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Construction and development

The construction sector is one of the largest sectors of the Georgian economy. The magnitude of the construction is increasing in the country, especially in Tbilisi. It is noticeable, that the Georgian construction market is becoming more and more attractive to foreign investors.
In 2014-2017 the construction sector was the fastest growing sector of the Georgian economy. It was increasing private constructions, as well as the construction works carried out within the state infrastructure projects, by attracting direct foreign investment, the construction is in the rate only behind the sectors of transport and finance.

In 2017, $ 295 million of direct foreign investment was invested in construction. 71,600 people are employed in the construction sector, which is 9.6% of the total employment. The average nominal salary in the sector is 1 461 GEL and this index in the rate is only behind the financial sector. The rapid growth of the sector leads to rapid growth of salaries. The average salary in the sector after 2010 is doubled.

Together with the development of the construction sector of Georgia, it is important to increase the quality of the construction. Three types of construction are allocated on the Georgian market - construction of residential, office and commercial premises.

The municipal authorities determine the construction permit cost, but the maximum limit of taxes is regulated by law: in all regions of Georgia - maximum 1 GEL for per 1 m2 of construction area; In case of construction of industrial object - maximum 5 GEL for per 1 m2 of construction area. Building permits issue is one of the components of the Doing Business index for the “World Bank”. Index, on the one hand, focuses on the procedures for issuing construction permits, time and cost, on the other hand, on the quality control of construction. According to these criteria, Georgia is ranked 27th in the world by 2018 year.

The World Bank has chosen a warehouse building as an observation object in every country. The 27th place is due to the need for permit to build a construction:

  • 11 procedures (the best indicator is in Denmark - 7 procedures);
  • 63 days (South Korea has the best rate - 28 days);
  • 0.3% of construction cost (best rate is in Slovakia, Mongolia and Thailand - 0.1%);
  • 7 points from 15 in the building quality control index (United Arab Emirates, New Zealand and Luxemburg have maximum 15 points).
  • The construction business is quite unevenly distributed among the regions of Georgia. With all the criteria, Tbilisi holds more than 60% of the construction market, Tbilisi and Adjara together holds 75-85%.