Manufacturing

Georgia – snapshot 2015

Population: ~ 3.8 mln

GDP: USD 13.9 bln (2015 )

GDP/Capita (PPP 2015): ~ USD 9,160

GDP growth: 2.8% (2015*)

FDI: USD 1.4 bln (2015)

Export: USD 2.2 bln (2015)

Import: USD 7.7 bln (2015)

Unemployment rate: 12.0% (2015)

*Preliminary Data Sources: National Statistics Office of Georgia, World Bank

Growing Economy

#24

Doing Business

Georgia is one of the leading

countries in the world in

terms of starting a business,

dealing with bureaucracy and

the number of procedures

required to launch and

operate an enterprise

Up from #112 in 2005

Business Friendly Environment

#23

Economic Freedom

Majority of Georgia’s reforms

are oriented on the

development of free, open

and transparent, private-

sector driven market

economy

Up from #99 in 2005

#48

Corruption Perception

Alongside recognitions as the

top reformer in the world,

Georgia is the leader in the

wider region in terms of

fighting with corruption

Up from #130 in 2005

Crime Index

In the last ranking of

countries by crime index,

Georgia was named as one of

the safest place in the world

with the lowest crime rate in

the Europe

World

#1 Europe

#6

Strategic Location

Located at the crossroads of Europe, Asia, Middle East and Africa

Key link in the shortest transit route between Western Europe and Central Asia for transportation of oil and gas as well as dry cargo

Access to over 1 billion people markets

Economic Freedom 2015

#15

Doing Business 2015

#22

Hottest destinations for investments

DCFTA

FTA

FTA

GSP

Immediate Region

CIS

EU

US, Canada, Japan, Norway,

Switzerland

Very simple and service oriented customs policy 0% customs tax on over 80% of imports

Efficient tax administration 0% customs tax on all exports

No quantitative restrictions or tariff barriers 0% VAT on all exports

Average Customs Clearance ~15 minutes Maximum customs tax on imports – 5-12%

State Incentives

Regional Hub for Doing Business

Most Favored Nation (MFN) since 2000

On-going negotiations on FTA with

Corporate Profit Tax 15%

VAT (Value Added) 18%

Personal Income 20%

Property Tax ≤1%

Taxation Burden is Simple, Low, Flat and Efficient

• Foreign source income of individuals fully exempted • No restrictions on currency convertibility or repatriation of capital &

profit

• Dividend/Interest Tax 5%

• Double Taxation avoidance treaties with 47 countries

• Payroll Tax or social insurance Tax

• Capital gains Tax

• Wealth Tax NO

Unemployment Rate

Including white and blue-collar workers

Average Monthly Salary

50% of unemployed population are aged between 20-34

Young and Educated Labor

According to Heritage Foundation, Labor Freedom Index in Georgia is 91.2 out of 100 score

Labor Freedom Index

12.0 % ~ 50 % 91/100 All ILO core conventions are ratified by Georgia

Flexible Labor Code 420 USD

Available Young & Educated Work Force

Manufacturing Sector of Georgia

Industry Production Value and

Value Add Top Products Top Exports Top Companies

• Grain Mill products • Mineral waters & soft drinks • Wine

• Nuts • Spirituous beverages • Wine

• Agara Company • IDS Borjomi • Lomisi

• Ferro-alloys • Basic metals • Fabricated Metal Products

• Ferro-alloys • Ferro waste • Bars and Ores

• Georgian Manganese • Quartzite • Geosteel

• Cement • Articles of concrete and cement • Glass

• Cement • Articles of concrete/cement • Glass

• Heildelberg Georgia • Georgian Cement

• Basic Chemicals • Pharmaceuticals • Cleaning&polishing preparations

• Fertilizers • Medicaments • Cleaning & polishing prerp.

• Rustavi Azot • GMP • Aversi

• Railway locomotives • Aircraft • Ships

• Parts of aircrafts • Parts of railway • Rail locomotives

• Elmavalmshenebeli • Vagonmshenebeli • TAM Tbilaviamsheni

• Plastic Products • PET products

• Plastic Products • Caucasian PET • Alfa PET • AA Plast

• Publishing and printing • Furniture • Wood

• Wood • Furniture • Paper

• Embawood • Star RG • Hualing Group

• Apparel • Textiles • Footwear

• Apparel • Textiles • Footwear

• BTM Textile • Ajara Textile

• Wires and cables • Motors, generators, transformers • Machinery

• Machine Tools • Compression Engines • Household machines

• Saqkabeli • ICES • Saqenergoremonti

519 1,778

107 634

121 442

112 268

17 61

30 127

65 169

26 71

23 88

USD Million , 2014 Value Added Production Value

Food & Beverages

Metals

Non-metallic mineral products

Chemicals

Transport Equipment

Plastics

Wood, Paper and Furniture

Textile and Leather

Machinery and Equipment

Highly Attractive Import Substitution and Export Opportunities

Export Import Substitution

Construction Materials

Food products

Beverages

Pharmaceuticals

Packaging

Textile/Apparel

Fertilizers/ Chemicals

Wood Products

Industrial Equipment

Electronic Equipment

Plastic & Rubber

Paper and Cardboard

Other light manufacturing

“Produce in Georgia”

Financial Assistance to New Enterprises

• Interest Rate Co-financing • Partial Collateral Guarantee

Financial Assistance to Upgrade of Existing

Enterprises • Interest Rate Co-financing

Financial Assistance to Companies seeking to

Lease Equipment • Interest Rate Co-financing

Infrastructure Support for New

Enterprises

Consulting Support for all

types of beneficiaries

Support Mechanisms:

Interest Rate Co-financing on the loan or the subject of lease for the first 2 year (up to 10%)

Partial collateral guarantee for the first 2-4 years, 50% of the total loan (Upper limited USD 1,000,000 equivalent in GEL)

Infrastructure Support: Provision of State Property for a symbolic price of GEL 1

Consulting Support: Co-financing of consulting services, export market diligence, business matching, installation of technology and innovation, skills development, quality management, standardization, etc.

Eligibility

At least 80% of the loan must be oriented on the

purchase of PPE

Manufacturing must be oriented on either Industrial

Manufacturing or Agriprocessing

Investment obligations for provided state property

Co-Investment Opportunities

100% State Fund

Total Assets – USD 3 billion

Investment Options:

• PF participation should not exceed 50% of the total investment

• Equity Co-Investment

• Senior and Subordinated Loans

100% Private Fund

Total Assets – USD 6 billion

Investment Options:

• Minimum size of Investments of USD 5 million

• Equity Co-Investment from 25 to 75% of the project

• Minimum IRR of the project – 17%

Thank You