“Poti is ideal as a base to serve promising region”
Georgia aspires to become an attractive base for Cyprus-based companies willing to take advantage of its Free Industrial Zone at the port of Poti as a gateway to expand into the promising Caucasus region.
Georgia’s Ambassador in Nicosia, Vladimer Konstantinidi, told the Financial Mirror in an exclusive interview that Cyprus based companies should take full advantage of Georgia’s strategic location between Europe and Asia to expand into the region.
Moreover, the Ambassador said the business environment is set to improve further when a raft of government incentives are passed and implemented.
GATEWAY TO GEORGIA
Rakia Georgia Free Industrial Zone LLC Company was established in June 2008 by RAK Investment Authority, a subsidiary of the UAE government-owned Ras Al Khaimah nodal agency.
The Poti FIZ spreads over a territory of 300 hectares and is situated on the historic Silk Road between the East and West. With the investment of more than $400 mln, including the investment in the Poti sea port, Rakia Georgia FIZ LLC will offer investors world class infrastructure, a modern warehousing complex, container storage areas, business centres, etc.
Some of the major benefits available in the Poti Free Industrial Zone include: competitive rates of lease of land, warehouse and container storage areas; 100% ownership of companies operating in PFIZ; no foreign exchange controls; 100% capital and profit repatriation; zero tax on profits in the free zone for foreign companies; 100% duty free import and export of raw materials and finished goods; right to source raw material from anywhere in the world; availability of power and water with a one-stop service; power supply at competitive rates (due to hydro-electric power generation); strategic location in the middle of the ancient Silk Road; and, being adjacent to the largest port of the Black Sea – Poti Sea Port.
Poti FIZ is inviting manufacturing, trade, services, consulting and logistics companies in mainly all business sectors and industries to start up their operation in a tax-free environment with an opportunity to build long term, cost effective, self sustaining and profitable business enterprises that will serve customers from various parts of the world.
Ambassador Konstantinidi is hopeful that the development of free industrial zones offering tax and customs breaks to investors, a new fiscal austerity bill and the easing of the world financial crisis will unfreeze stalled projects and attract fresh capital.
A set of measures, which Georgia’s President Mikheil Saakashvili presented to parliament in October and still needs to be passed, would give investors a guarantee that current liberal economic policies won't change. The measures lay out constitutional amendments to limit state spending to a ceiling of 30% of GDP, the budget deficit to no more than 3% and foreign debt to no more than 60%.
INVESTMENT OPPORTUNITIES
In 2008, the UAE was the biggest foreign investor in Georgia, accounting for $306 mln out of a total $1.56 bln.
Ambassador Konstantinidi wants to see the share of Cyprus-based companies increase. A possible agreement on avoidance of double tax would go a long way to promote business relations between Cyprus and Georgia, the ambassador said.
In addition to setting up an industrial base, Cyprus based companies and entrepreneurs may also consider investing in tourism related projects, including purchase and management of hotels, either in the capital Tbilisi or any of the Black Sea golf and leisure resorts.
"Georgia has a unique location as a bridge between Europe and Asia and the government is loyal to investors," he said.
Georgia's government, while admitting that the economy could shrink by as much as 4% in 2009, is still confidently predicting a return to growth of 2% in 2010, and hopes foreign investors will continue to be major contributors.
