Free Industrial Zone (FIZ)
A FIZ may be established on a piece of land exceeding 10 hectares. It may be established by the initiative of the Georgian Government or upon the request of an organiser, resident or non-resident physical or legal person for land that they own or lease.
Transactions in a FIZ may be conducted in any currency. Payment between an Industrial Free Zone enterprise and a regular Georgian enterprise may also be conducted in any currency. The regulations do not permit a building or structure inside a FIZ to be used as a residence.
Production or manufacturing of any kind of goods and services are permitted in a FIZ, with the exception of, nuclear, radioactive substances, arms and munitions, narcotic and psychotropic goods, and excisable goods. One of the purposes of establishing the zones is to promote local employment.
Entities operating in a FIZ are not required to withhold tax from payments to employees. However, the employees are required to account for their own taxes through self-reporting on a monthly basis.
Incentives have been established for entities organised as an International Financial Company, a Special Trading Company or a Free Industrial Zone Company.
A Free Industrial Zone Company is a registered entity located inside a FIZ that has confirmed its status with the tax authorities. Income received by a Free Industrial Zone Company from its permitted activities conducted in a Free Industrial Zone is exempt from income profit tax. It should pay tax 4% on the market price of the goods supplied to a person registered under the Georgian law (excluding on the supplies to other FIZ Company).
A Special Trading Company is a company that has confirmed its status with the tax authorities. A Special Trading Company may sell and re-export foreign goods. A Special Trading Company is exempt from profit tax on income received from selling and re-exporting foreign goods.
An International Financial Company is a financial institution that conducts most of its business with parties outside Georgia and is located outside a FIZ. Profit received from financial services provided by an International Financial Company is exempt from profit tax, as gains from the sale of securities issued by an International Financial Company.