DOING BUSINESS IN BATUMI2011

CONTENT

Batumi Miracle

About Batumi Investment Agency (BIA)

Why Batumi?

Economic Snapshot

Business Rankings

Project Proposals

BATUMI MIRACLE

BATUMI INVESTMENT AGENCY (BIA)

Batumi Investment Agency (BIA) is the first point of contact for all foreign investors. It is the sole government agency responsible for promoting and facilitating foreign direct investments in Batumi and Ajara as a whole. BIA was launched in early 2011 and it acts as a “one-stop shop” for potential investors.

The main goal of our agency is to promote Batumi’s investment climate and investment opportunities abroad.

Furthermore:

• Facilitate visits by foreign investors, including organization of meeting with government officials, suppliers, potential partners and business chambers, among others;

• Provide assistance and informational support to foreign businesses before, during and after their entry to Batumi;

• Increase awareness of Batumi as an investment destination;

• Provide up-to-date information on the legal, tax and tariff frameworks of the city as well as other information necessary for making investment decisions;

• Offer investment opportunities to potential investors and arrange site visits for them.

BATUMI INVESTMENT AGENCY (BIA)

Strategic Geographic Location

7REASONS TO INVEST IN

BATUMI

WHY BATUMI?

Investor-Friendly Environment Liberal Trade Regimes

Low and Simple Taxes

Cheap and Competitive Labor Force

Abundance of Natural Resources A Unique Culture and Cosy Environment to Live and Work

Strategic Geographic Location

Batumi is a bridge

connecting several

important

economic

regions with more

than billion people,

including European

Union, CIS

countries, Turkey

and the Caucasus

Region.

Investor-Friendly Environment

Batumi’s safe and friendly environment plays

decisive role while considering it as an

investment destination. Investment-

Promotional Regime is widespread all over the

country and is highlighted in the law on

“Investment Activities and Guarantees”.

Liberal Trade Regimes

Batumi an attractive production

platform to serve diverse

markets.

• Low tariffs• Streamlined border clearance procedures • MNF Tariffs with WTO members• GSP with the USA, Canada, Switzerland, Norway and Japan • GSP+ the EU and Turkey• FTA with CIS countries (except Russia)• FTA with Turkey • ISA and DTAA with various countries

Low and Simple Taxes

The taxation framework in Georgia is as follows:

20% flat personal income tax decreasing to 15% (2014)

18% VAT

15% corporate income tax

5% interest income and dividend tax rates decreasing to 0% by

2014

1% (max) property tax

0% dividend income tax on dividends from publicly-traded

equities

0% tax on interest income from bank deposits and publicly-

traded debt securities

0% capital gains tax

0% social insurance or similar taxes

0% wealth tax

In 2005 Georgia enacted a new tax code, which introduced lower, flat-tax rates and significant procedural and institutional innovations.

Cheap & Competitive Labor Force

o The most liberal Labor Code worldwide

o Labor Freedom Index (99.9) > world average (60)

o Leading Adult Literacy Rate indicator (2006 Human Development

Report)

Abundance of Natural Resources

Batumi is rich with diversity of natural resources. Abundance of fresh water and hydro-mineral deposits grant Batumi competitive advantage while comparing to other investment destinations. In spite of such diversity, wealth and healing qualities, only few mineral waters are being utilized commercially.

A Unique Culture and Cosy Environment to Live and Work

Since ancient times Georgia has preserved its unique culture and traditions. So the tradition of hospitality, warm climate of the city and beautiful landscapes makes Batumi attractive place to live and work.

ECONOMIC SNAPSHOT

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BUSINESS RANKINGS

“Ease of Doing Business 2011” (IFC/World Bank) – 12th place (out of 183 economies)

“Index of Economic Freedom 2011” (Heritage Foundation) – 29h place (out of 179 economies)

“The Enabling Trade Index 2010” (World Economic Forum) – 37thplace   

“Corruption Perception Index 2010” (Transparency International) – 68th place out of 178 economies

• Long-term foreign and local currency

Issuer

Default Ratings (IDRs) – 'B+‘.

• Short-term foreign currency IDR - 'B‘

• Country Ceiling - 'BB-‘ ( upgraded from

'B+ )

2011

PROJECT PROPOSALS – Free Industrial Zone

Proposed free industrial zone15 ha

Khelvachauri industrial zone

Vil.Mejinistskali

Vil.Kakhaberi

Batumi A

khaltsikhe Highw

ay

Located in Khelvachauri district near Batumi along the road of strategic importance by which the Caucasus is connected to Eastern Europe

Area of FIZ = 15 ha

8 km from Batumi Sea Port 3 km from Batumi Airport 4 km from Railway 15 km from Georgian-Turkish border

Probable leasing term = 49 years

15 ha of land with developed transport infrastructure

At least 2 500 new jobs

Development of 15 ha territory within 2 years

Leasing price 1 GEL/0.57 USD for m2 per year

PROJECT PROPOSALS – Ski Resort Development

Master plan prepared by the HOK Planning Group Plan aims to maximize the opportunities of the site for a four-season resort

Goderdzi Pass, located two hours drive from Batumi

At an elevation of 2000m, the mountains are snow-covered from November to April.

The wilderness setting offers the visitor unique experiences, fresh-air and world-class scenery.

PROJECT PROPOSALS – Free Touristic Zone

Kobuleti is a seaside health resort on Black Sea just 20 min from Batumi

Average temperature in August is +25 C

Resort Priority-warm and humid climate

Development area of 11.3 ha for 30 hotels

Investment range 1-3 million USD Completion of works within 15

months since signing the contract.

Free Land Free Hotel Master Plan No Profit and Property taxes

for 15 years Fully Provided engineering utility

networks and corresponding outdoor infrastructure such as electricity, gas, water and new roads

Batumi Investment Agency (BIA)74, Gogebashvili str., 6010 Batumi, GeorgiaTel: +995 422 27 72 09Mob: +995 93  23 32 32E-mail: lputkaradze.mofea@gmail.comSkype: lelaputkaradze