Four Free Industrial Zones in three Georgian cities
Georgia’s Free Industrial Zones are specific physical areas with their own administration, premises and customs arrangements. The Revenue Service identifies four: Poti, Kutaisi, Kutaisi Hualing and Tbilisi Technological Park, commonly presented as Tbilisi Free Zone. The two Kutaisi zones are separate operations. [1]
| Zone | Location | Business setting |
|---|---|---|
| Tbilisi Free Zone | Tbilisi | A capital-city location for zone operations alongside access to Tbilisi’s business community. |
| Kutaisi Free Industrial Zone | Kutaisi | Industrial facilities on the former automobile-factory site, with railway access and an on-site customs office. |
| Hualing Free Industrial Zone | Kutaisi | Industrial and warehouse buildings, land and utility access marketed for manufacturing, processing, storage and trade. |
| Poti Free Industrial Zone | Poti | Manufacturing, storage, logistics and trading operations connected with Black Sea cargo movements. |
A comparison begins with the goods and their movement. A manufacturer importing inputs and exporting its output has a different pattern of purchases from a wholesaler supplying Georgian shops. The choice of zone also affects access to staff, customers, the port, inland transport and the particular building used for the work. [4][6][8]
Manufacturing, processing and trading businesses in the zones
Hualing’s published business examples include Georgia Shunxiang Wood Processing Company, Ekomax Stone & Wood, Iberika Spirits and automotive-trading business Europe Composit Georgia. Their testimonials describe wood processing, spirits production and cargo-handling or customs services. These are concrete uses of the zone, with different equipment and premises requirements. [5]
A wood-processing operation needs machinery, power, storage and a way to move bulky output. A spirits producer has production equipment, ingredients, packaging and product requirements. An automotive trader needs vehicle handling and logistics. Each activity brings a different licence description and commercial relationship with the zone administration.
Our manufacturing, food-processing, automotive and logistics articles describe the wider Georgian markets surrounding these operations. A zone company can participate in that business community while its own goods and transactions follow the FIZ rules.
Tax and customs treatment of zone operations
The Law on Free Industrial Zones places taxation under Georgia’s Tax Code and Customs Code. It provides exemptions for qualifying FIZ profit, property situated in the zone, foreign goods brought into the zone and transactions carried out there. These provisions apply to the recognised enterprise and its permitted operations. [2]
| Transaction or asset | Treatment to understand |
|---|---|
| Foreign goods brought into a FIZ | The zone law provides exemption from import tax and import VAT. Customs control and goods records still apply. |
| Goods manufactured in the FIZ and released into mainland Georgia | The zone law provides import-tax exemption; VAT is addressed on release for free circulation. The separate Article 25 goods charge may also be relevant. |
| Property situated within the FIZ | The zone law provides property-tax exemption. |
| Employment income | Zone status does not remove employees’ income-tax obligations. The zone law addresses payment through income declaration. |
A zone licence, a company registration and a customs procedure perform different jobs. The licence concerns the admitted commercial activity; registration identifies the legal entity; customs documentation records what happens to the goods. The company’s contracts and accounting need to describe the same business.
Services supplied to customers outside Georgia also need attention to Article 25 and the applicable permitted-activity rules. IT Virtual Zone status and International Company status are separate arrangements from a physical Free Industrial Zone. The software guide and investor reference explain those distinctions.
The 4% charge on goods traded with mainland Georgian businesses
Article 25 of the Tax Code addresses goods traded between a FIZ enterprise and a Georgian-registered person outside the FIZ regime. For a covered sale by the FIZ enterprise, the charge is 4% of the revenue received or receivable. For a covered purchase from such a Georgian supplier, it is 4% of the goods’ market value. The FIZ enterprise pays the charge by the fifteenth day of the following month. [3]
For example, a covered GEL 100,000 goods sale gives a GEL 4,000 charge. This calculation concerns the Article 25 charge alone. VAT, customs valuation and the treatment of the particular goods are separate parts of the transaction.
Electricity, water and natural gas intended for local consumption or production are expressly excluded from the Article 25(3) charge on goods supplied to the FIZ enterprise. That distinction matters to a manufacturer comparing imported raw materials, locally purchased materials and ongoing utility expenditure. Our energy-cost guide supplies current electricity rates and connection-cost information.
Local services, rent and commercial contracts
Article 25 also restricts services supplied by a FIZ enterprise to Georgian-registered persons outside the FIZ regime. The purchase of local services has specified exceptions, including the zone administration’s security and property leasing, transport, communications, sewerage, audit and consultancy, licensed financial services and fixed-asset installation or construction. Government-defined services can add further exceptions. [3]
This is why a manufacturing company’s lease, freight agreement, banking arrangements and professional-service contracts should identify the work being supplied. Calling every payment a “service fee” leaves its legal and accounting treatment unclear. The actual activity, provider and contractual obligation give the payment its meaning.
Lawyers.ge assists with corporate documents, commercial agreements, employment matters, property transactions and representation in business disputes. A proposed distribution contract, zone lease or shareholder arrangement can be reviewed alongside the planned company structure.
Industrial buildings, land and utility connections
Kutaisi Free Zone’s current facilities overview describes approximately 270,000 m² of territory and 128,000 m² of industrial facilities, with railway access and an on-site customs office. These are the operator’s published site figures, rather than a statement that all of that space is currently vacant. [11]
Hualing markets ready-to-use industrial and warehouse facilities in different sizes and configurations, including selected buildings with office space or cargo-loading access. Its facilities page also identifies industrial land and access to electricity, gas, water and sewage infrastructure. [4]
Poti FIZ publishes a different part of the occupation cost: its utility company prices electricity and gas connections by project, capacity, distance and technical specifications. Electricity consumption is then metered through the supplier account under its published arrangements. [7]
A premises comparison therefore includes the building, usable yard and loading areas, fit-out, available electricity capacity, connection works and the recurring utility bill. For a food factory, refrigeration and cleaning can materially change the building requirement. For a metal workshop, the power installation and handling equipment can dominate the initial expenditure. The warehouse market guide and energy-cost guide bring those local cost questions together.
Export origin and access to overseas customers
Georgia’s trade agreements can reduce tariffs for goods meeting the relevant origin rules. A product’s ingredients or components, the processing performed in Georgia and the agreement’s product-specific rule determine whether preferential origin is available. The European Commission’s DCFTA guidance explains the EU relationship. [9]
For example, an imported machine stored in a Georgian zone remains an imported machine. A manufacturer transforming imported materials into a finished product has a different origin question. Its production records and bill of materials become part of the commercial evidence behind the export.
The Middle Corridor guide explains the ports, railways and inland terminals serving regional trade. Logistics access and preferential origin both affect an exporter’s costs, but one concerns moving the consignment and the other concerns the legal origin of its goods.
Company formation, licences and continuing support
Our FreeTradeZone.ge service assists with Free Industrial Zone company formation in Tbilisi, Kutaisi and Poti. The work can include the application, company documents, licence arrangements, enquiries about premises, banking preparation, accounting and continuing administration. Remote formation involves the required Power of Attorney and certified documents. [10]
The first-year proposal should identify incorporation work, the zone licence, the address or premises agreement, translations, banking assistance and recurring administration. Subsequent years bring their own licence, premises and accounting costs. Professional fees and the relevant zone charges are quoted for the proposed activity.
Visit FreeTradeZone.ge for Free Industrial Zone company setup, or Lawyers.ge for legal advice and business representation in Georgia. MarketEntry.ge can assist with Georgian company research, suppliers, customers and commercial introductions for the operation.