investment climate & opportunities in georgia

Georgian National Investment Agency 2013

INVESTMENT CLIMATE &INVESTMENT CLIMATE &OPPORTUNITIES IN GEORGIAOPPORTUNITIES IN GEORGIA

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VESTORGIA

www.investi ngeorgia.org 1

ADVANTAGES OF GEORGIA

» Business friendly environment with low levels of taxation, simple and fair tax administration» Efficient, pro-business and corruption-free government» Enlargement of market size by Free Trade Agreements» Solid sovereign balance sheet» Stable and conservatively managed banking sector» Multi-modal maritime, land and air access infrastructure for trade, logistics and manufacturing» Stable and competitively priced energy supply» Flexible labor legislation» Very low crime rate

№1 REFORMER IN THE WORLD OVER THE PAST 5 YEARS – WORLD BANK

GEORGIA - SOVEREIGN CREDIT RATINGS

BB- Stable(Upgraded from B+ Positi ve

in December 2011)

Ba3 Stable(Affi rmed in August

2012)

BB- Stable (Upgraded from B+ Positi ve in November 2011)

IN IN GEO


DOING BUSINESS IN GEORGIA

Country’s impressive progress in improving business climate has been well documented in a number of internati onal indices.

EASE OF DOING BUSINESSEASE OF DOING BUSINESS INDEX OF ECONOMIC FREEDOMINDEX OF ECONOMIC FREEDOM

Source: World Bank, 2013 (Rank out of 183 countries)

Source: The Heritage Foundati on, 2013 (Rank out of 183 countries)

Up from 112 in 2005 Up from 99 in 2005

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VESTORGIA


CORRUPTION FREE COUNTRY

INDEX OF ECONOMIC FREEDOM

Georgia today is essenti ally a corrupti on-free investment desti nati on where rule of law have been given the right way

SRGIA

Percentage of users paying a bribe from in the past 12 months

Source: Transparency Internati onal’s Global Corrupti on Barometer , 2011 (Rank out of 176 countries)

GEORGIA SOUTHEAEST EUROPE+TURKEY EU

GLOBAL CORRUPTION BAROMETERGLOBAL CORRUPTION BAROMETER

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ECONOMIC STRUCTURE AND TRENDS

GDP: STRONG REBOUND IN 2010 AFTER A RELATIVELY SMALL CONTRACTION IN 2009, ROBUST GROWTH POTENTIAL

RAPIDLY GROWING GDP PER CAPITA

IN0

1,000

2,000

3,000

4,000

IN BROAD-BASED AND DIVERSIFIED NOMINAL GDP STRUCTURE 2011

STEEPER THAN EXPECTED GROWTH TRAJECTORY

Initi ally planned at 6%, Georgia’s GDP real growth in three quarters of 2012, equaled to 7.5%

2011 OUTCOMES: 2011 OUTCOMES: » Tax collecti on increased 26% y-o-y

» VAT turnover increased 26% y-o-y

» Commercial bank lending to the real sector increased 24% y-o-y

» Trade turnover increased 36% y-o-y

VESTORGIA


PREFERENTIAL TRADE REGIMES: PREFERENTIAL TRADE REGIMES: » FTA with CIS countries: Ukraine, Belarus, Azerbaijan, Armenia, Russia, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan

» FTA with Turkey

» DCFTA with EU will be signed next year

» Negoti ati on on FTA with USA is in progress

» GSP+ with EU - 7200 products to the EU market duty free or with lower tariff s

» GSP with USA, Norway, Switzerland, Canada, Japan - lower tariff s are applied on 3400 goods exported from Georgia to these countries

» Member of WTO

LIBERAL TRADE REGIMES

OPPORTUNITY - MARKET SIZE

Populati on of Georgia - 4,5 millionExisti ng FTA +350 millionDCFTA + 0,5billion

TOTAL ~ 0.9 BILLION

Georgia: 4,5 million population Access to the 0,9 billion market

A KET SIZE

lationmarket

CUSTOMSCUSTOMS» Very simple and service oriented customs policy and administrati on

