The Concept of Investment and the Subjects of Investment Activity
The Georgian law on the promotion and guarantees of investment activity treats as an investment every kind of property and intellectual value or right that is invested and used for the purpose of deriving profit in entrepreneurial activity carried out on the territory of Georgia. Such values may be monetary funds, shares, stocks and other securities; immovable and movable property — land, buildings and structures, equipment; the right to use land or other natural resources, including a concession; a patent, a licence, know-how, experience and other intellectual values.
An investor is a natural or legal person, as well as an international organisation, that makes investments in Georgia. A foreign investor, under the law, is a citizen of a foreign state, a stateless person who does not permanently reside in Georgia, a citizen of Georgia permanently residing abroad, and a legal entity registered beyond the borders of Georgia. On the territory of Georgia an investment may be made in an object of any form of ownership unless it is prohibited by law; for the objects listed by the law, investment is possible only on the basis of an appropriate special permit or licence.
Rights and Guarantees of the Investor
In carrying out investment and entrepreneurial activity the rights and guarantees of a foreign investor may not be less than the rights and guarantees enjoyed by natural and legal persons of Georgia. An investor has the right to open current and other accounts with banking institutions in any currency, to take loans from banking and financial institutions in Georgia and abroad or from natural and legal persons, and to acquire shares, bonds and other securities as well as property both in Georgia and abroad.
The rights to possess, use and dispose of the results of investment may, by decision of the investor and in the manner prescribed by law, be transferred to another legal or natural person, and the relations of the parties in such a transfer are governed by contract. After the payment of taxes and mandatory fees, a foreign investor has the right to convert profit and other monetary funds at the market rate and to repatriate them abroad without restriction, as well as the right to take property in his or her ownership abroad. That right may be restricted only on the basis of law by a court decision in connection with bankruptcy, the commission of a crime or the non-performance of a civil obligation. The investor, for its part, must conduct activity in accordance with the legislation in force, including the rules on the protection of the environment and of health.
The law defines the objects of repatriation precisely: any contribution to the capital of an entity created by a foreign investment, any profit and dividend, funds remaining after the full or partial sale or the liquidation of the investment, contractual payments connected with loan obligations, and payments for the use of property, including a percentage of the income derived from natural resources and intellectual values and rental payments. The law thus follows the investor's financial flows in their entirety, from contribution to dividends and liquidation balances.
State Support and the Investment Center
State policy connected with the elaboration and implementation of state programs for the promotion of investment activity is carried out by the Ministry of Economy and Sustainable Development together with the relevant agencies. For the purpose of promoting investments, the Georgian Investment Center operates under the Ministry of Foreign Affairs: it services investors, presents Georgia as a favourable country for investment, disseminates information on the investment environment, the legislative framework and the tax system, identifies potential partners in Georgia and abroad, issues recommendations for participation in joint investment projects and prepares proposals for improving the investment climate for the legislative and executive authorities.
This institutional system gives the investor both legal guarantees and a practical anchor: the normative framework defines the rules of the game, while the Investment Center provides informational and organisational support at the various stages of a project, from the first market study to the search for local partners.
Frequently Asked Questions
Who counts as a foreign investor?
A citizen of a foreign state, a stateless person not permanently residing in Georgia, a citizen of Georgia permanently residing abroad, and a legal entity registered outside Georgia.
Can profit be taken out of the country?
Yes. After the payment of taxes and mandatory fees a foreign investor has the right of unrestricted repatriation; restriction is possible only by a court decision in the cases defined by law.
In which forms of ownership may investments be made?
In objects of any form of ownership unless prohibited by law; for specially listed objects a special permit or licence is required.
Where can information on investing be obtained?
From the Georgian Investment Center operating under the Ministry of Foreign Affairs, which disseminates information on the investment environment and the legislative framework.
How We Help on Legal.ge
The lawyers of Legal.ge accompany investors at every stage of a project: we conduct legal due diligence of the target, draft contracts, assess whether licences or permits are needed and structure repatriation matters. Contact us: we will review your investment plan and assess the legal risks so that the project rests on a solid foundation from the outset.