is desired, the relevant application is prepared for the Public Service Development Agency.
Why Legal.ge?
Legal.ge is your trusted guide to the Georgian investment market. We connect you with lawyers specializing in foreign investment and real estate. The specialists on our platform have experience managing complex investment portfolios and understand the needs of international investors. Protect your capital and maximize your returns with the help of Legal.ge experts.
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