» Almost no custom duty - 90 percent of goods free from import tariff s

» No quanti tati ve restricti ons

Georgia

IN IN GEO


TAXATION IS SIMPLE, LOW, EFFICIENT AND FAIR

» No payroll tax or social insurance tax

» No capital gains tax

» No wealth tax and inheritance tax

» Foreign-source income of individuals fully exempted

» Accelerated depreciati on on capital assets

» Loss carry forward for corporate profi t tax purposes (10 years)

» No restricti ons on currency converti bility or repatriati on of capital & profi t

» Double taxati on avoidance treati es with 40 countries

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LEADER IN FORBES RATING (TAX MISERY & REFORM INDEX)

VESTOR

VESTAccording to 2009 Tax Misery & Reform Index, released by Forbes Business & Financial News, Georgia is the fourth least tax burden country aft er Qatar, UAE and Hong Kong

IN IN GEO


LABOR AVAILABILITY

» Young labor – 50% of unemployed population are aged between 20-34

» Average monthly salary in 2011 – 377 USD

» Vocational Education Training Centers around Georgia provide professional courses in different types of practical subjects and most of the course’s fees are financed by the Government of Georgia.

GEORGIA - ONE OF THE MOST LIBERAL LABOR ENVIRONMENTS (3RD BEST GLOBALLY), ACCORDING TO THE HERITAGE FOUNDATION, 2012

O IN GEOIN GESource: MOF and Heritage Foundati on, 2012

GREATER LABOR FREEDOM

GEORGIA

FRONTIER MARKETS AVG

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» Strong and Rising FDI Stimulates Economic Prosperity

» Key Industries Benefit from FDI

» Reinvestment 30% (2011)

» Georgia has bilateral treaties on investment promotion and protection with the 32 countries (negotiations launched with 24 countries)

FOREIGN DIRECT INVESTMENT

FDI BREAKDOWN BY SECTORS 2011FDI BREAKDOWN BY SECTORS 2011 FAVORABLE FDI/GDP RATIOFAVORABLE FDI/GDP RATIO

GRGIA GGIAA

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TOURISM


INVESTMENT OPPORTUNITIES IN GEORGIA

MANUFACTURING

HYDRO POWER HUB

AGRICULTURE

REGIONAL SERVICE HUB

REGIONAL LOGISTICS CORRIDOR

VESTORGIA


HYDRO POWER HUB

SIGNIFICANT HYDRO POWER POTENTIALSIGNIFICANT HYDRO POWER POTENTIAL» Installed capacity of > 2,700 MW» Additional potential > 4,500 MW

Generation cost (0.06 USD) among the lowest in the region, ~50% lower than target market Turkey

EXPORT CAPACITYEXPORT CAPACITY

» The only net electricity exporter in the region, with rapidly growing consumption rates» Construction of 400 kV power transmission line from Georgia to Turkey to be completed in 2013

OPPORTUNITIESOPPORTUNITIES» Several large scale projects (> 100 MW)» ~ 70 small/medium projects (< 100 MW)

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OVERVIEW OF GEORGIA’S (HYDRO-) POWER SECTOR

• Domesti c: Demand growth and increasing share of renewables requires an extension of hydropower generati on by around 65% unti l 2020

• Export: Georgia is surrounded by countries with a projected structural power defi cit (e.g. Turkey, Russia South) or expensive power generati on, opening up att racti ve export opportuniti es

• Power generati on accounts for 3% of GDP and ~ 1% of employment but is of high strategic importance to Georgia

• ~ 10% of power producti on are exported, but Georgia sti ll needs to import power during winter

• Georgia boosts signifi cant and economically viable HPP potenti al – already today 75% of power generated via HPP (2,700 MW) – 25% via thermal (mainly gas)

• All new HPPs operate in a liberalized market

• Cost of hydropower generati on is very competi ti ve in the region

• FDI infl ows amounted to USD 200 million in 2011 and are growing

• 65% of economically viable potenti al not yet exploited

• Projects of up to USD 750 million have been concessioned to investors from e.g. India, Turkey, Czech Republic and other counti es.

