Beautiful Georgia beckons foreign investors with some of the world’s most relaxed requirements when it comes to purchasing land/property or starting a business.
COUNTRY PROFILE
Georgia is a developing country that has made notable improvements to its business climate, demonstrated by impressive rankings in a number of international indices. According to the World Bank’s Ease of Doing Business index, Georgia is ranked sixth-best in the world with regard to starting a business and third-best with regard to registration of property.
Georgia has signed Bilateral Investment Treaties with 32 countries and signed a Deep and Comprehensive Free Trade Agreement with the European Union on 27 June 2014. The country also has free trade agreements with Turkey and a number of CIS countries and is a member of World Trade Organization. Citizens of 94 countries enjoy visa-free travel to Georgia and holders of valid multi-entry visas or residence permits from different 50 countries are able to stay in Georgia for up to 90 days during any one-year period.
REGISTRATION OF LAND BY FOREIGNERS
Georgia’s legal framework has made it easy and simple for entrepreneurs and investors to register and transfer property. Any foreigner is entitled to purchase agricultural and/or non-agricultural land without restriction. Government initiatives and decisions of the Georgian Constitutional Court have lifted any limitations with regard to the acquisition of land by non-citizens.[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5,6,7,8″ ihc_mb_template=”1″ ]
However, foreigners are not entitled to purchase agricultural land owned by the state of Georgia. Additionally, legal entities registered outside the country are prohibited from purchasing agricultural land on its territory. The above minor restrictions do not in practice impact foreigners’ ability to purchase land, as they can freely register a company in Georgia and purchase agricultural land through that company.
LAND REGISTRATION PROCEDURES
The Georgian National Agency of Public Registry (the “Public Registry”) is entitled to register companies and properties in Georgia. The Civil Code of Georgia (“CCG”) does not require the content of any land purchase agreement to be notarized. Only the signatures and authorities of the signatories must be approved by a notary, or such signature can be made in the presence of a representative of the Public Registry.
The parties need only submit land purchase agreement and identity documents to the Public Registry in order to register the transfer of ownership. Operations undertaken by the Public Registry for the registration of land purchases are digitized and publicly available online.
Typically, transfer of ownership is registered and an updated extract of the property is issued within four business days. However, the Public Registry additionally offers accelerated procedures with the possibility to register property on the same day of submission of the documents, or in one business day.
All information regarding immovable property located in Georgia is publicly available on the website of the Public Registry.
PURCHASE OF STATE PROPERTY
According to the laws of Georgia, acquisition of heretofore of state or municipal property by individuals and legal entities is referred to as privatization. The LEPL National Agency of State Property (“NASP”) is responsible for the management, privatization and transfer of state property.
Immovable property owned by the state of Georgia may be sold through auction or direct sale. The state entity managing the property is authorized to declare a public auction of the specific property. A direct sale shall be carried out with or without a competitive selection process and with or without a fee, based on the decision of the Government of Georgia (the “GoG”).
Immovable property might be privatized conditionally, upon performance of certain investment obligations. In cases when such obligations are attached to the immovable property, the buyer is responsible for submitting an unconditional and irrevocable bank guarantee in the amount of 10% of the investment obligations (the “Investment Guarantee”).
In the case of a direct sale, the Investment Guarantee shall be submitted before issuance of a respective governmental decree and, in the case of an auction, one month from the date of the auction. The duration of the Investment Guarantee shall exceed the time frame of the investment obligations by at least four months. In the event the buyer breaches its investment obligations, the property will be returned back to the state without any compensation.
GOVERNMENT INCENTIVES
On 20 September 2016, the GoG introduced a new initiative entitled “50 Properties for your Hotel” (the “Project”) which is aimed at encouraging private investment in Georgia’s tourism sector. Under the Project, the GoG has identified 50 state properties where investors can build hotels and create recreational and panoramic view areas (the “Listed Properties”). The Listed Properties will be allocated through periodic online auctions.
Additionally, Georgia has established two tourism zones (the “Tourism Zones”) in the seaside destinations of Anaklia and Kobuleti. The Tourism Zones offer land at a symbolic price of one Georgian Lari to investors who undertake obligations to build average and/or high class hotels on the territory and invest more than one million Georgian Laris[/ihc-hide-content]