A FIZ is an operating and customs model—not a mailbox tax regime
Enterprise Georgia reports four operating Free Industrial Zones in Poti, Kutaisi and Tbilisi. A FIZ enterprise must be registered in a recognised zone and operate within the statutory and zone rules. The strongest fit is usually a real export, production, processing, assembly or logistics activity with controlled goods flows.
Where the zones fit
| Location | Potential operating logic | Questions to verify with the operator |
|---|---|---|
| Poti | Black Sea port proximity, import/export logistics, warehousing and port-linked production. | Actual port/rail access, terminal route, utilities, plot/warehouse availability and congestion risk. |
| Kutaisi zones | Manufacturing and assembly serving western/central Georgia, road corridors and Kutaisi airport access. | Power capacity, labour catchment, airport cargo reality, road time and operator services. |
| Tbilisi | Management access, airport and eastern-market connectivity for qualifying zone activity. | Physical industrial space, customs flow, labour and cost compared with an ordinary Tbilisi location. |
Statutory tax mechanics
| Area | Current statutory direction | Practical caution |
|---|---|---|
| Profit tax | Profits from business permitted within a FIZ are exempt under the Tax Code. | Confirm every revenue stream is permitted and attributable to the FIZ activity. |
| Domestic goods flow — FIZ to Georgia | The FIZ enterprise pays 4% of revenue received/receivable when supplying goods to a Georgian-registered person outside the FIZ. | Model the charge, import VAT/duty, margin and customer price together. |
| Domestic goods flow — Georgia to FIZ | The FIZ enterprise pays 4% of market price for goods supplied by a Georgian-registered person, subject to stated utility exceptions. | Market value and supplier classification need evidence. |
| VAT inside the zone | Supplies of goods and services between FIZ enterprises are exempt from VAT without the right of deduction under the Tax Code. | Input-VAT economics and mixed transactions still require review. |
| Property | Property within a FIZ is exempt under the Tax Code. | Operator rent, service charges, utilities and contractual fees are not taxes but affect total cost. |
| Dividends and interest | Specified dividends and interest earned from a FIZ enterprise are exempt from Georgian tax at source. | Recipient-country taxation, treaty, beneficial ownership and financing rules still apply. |
| Employees | The Tax Code provides a special procedure for salary paid by a FIZ enterprise; Georgian resident employees account for income tax under the applicable rules. | Payroll design needs local advice; do not market the zone as “no employee tax.” |
Service restrictions can disqualify the model
A FIZ enterprise may not deliver services to a Georgian-registered person outside the FIZ. It may buy services from Georgian-registered persons only in listed categories—such as specified zone administration/property, transport, communications, sewage, audit, consulting, qualifying financial services and fixed-asset installation/construction—plus any services added by government rule.
A software, consulting, shared-service or mixed domestic/export business therefore needs a transaction-by-transaction opinion. An ordinary Georgian entity may be required for domestic activity, with transfer pricing and real separation between entities.
Goods, customs and origin
Bringing Georgian goods into a FIZ is treated as export. Taking goods from a FIZ abroad is export. Bringing goods from a FIZ into the rest of Georgia follows the applicable import treatment. Goods produced in a FIZ may obtain a Georgian certificate of origin from the Revenue Service, but preferential origin under a trade agreement depends on that agreement’s rules and actual processing.
- Map every inbound and outbound movement and customs procedure.
- Confirm who is importer/exporter of record and who owns inventory at each point.
- Classify goods and quantify import VAT, duty, excise and the FIZ 4% charge.
- Test whether processing is sufficient for the intended origin claim.
- Design stock records, loss/scrap controls and customs reconciliation.
Permitted and prohibited activities
The FIZ law generally permits production, processing and services except prohibited activities and any restrictions set before the zone was established. Prohibited operations include arms/ammunition, nuclear or radioactive substances, narcotic/psychotropic substances and tobacco products/raw materials, subject to the statutory local-consumption exception for tobacco goods.
Sector licences, product safety, environmental, construction, labour and sanctions controls can still apply. Obtain written confirmation for the exact activity and product.
Commercial due diligence on a zone
| Workstream | Evidence to request |
|---|---|
| Legal status | Government act establishing the zone, operator authority, enterprise licence and permitted activity. |
| Site | Plot/warehouse plan, title or lease chain, handover condition, building rights and expansion options. |
| Utilities | Contracted power, redundancy, tariff, water, gas, telecom, waste and outage history. |
| Logistics | Gate hours, customs presence, port/rail/road route, handling equipment, storage and demurrage exposure. |
| Costs | Licence, rent, service, customs, security, utilities, fit-out, guarantee and exit charges. |
| People | Labour availability, transport, shifts, permits, training and health-and-safety responsibilities. |
| Exit and failure | Termination, cure periods, asset removal, sublease/assignment, insolvency and operator-change protections. |
FIZ versus ordinary Georgian company
| Decision factor | FIZ enterprise | Ordinary Georgian company |
|---|---|---|
| Primary market | Best aligned with export/zone transactions. | Suitable for Georgian domestic sales and services. |
| Location | Must operate within a recognised zone under operator rules. | May operate at any compliant site. |
| Tax/customs | Targeted exemptions plus 4% domestic-goods and special customs mechanics. | General distributed-profit, VAT, customs and property rules. |
| Services with Georgian customers | Restricted by Tax Code. | Generally possible subject to ordinary tax and licensing. |
| Cost base | Zone licence, rent and service charges; possible logistics/utility benefits. | Market rent/land and ordinary service providers; no zone licence. |
| Best test | Does the export margin after all zone and logistics costs improve? | Does domestic-market flexibility outweigh the special-regime benefit? |
Seven-step feasibility process
- Define product, processing, customers, suppliers and annual goods flows.
- Shortlist zones by logistics, utilities, labour and real-estate requirement.
- Obtain operator term sheets and written activity confirmation.
- Model ordinary-company versus FIZ landed cost and cash flow.
- Get tax, customs, origin, licensing and transfer-pricing opinions.
- Visit the site and test port/road/airport routes and workforce access.
- Negotiate licence/lease protections, then implement customs, accounting and compliance controls.
Frequently asked questions
Frequently asked questions
How many Free Industrial Zones operate in Georgia?
Enterprise Georgia currently reports four operating zones located in Poti, Kutaisi and Tbilisi. Confirm the current operator, site availability and licence terms directly before investment.
Is every FIZ company tax-free?
No. Benefits apply within statutory conditions. Domestic goods transactions can trigger a 4% payment, services with Georgian persons are restricted, employees have income-tax obligations, and customs and zone fees still matter.
Can a FIZ enterprise sell services to Georgian customers?
The Tax Code prohibits a FIZ enterprise from delivering services to a Georgian-registered person outside the FIZ. Obtain advice for mixed models and separate entities.
Does production in a FIZ automatically create EU preferential origin?
No. A Georgian origin certificate and preferential origin under a trade agreement are distinct questions. The product-specific rule and processing evidence must be met.
Which location is best?
Poti may favour port-linked flows; Kutaisi may suit manufacturing and western/central access; Tbilisi may favour management and eastern connectivity. The correct choice follows the supply chain, utilities, labour and full cost.