• Pipeline well fi lled with several large scale projects (100-702 MW) as well as 70+ smaller projects

STRONG DEMAND STRONG DEMAND GROWTH PROSPECTSGROWTH PROSPECTS

IMPORTANCE OF IMPORTANCE OF THE SECTOR LOW IN THE SECTOR LOW IN TERMS OF GDP AND TERMS OF GDP AND EMPLOYMENTEMPLOYMENT

POWER SECTOR WITH POWER SECTOR WITH STRONG FOCUS ON STRONG FOCUS ON COST COMPETITIVE HPPCOST COMPETITIVE HPP

LARGE PROJECTS HAVE LARGE PROJECTS HAVE BEEN PLACED AND BEEN PLACED AND PIPELINE IS FILLEDPIPELINE IS FILLED

VESTORGIA


GEORGIA SURROUNDED BY COUNTRIES WITH A STRUCTURAL POWER DEFICIT OR EXPENSIVE POWER GENERATION

VR

1 Assuming current consumpti on and supply patt ern

2 This does not even include countries with heavily subsidized electricity generati on (e.g. Azerbaijan, Kazakhstan)

• Turkey expected to have defi cit of up to 80-120 TWh by 2020, with seasonality of its demand matching Georgia’s supply

• Russia’s Southern districts will also experience a structural defi cit of up to 40 TWh by 20201

• In other markets, Georgia’s hydropower is very cost-competi ti ve compared to local tariff s2

STRUCTURAL DEFICIT BY 2020 NO DEFICIT, BUT CURRENT TARIFFS >GEORGIA’S GENERATION COSTAD HOC DEFICITS PROJECTED

NO DEFICIT, BUT SUBSIDIZED TARIFFS

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HYDROPOWER PIPELINE BOOSTS SEVERAL NEW MEGAPROJECTS ABOVE 100 MW CAPACITY THAT ARE CURRENTLY OPEN FOR INVESTMENT

PROJECT PROJECT CAPACITYCAPACITY FORECAST INVEST. FORECAST INVEST. VOLUMEVOLUME

USD MILLIONSUSD MILLIONS

READY TO READY TO INVEST?INVEST?

• HYDROPOWER PIPELINE ALSO BOOSTS ~70 SMALL/MEDIUM PROJECTS (<100 MW CAPACITY) THAT ARE CURRENTLY OPEN FOR INVESTMENT

• NAMAKHVANI CASCADE 450 MW 926

• KHAISHI HPP 400 MW 620

• ONI CASCADE 270 MW 599

• NENSKRA HPP 210 MW 491

• TOBARI HPP 200 MW 310

• FARI HPP 180 MW 297

• LENTEKHI HPP 120 MW 189

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TOURISM

FAST GROWING SECTORFAST GROWING SECTOR

• Tourism contributes 6.7 % of GDP

• Number of visitors increased 38% in 2011 reaching 2.8 million and 56% in 2012 reaching 4.4 million

• Majority of visitors come from : Turkey (34.9%), Azerbaijan (21.2%), Armenia (20.5%), Russia (11.6%)

Europe (9.4 %)

• Average durati on of stay - 9 days, the median visitor stays - 2days / Average spend of USD 330

• Overall capacity of < 15,110 rooms

• Already operati ng internati onal brand hotels - Sheraton, Radisson, Marriot, Holliday Inn, (under constructi on - Kempinski, Hillton) etc.

POTENTIALPOTENTIAL

• Youth Olympics in 2015

• Free tourism zones – summer resorts

• Availability of gambling business – gaming is parti ally or completely banned in Russia, Ukraine, Azerbaijan, Kazakhstan,Turkey, Israel, Iran, Iraq

• 8 nati onal parks

• 2400 springs of mineral waters

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GEORGIA IS EXPECTING SIGNIFICANT GROWTH TRAJECTORY IN TOURIST ARRIVALS

INTERNATIONAL ARRIVALS INTERNATIONAL ARRIVALS HAVE SEEN ~40% YEAR-ON-YEAR GROWTH

TOTAL INTERNATIONAL TOURIST ARRIVALS NUMBER OF ARRIVALS INTO GEORGIA

IN GEO0.6

1.0 1.1 1.3 1.52.0

2.8

4.4

5.5

VESTORGIA


INTERNATIONAL LUXURY HOTEL CHAINS DOING WELL:MORE ARE COMING TO THE MARKET

VERBATIMS OF INTERNATIONAL HOTEL BRANDS IN GEORGIAVERBATIMS OF INTERNATIONAL HOTEL BRANDS IN GEORGIAUPCOMING UPCOMING INTERNATIONAL HOTEL INTERNATIONAL HOTEL BRANDS BEFORE 2015BRANDS BEFORE 2015

