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Offshore Industry Zones might be Created in Georgia

Offshore industry zones might be created in  Georgia. The Non-Partisan Independent Majoritarians faction came up with this initiative . The initiative includes privileges for such sectors  which are not developed in Georgia at this point.
The MP Kakha Okriashvili says that except  from income tax, the companies registered in offshore zones  will be exempt from all taxes  while  income tax will be reduced for some time.

“This will cause   interest of foreign companies working in these fields. They will have a motivation to invest in our country. The state should hand over  a corresponding infrastructure to such companies free of charge. Similar industrial parks can be set up between Tbilisi and Rustavi, in Kutaisi, Anaklia, Batumi “- says Mr. Okriashvili.

How real is the creation of offshore industry zones in Georgia and what impact can this  change have on  Georgian economy?

Economic expert Ramaz Gerliani does not hail this initiative  and says that if the country’s economy  has  growth potential, it will be able to do this without  offshore  and free economic zones. According to the expert, the implementation of this initiative will not bring a great benefit to the economy due to a fact that offshore registration involves the numerous benefits that will not lead to aninflow of a large amount of money into the state budget. Gerliani focuses on the international practice.

” Today we have 5 free industrial zone in Georgia, unfortunately, none of them has justified. There are 3 thousand offshore financial centers (OFC)  in the world, of which only 5% are successful  and only 15% -20%  are effective. In Georgia, Free Industrial Zones will not bring anything for the country,  as mostly foreigners are  employees there and not locals, “- the expert notes.

Mr. Gerliani speaks about dangers that this initiative carries. In his words,  the sectors that will be registered in an offshore zonewill be  in better conditions and will soon leave  the fields, which today are considered to be more or less developed.

Expert Levan Kalandadze  refrains from unambiguous assessment and says that the idea is interesting and the discussion should take place. Kalandadze  talks about the necessity of conducting research and says that at the first stage Georgia’s potential, as the country with a simplified tax system, must be assessed.

As for sectors, Kalandadze  considers  several fields, including high-tech manufacturing and energy. The expert believes thatthese areas are the most demanded in Europe.

Non-Partisan Independent Majoritarians’ initiative will have to pass several procedures before making into a law. If the draft lawwill succeed to pass these procedures, it will be delivered at the plenary session and after three reviews Parliament will vote.