Free Industrial Zones in Georgia: Tax Benefits and Opportunities

Georgia's Free Industrial Zones (FIZ) offer some of the most attractive tax incentives in the region. For businesses focused on manufacturing, logistics, or export activities, these zones provide a powerful framework for tax optimization.

What Are Free Industrial Zones?

Free Industrial Zones are designated areas within Georgia where businesses enjoy significant tax benefits and simplified customs procedures. Currently, Georgia has four operational FIZ:

Poti Free Industrial Zone - Black Sea port city
Kutaisi Free Industrial Zone - Central Georgia
Tbilisi Free Industrial Zone - Capital city
Hualing FIZ (Kutaisi) - Chinese-Georgian partnership

Tax Benefits

Corporate Income Tax: 0%

Profits generated within the FIZ are completely exempt from corporate income tax. This applies to:

Manufacturing activities
Processing and assembly
Wholesale trade within the zone
Logistics and warehousing

VAT: 0%

Transactions within the FIZ and exports are VAT-free:

No VAT on goods and services within the zone
No VAT on exports from the zone
Simplified VAT recovery for imports intended for re-export

Import Duties: 0%

Goods imported into the FIZ are exempt from customs duties:

Raw materials
Components and parts
Machinery and equipment
Finished goods for re-export

Property Tax: 0%

Real estate and fixed assets within the zone are exempt from property tax.

Who Can Benefit?

FIZ are ideal for:

Manufacturers producing for export
Trading companies engaged in re-export
Logistics providers serving regional markets
Assembly operations combining imported components
IT companies with hardware components

Requirements and Restrictions

Permitted Activities

Manufacturing and processing
Wholesale trade
Logistics and warehousing
Packaging and labeling
Quality testing

Restrictions

Retail sales to Georgian market - goods sold domestically lose tax benefits
Services to Georgian residents - some limitations apply
Minimum investment may be required depending on the zone

Setting Up in a FIZ

Step 1: Choose Your Zone

Consider location, infrastructure, and target markets:

Poti - Best for sea freight and regional trade
Kutaisi - Central location, lower costs
Tbilisi - Proximity to capital, airport access

Step 2: Apply for FIZ Status

Submit business plan to zone administrator
Demonstrate qualifying activities
Meet minimum investment criteria (varies by zone)

Step 3: Register Your Company

Standard Georgian company registration
Additional FIZ-specific registration
Obtain necessary licenses

Step 4: Begin Operations

Set up facilities within the zone
Import equipment duty-free
Start production/operations

Real-World Example

A European electronics company established assembly operations in Poti FIZ:

Before: Manufacturing in high-tax EU country
After: Assembly in Georgia with 0% corporate tax
Savings: Over €500,000 annually in taxes
Additional benefits: Duty-free component imports, easy access to CIS markets

Combining with Georgia's Tax Treaties

Georgia has double taxation treaties with 56 countries. This means:

Dividends can be repatriated with minimal withholding
No double taxation on profits
Enhanced credibility with international partners

Is a FIZ Right for You?

Consider a FIZ if you:

Focus on export markets
Have manufacturing or assembly operations
Deal in physical goods
Want maximum tax efficiency
Target CIS, Middle East, or Asian markets

How We Can Help

TaxWizzards provides comprehensive FIZ advisory services:

Zone selection analysis
Business structure optimization
Registration and licensing
Ongoing compliance support
Customs and trade facilitation