LOCATION

BATUMI

TBILISI

BATUMI

TBILISIBATUMI

TBILISI

“We have seen 7-8% more guests in our hotels every year. Business and leisure travelers are our two biggest client group and they come from all over the world. Best occupancy period is summer from May to September”

– Alexander KvaratskheliaMarketi ng Manager

“We have seen signifi cant increases in occupancy rate and fi nancials since 2010. This year [2012] high season has seen a very promising start. We have advance reservati ons booked for almost the whole summer”

– Omer Subasi General Manager

“ We are very opti misti c as demand has been increasing rapidly. Hotel occupancy hovers around 85%. Our guests come from all around the world representi ng various sectors including business, sportmen and tourists”

– Oto BerishviliSales & Marketi ng Manager

HOTEL CHAIN HOTELIER’S ASSESSMENT OF PERFORMANCE

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INVESTMENT OPPORTUNITIES IN TOURISM SECTOR

“SUN-BEACH” RESORTS

Expansion of summer ”sun and beach” franchise focusing on high-end segment

• All inclusive summer resorts• New master resort development

• Batumi• Anaklia• Kobuleti • Other Black Sea locati ons

WINTER SKI RESORTS

Master development of winter resorts with unique profi le equivalent to the Alps

• Government is fully committ ed to provision of basic infrastructure

• Mesti a• Gudauri• Bakuriani• Goderdzi

SUMMER MOUNTAINS RESORTS

Four season resort value prepositi on

• Majesti c landscapes allowing for a wide range of summer tourism acti viti es such as trekking, horse riding, bird watching and river racing

• Mesti a• Gudauri• Bakuriani• Goderdzi• Kazbegi• Other locati ons

SPA RESORTS

Development of Spa Resorts

• Include hotels, Diff erent types of Clinics, fi tness,Outdoor acti viti es

• Tskaltubo• Akhtala• Other locati ons

REGIONAL CASINO CITY

Development of large-scale integrated casino complex to Serve regional markets.

• Include hotels, casino entertainment, family Services and shopping• Fiscal incenti ves available

• Batumi • Tbilisi• Other locati ons

DES

CRI

PTIO

NPO

TEN

TIA

L LO

CAT

ION

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Poti

Batumi

Armenia Azerbaijan

Russia

Turkey

Black Sea

Kutaisi

MRN Railway

Kulevi

Tbilisi

FIZ FIZ

MANUFACTURING SECTOR

OVERVIEW:OVERVIEW:

• Manufacturing and industries account for around 14% of GDP and ~ 5% of employment

• Largest industries are food and beverages (3% of total GDP) and metal products (2.5%)

• Advantage to process goods - competi ti ve cost of power, labor and strategic locati on

• 2 Free Industrial Zones - In FIZ, businesses are exempted from all tax charges except Personal Income Tax

OPPORTUNITIES:OPPORTUNITIES:

• Large import overhang in goods that are usually not traded extensively provides regional import substi tuti on potenti al in food processing, constructi on materials, household gods etc

• Georgia’s current advantages in terms of handling large transshipment fl ows, business stability, low cost of power generati on and existi ng raw materials/intermediate products provide opportuniti es for large industrial bets, like producti on of iron and steel products, aluminum etc

Mestia

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TRADE BALANCE IN GEORGIA AND IN THE REGION

IMPORT OVERHANG, USD IMPORT OVERHANG, USD mlnmln, 2011 , 2011 TRANSPORTATION TRANSPORTATION COSTCOST

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VESTORGIA


SEVERAL HIGHLY ATTRACTIVE IMPORT SUBSTITUTION OPPORTUNITIES

Constructi on - Building materials

Constructi on - Finishing elements

Food processing

Packaging

SECTOR PRODUCT GROUP PRODUCTS SECTOR PRODUCT GROUP PRODUCTS

• Arti cles of cement and steel

• Arti cles of wood

• Ceramic products

• Glass & glassware

• Furniture

• Beverages and spirits

• Preparati ons of fruits and vegetables

• Dairy and eggs

• Meat

• Plasti c packaging• Paper packaging

• Prefabs

• Ready-mix concrete

• Bricks

• Finished arti cles of steel

• Plywood and laminated wood

• Tiles • Sanitary ware

• Windows • Glassware

• Doors • Living furniture

• Bott ling

• Fruit juices • Jams• Vegetable oils

• Milk • Cheese • Butt er • Yogurt

• Poultry/Beef/Pork/Lamb

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SEVERAL OPPORTUNITIES ARISING FROM GEORGIA’S TRANS-SHIPMENT FLOWS AND RESOURCES

