PM Garibashvili pledges favorable business climate for US investors

PM Garibashvili has pledged a favorable business climate for US investors, and Georgia was looking forward to attracting new technologies and expertise from the US, and even though there are already a number of successful cases of US businesses in Georgia, "we would like to see more", Prime Minister Irakli Garibashvili said on Wednesday, February 26. 

Garibashvili elaborated on the experiences of several US companies which had already launched "successful” businesses in Georgia.

"[We] want to develop trade in services with the US. There are already several Georgian companies providing business support services to US companies, like marketing, accounting, IT, etcetera,” he said.

"At the same time we would like to help Georgian companies in exploring the US market and US companies in exploring the business and investment opportunities in Georgia,” Garibashvili stated in his speech at the America-Georgia Business Council meeting in Washington today.

"We already have good cases where US multinational companies have chosen Georgia as a gateway to the region and we would like to promote this concept among the US business community farther.”

More than 30 American businessmen who attended the America-Georgia Business Council meeting positively assessed Georgia’s investment opportunities.

"It was an excellent meeting. Prime Minister Garibashvili was very forthcoming in a range of projects. The remarks of the Prime Minister made me want to think about further investing in Georgia,” said Rick Dortch of MGT Group, which operates two Marriot Hotels and the Funicular restaurant at the top of Mtatsminda Mountain in Tbilisi.

The working dinner with the America-Georgia Business Council members in Washington on February 26, 2014. Photo by PM's Press Office.

Garibashvili highlighted the US’s role for being a strong supporter of Georgia and one of the country’s foremost partners since it regained its independence in 1991. 

While speaking about the various reforms implemented in Georgia to establish a more favorable political environment in the country, Garibashvili emphasized could offer many benefits to foreign investors.

"Georgia offers one of the best public services in the region, lowest corruption and crime and lowest and easiest tax system. Georgia is the fourth country with the least tax burdens after Qatar, UAE and Hong Kong by Forbes Tax Misery & Reform Index, and has fast developing infrastructure. Georgia ranks number eight in the World Bank rating for Ease of Doing Business,” he said.

Graibshvili promised investors the Government would ensure and guarantee open and fair competition within the market, proper protection of property and intellectual rights, freedom of access to the free judicial system, and effective financial systems.

He also promised a stable, predictable and transparent legislative environment with macroeconomic stability.

Georgia - the hub for trade  

Georgia’s Prime Minister revealed his "ambitions” for Georgia to become the hub for trade and doing business in the region and be a regional base for multinational enterprises.

"Georgia is uniquely positioned to capitalize on increasing trade flows between Europe, the Caspian region and Central Asia and China in the foreseeable future. We are the shortest route between the Black Sea and the Caspian Sea region,” he said.

Addressing the participants of the America-Georgia Business Council, Garibashvili updated the guests about the Railway Connecting Line between Georgia and Turkey.

An informal meeting with the American businessmen in Washington on February 26, 2014. Photo by PM's Press Office.

The project is in the final stage of development and when completed, will further advance trade of goods across the whole region.

DCFTA with the US and the EU

Garibashvili believed the Deep and Comprehensive Free Trade Area Agreement (DCFTA) with the EU would open many doors for Georgia and for Georgians or foreigners living and doing business in the country.

"[The] Association Agreement, a part of which is the DCFTA, sets an agenda for our Europisation. It provides an opportunity to gradually achieve integration in the EU internal market. Products or services produced in Georgia will have the chance of free access to the 500 million developed market. We expect that it will boost foreign direct investment inflow in Georgia, especially in the export-oriented manufacturing sector,” he said.

He believed successful conclusions of negotiations surrounding the DCFTA would serve as a good example of the readiness of Georgia to advance in trade talks with the US.

The private and sovereign funds – opportunity for investing

American investors learnt about the current investment climate in Georgia when the Prime Minister spoke about the country’s two largest investment funds - one private and one sovereign. Both act as a co-investment partner for the large scale commercial projects.

The private fund, the Georgian Co-Investment Fund, was established in September 2013 by a group of Georgian and international investors with a committed capital of $6 billion USD. "The fund has the intention to co-invest in priority sectors of the Georgian economy like hydro power generation, transport and logistics, tourism and agriculture,” Garibashvili said.

He also highlighted the functions of the state owned Partnership Fund (PF).

"The PF participates in new investment projects in order to decrease country risks for foreign investors and it acts as a "sleeping partner” with a predetermined, clear exit strategy,” he added.

Investors can buyout PF shares as soon as the investor was ready. Selling the shares can be predetermined or the PF will sell its shares on the market.

"The PF can finance a maximum of 49 percent equity, because they don’t want to be majority equity holders since they are not going to participate in the management of [the] business,” Garibashvili said.

At the end of the session, delegates attended the informal Council event where participants swapped business cards and exchanged ideas with the hope of attending a follow-up meeting for future business agreements.