OPPORTUNITY CURRENT ADVANTAGES TO BE LEVERAGED POTENTIAL FOR GEORGIAOPPORTUNITY CURRENT ADVANTAGES TO BE LEVERAGED POTENTIAL FOR GEORGIA

ALUMINIUMALUMINIUMINDUSTRYINDUSTRY

IRON AND STEEL IRON AND STEEL PRODUCTIONPRODUCTION

COPPERCOPPER

POLYMERS & POLYMERS & OTHER PLASTICSOTHER PLASTICS

• Large transshipment fl ows of raw materials/input (Bauxite) and aluminium cross Georgia to/from Tajikistan (largest aluminium plant in Central Asia)• A lot of water recourses and large hydropower plants in the pipeline

• Georgia mines Manganese ore• Georgia produces ferro alloys, largely for export (USD ~250 mn)• Large imports of iron and steel products to Georgia (USD ~300 mn) and neighboring countries

• Georgia and Armenia export copper ores, copper waste and scrap• Import overhang of copper products (alloys and fi nal products e.g. wire, tubes, pipes) amounts to USD ~200 mn in the region

• Import overhang of plasti c products amounts to 230 mn in Georgia and 8 bln in the region• Georgia transships large fl ows of petroleum products

• Value chain integrati on- Producti on of aluminium- Producti on of aluminium products (fabricated or end products)

• Verti cal integrati on of value chain by adding producti on of iron and steel and related end products• Regional import substi tuti on

• Producti on of copper alloys and end products (regional import substi tuti on)

• Plasti cs and petrochemicals producti on (regional import substi tuti on for plasti cs/rubber)

VESTORGIA


OPPORTUNITY CURRENT ADVANTAGES TO BE LEVERAGED POTENTIAL FOR GEORGIA

AGRICULTURE

OVERVIEW:OVERVIEW:

• Over 21 micro-climates - a wide range of grain, vegetables, hard and soft fruits, meat and dairy could be farmed

• Agriculture accounts for 9% of GDP. It contributes ~53% of employment mostly in subsistence farming (average farm size of 1.22 ha)

• Traditi onally Georgia has strengths in wine, nuts, fruits which account for more than 60% of agriculture exports

• The average gross monthly salary in the agricultural sector in Georgia is USD 220

OPPORTUNITIES:OPPORTUNITIES:

• Import substi tuti on opportuniti es - meat, dairy products, onions, potatoes etc

• Export opportuniti es - traditi onal strong sub-sectors, like wine, walnuts, hazelnuts, sheep meat, etc

• Producti vity gain opportuniti es – tomatoes, apples, cucumbers, stone fruits, citrus etc

IN IN GEO


14 POTENTIAL PRIORITIES CROPS/LIVESTOCK TO FOCUS DEVELOPMENT EFFORTS

HIGH POTENTIAL PROJECTS GEORGIA’S COMPETITIVENESS HIGH POTENTIAL PROJECTS GEORGIA’S COMPETITIVENESS

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REGIONAL COMPETITIVENESS AND POTENTIALS MAP

CROP POTENTIALS BY REGION

BASED ON REGIONAL SPECIALIZATION (NATURAL ENDOWMENTS, CULTIVATION HISTORY), PRODUCTIVITY AND SEASONALITY

VESTORGIA

C O O S G OC O O S G O

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INREGIONAL LOGISTICS CORRIDOR

TRANS-CAUCASIAN ROUTETRANS-CAUCASIAN ROUTE

• Latent gateway between Europe and Central Asia

• Around 80% of port cargo and 60% of freight rail are transits

TRANSPORT INFRASTRUCTURETRANSPORT INFRASTRUCTURE

• Rapidly developing road infrastructure

• Ports are cost-competi ti ve vs. alternati ve routes

• FDI infl ows in the logisti cs sector have primarily targeted transport infrastructure

OPPORTUNITIESOPPORTUNITIES

• Deep-sea port with PanaMax vessel

• Containerizati on and logisti cal centers

• Direct connecti on with European and Central Asian railway networks

VESTORGIA


GEORGIA’S TRANSPORT INFRASTRUCTURE

MODE OF TRANSPORT MODE OF TRANSPORT EXISTING INFRASTRUCTURE EXISTING INFRASTRUCTURE AND FLOWSAND FLOWS

UPGRADESUPGRADES

RAILRAIL• 1,500 km (90% electrifi ed)• ~7,000 rolling stock, 180 locosROADROAD• 1,500 km internati onal road + 20,000 km internal and local roads

POTI SEAPORTPOTI SEAPORT• 13 berths, 8-10m depth• Container and bulk (210k TEU)• Owned/operated by Maersk/RAKIABATUMI SEAPORTBATUMI SEAPORT• 5 berths, 1 off shore mooring, 11m depth• 90% petroleum/oil, 10% containers (44k TEU) • Operated by JSC KazTransOilKUHLEVI SEAPORTKUHLEVI SEAPORT• Crude oil, petroleum, and lubricants• Owned/operated by State Oil Company Azerbaijan

TBILISI INTERNATIONAL AIRPORTTBILISI INTERNATIONAL AIRPORT• ~1 mn passengers (capacity: 3 mn)• Serving 28 desti nati onsBATUMI INTERNATIONAL AIRPORTBATUMI INTERNATIONAL AIRPORT• 100,000 passengers

RAILRAIL• BTK connecti on to Turkey• Modernizati on• Tbilisi bypass• ~2500 new rolling stockROADROAD• East-West highway upgrade

POTI SEAPORTPOTI SEAPORT• New container berth (2014)

DEEP-SEA PORTDEEP-SEA PORT• Min. 2 berth of 20m depth (PanaMax)• First phase: Dry bulk (10m tons) and containers (200k TEU)• USD 200 mn investment volume

KUTAISI INTERNATIONAL KUTAISI INTERNATIONAL AIRPORTAIRPORT• Passenger, incl. low-cost airlines• Currently under constructi on

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CARGO TURNOVER

TRANSIT FLOWS THROUGH THE CORRIDOR (MILLION TONS PER YEAR)

CENTRAL ASIACENTRAL ASIA

KazakhstanUzbekistanTajikistanKirgizstanTurkmenistan

CAUCASUS:CAUCASUS:AzerbaijanArmenia

Europe+TurkeyEurope+TurkeySender - 2.6Sender - 2.6

Destination - 4.1Destination - 4.1Total - 6.7Total - 6.7

Central Asia+CaucasusCentral Asia+CaucasusSender - 9.6Sender - 9.6

Destination - 4.7Destination - 4.7Total - 14.3Total - 14.3

APPROXIMATELY 80% ARE TRANSIT FLOWSAPPROXIMATELY 80% ARE TRANSIT FLOWS

VESTORGIA


CENTRAL ASIA

CAUCASUS:

ANNUAL CARGO FLOW OF CAUCASUS & CENTRAL ASIA

EXPORTEXPORT

EU 15%

IMPORTIMPORT

Other Regions 85%

EU 22%

Other Regions 78%

*Source : IGC TRACECA

Export Import Grand Total

TOTAL 255 ml. ton 68 ml. ton 323 ml. ton

EU 56 ml. ton 10 ml. ton 66 ml. ton

AU 1

Other Regions 8I t G d T t l

EU

Other Regions

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INO


GEORGIA SERVES AS THE ENTRY GATE TO A LANDLOCKED REGION BOOSTING SIGNIFICANT RESOURCE RESERVES

FOR COMPARISON:

REGION REPRESENTSONLY ~1.6% OF

GLOBAL POPULATION

FOR FOR COMPARISON:COMPARISON:

REGION REPRESENTSREGION REPRESENTSONLY ~1.6% OF ONLY ~1.6% OF

GLOBAL GLOBAL POPULATIONPOPULATION

VESTORGIA

GEORGIA IS IN A HIGHLY STRATEGIC LOCATION FOR TRANSSHIPMENT


STRATEGIC LOCATION: IT SERVES AS AN ENTRY GATE TO THE CAUCASUS AND STRATEGIC LOCATION: IT SERVES AS AN ENTRY GATE TO THE CAUCASUS AND CENTRAL ASIA AS WELL AS A STEPPING STONE TO THE REGIONCENTRAL ASIA AS WELL AS A STEPPING STONE TO THE REGION

LEVERAGING ITS LOCATION, GEORGIA’S TRANSPORT ECONOMY CAN BENEFIT LEVERAGING ITS LOCATION, GEORGIA’S TRANSPORT ECONOMY CAN BENEFIT FROM LARGE ADDRESSABLE TRANSIT FLOWS, GROWING ECONOMIES AND FROM LARGE ADDRESSABLE TRANSIT FLOWS, GROWING ECONOMIES AND LANDLOCKED RESOURCESLANDLOCKED RESOURCES

THE SHORTEST ROUTE BETWEEN EUROPE AND CAUCASUS/CENTRAL ASIATHE SHORTEST ROUTE BETWEEN EUROPE AND CAUCASUS/CENTRAL ASIA

GREAT POTENTIAL OF BETTER INTEGRATION AND DEVELOPMENT GREAT POTENTIAL OF BETTER INTEGRATION AND DEVELOPMENT OF THE REGIONOF THE REGION

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REGIONAL SERVICES HUB

• Georgia’s service sector achieves leading ranks among regional economies in terms of value added and trade

• Services have major share of FDI infl ow of 45% in 2011 with USD 500 million:

• OPPORTUNITY TO CAPITALIZE:OPPORTUNITY TO CAPITALIZE:

» Financial services/headquarters » Retail hub as the desti nati on-of-choice for shopping

» Financial services have grown at 19% p.a. since 2009 and is the leading service sub-sector for FDI att racti on with 15% of total infl ows in 2011

» Consultancy services att racted 12% of total FDI infl ows in 2011

» Wholesale/retail trade accounts for 40% of service GDP, and strong FDI infl ows rebound at 48% p.a. since 2009

» FDI infl ows in healthcare/social work have grown at 146% p.a. since 2007

VESTORGIA

OPPORTUNITY TO POSITION GEORGIA AS A REGIONAL RETAIL DESTINATION

GEORGIA - REGIONAL RETAIL HUBGEORGIA - REGIONAL RETAIL HUB

Benefi ts of desti nati on mega mall development• Complement overall tourism strategy with solid retail value propositi on• Retail magnet for foreign tourists and affl uent local with longer durati on of visit (1/2 to 1 day), higher share of wallet, and repeated visits• Presence of fl agship brands will drive retail brand cluster growth

Tbilisi and Batumi as most potenti al locati ons• Established tourist desti nati ons with 80% of foreign tourist traffi c in Georgia• Accessible with existi ng internati onal airports and major transnati onal highway/ railway• Solid retail, hospitality and other supporti ng services infrastructure• Integrati on with other tourism off erings e.g. sun & beach, casino• Easier to drive investments

STGIA


Vision is to develop mega malls in key locati ons to transform Georgia - into the regional retail hub leveraging high traffi c of foreign tourists and strategic geography

BATUMI TBILISI

IN IN GEO


GEORGIAN NATIONAL INVESTMENT AGENCY

• State agency- Promoti ng Georgia internati onally- Supporti ng foreign investments and investors before, during & aft er investment process

• “One-stop-shop” for investors

• Moderator between Investors, Government and Local Companies

Mission - Attracting Greenfield and M&A Investments

INVESTORS

GOVERNMENT

GNIALOCALCOMPANIES

VESTORGIA


» INFORMATION• General data• Stati sti cs• Sector Researches

» COMMUNICATION• Access to Government of Georgia at all levels• Local partners (Business Associati ons, private companies)

» ORGANIZATION OF SITE VISITS AND ACCOMPANYING INVESTORS

» AFTER CARE• Legal advising• Supporti ng services

WHAT YOU CAN GET FROM GNIA

INVESTIN GEORGIA

GEORGIAN NATIONALGEORGIAN NATIONALINVESTMENT AGENCYINVESTMENT AGENCY

www.investingeorgia.orgwww.investingeorgia.org

E-mail: enquiry@investi ngeorgia.org

investment climate & opportunities in georgia

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