Nestled in the heart of the Caucasus region, just a mere three-hour flight from the United Arab Emirates lies the alluring and opulent land of Georgia: An amalgamation of plains, mountains, and sea. The country has carved out a reputation as a gracious host to international visitors. However, Georgia is more than just a destination for leisure seekers. Recently, it has emerged as a beacon of economic growth and development, outpacing the regional average GDP growth rate. With a rich cultural heritage and a strategic location at the crossroads of Europe and Asia, this former Soviet republic has captured the attention of investors and analysts alike. Since gaining independence in 1991, Georgia has undergone a remarkable transformation, transitioning from a centralized, planned economy to a dynamic, market-oriented one. The country has made significant strides, bolstered by a pro-business government and a commitment to reform. 

Today, Georgia boasts a diverse and thriving economy driven by industries such as transportation and storage, energy, construction and real estate, manufacturing, and telecommunications. Georgia's Deputy Prime Minister and Minister of Economy and Sustainable Development, Levan Davitashvili, cites these sectors as key drivers of the country's economic growth, highlighting their contributions to its overall economic stability. 

With the ongoing war between Russia and Ukraine changing trade routes, the middle corridor has become a vital trade flow route between Asia and Europe. Georgia is well-positioned to take advantage of this trend.

According to Levan Davitashvili, the country has shown exceptional resilience in the face of the recent external economic shocks. Despite these challenges, "Georgia has achieved double-digit economic growth for the second consecutive year. Additionally, the country reached a record-high export of over $5.6 billion in 2022. FDI inflows also attained new heights last year. We had $2 billion in foreign direct investments, amongst which 48% came from Europe". The current government of Georgia is committed to preserving these positive trends and ensuring macroeconomic stability. The minister emphasizes, "We need to keep these macroeconomic figures stable, so we reduced the budget deficit and had fiscal consolidation bring it down to below 3% of GDP. The public debt to GDP ratio was lowered to under 40%. The country's successful track record in achieving the targets the International Monetary Fund programs set has instilled stronger confidence from foreign investors."

Georgia and the UAE signed a comprehensive economic partnership agreement (CEPA) in Tbilisi on the 17th of March, 2023, paving the way for a strengthened economic relationship to boost investment, trade, and tourism between both countries. This agreement is a significant milestone in the solid diplomatic ties the UAE and Georgia share. The minister of state for foreign trade of the UAE - Dr Al Zeyoudi - reports that "The UAE-Georgia CEPA holds vast potential. In 2022, bilateral non-oil trade reached $468m, an upswing of 110% in 2021 and fully 63% of Georgia's trade with the Arab world." 

Investors and business leaders from the UAE are showing a keen interest in the most attractive sectors for investment in Georgia, including real estate, energy, agriculture and logistics, for example. Now is the time for them to consider new opportunities this dynamic and rapidly developing country offers. Georgia's tourism industry is also a significant draw for investors from the UAE. 

As Georgia continues to build on its economic successes and navigate the challenges ahead, it is clear that this small but mighty country has much to offer the world, particularly the UAE.

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Unlocking the potential of Georgia: a strategic gateway to Eurasia with a favorable business climate

The stable and business-friendly climate driving economic growth in Georgia

Amidst a shifting global investment landscape, Georgia shines as a promising destination for Emirati business leaders seeking untapped potential in a stable and business-friendly environment. Georgia has witnessed a remarkable 61% increase in foreign direct investment in 2022, with the United Kingdom, Spain, and the United States ranking as the top investor countries in 2022. Notably, Aqualia, Spain's third-largest private water company, invested $180 million in Georgia's water utilities in 2022, drawn by the country's robust regulatory framework.

Mikheil Khidureli, CEO of Enterprise Georgia, describes Georgia as a "shining star of the region," with a noteworthy economic growth rate of 10.1% in 2022, following a 10.4% gain in the previous year. Furthermore, the World Bank predicts Georgia's economy to grow by 4% in 2023 and 5% in 2024, positioning the country as the top-performing economy in Eurasia. With its strategic location, business-friendly policies, and many investment opportunities, Georgia has firmly established itself as a highly attractive investment destination.

Georgia has undertaken significant measures to improve its business landscape, earning it the seventh place on the World Bank's Ease of Doing Business ranking. The country has simplified its tax system, which is now among the three least burdensome worldwide, and reduced bureaucracy. Starting a business in Georgia is now a seamless and transparent process that can be completed within an hour.

Adding to its appeal, Georgia's business climate index has reached an "all-time high," according to the Business Association of Georgia (BAG) Index, with 65% of surveyed businesses reporting an increase in their total investments in 2022. Dr Samson Pkhadadze, the BAG Chairman, foresees an even brighter outlook for 2023, particularly in strategic sectors such as real estate, retail, energy, logistics, and transport, which have garnered significant interest.

Situated at the crossroads of Europe and Asia, Georgia enjoys a prime location that positions it as a natural gateway for trade and commerce between the two continents. The country's modern infrastructure, including highways, railways, ports, and airports, has been developed to facilitate the smooth and efficient transport of goods to and from Georgia.

Furthermore, Georgia's free-trade agreements with China, Ukraine, Turkey, the Commonwealth of Independent States (CIS), the European Free Trade Association (EFTA) countries, and the Deep and Comprehensive Free Trade Areas (DCFTA) with the European Union (EU) offer customs duty-free access to a 2.3 billion cumulated market, providing companies with unparalleled access to a vast range of new customers.

To further encourage investment and trade, Georgia's three Free Industrial Zones - Poti FIZ, Tbilisi FIZ, and Hualing FIZ, provide tax benefits and strategic locations for foreign companies interested in establishing a presence in the country. With all these factors combined, Georgia has become a desirable destination for companies seeking to capitalize on the region's economic opportunities.

In addition to these factors, Georgia offers a range of investment opportunities that have piqued the interest of investors. Real estate, in particular, has been an area of focus for UAE investors due to the steady growth of Georgia's property market in recent years. The government has implemented many measures to foster the sector's expansion, such as developer tax incentives and a streamlined construction permit process. Furthermore, Georgia's burgeoning tourism industry has created prospects for UAE investors to invest in hospitality, resorts, and other tourism-related businesses.

Apart from real estate, Georgia's energy sector has also caught the attention of investors. The country boasts considerable hydroelectric power potential, and its government has been actively promoting renewable energy projects. To encourage companies to invest in such projects, the government has introduced a range of incentives, including tax breaks and guaranteed purchase agreements for the energy generated by these projects.

Mikheil Khidureli highlights the thriving business process outsourcing industry as one of Georgia's fastest-growing sectors. The country's IT and communications sector experienced a 102% increase in gross value from 2016 to 2021. Notably, Majorel, a company with a current workforce of over 3,500 employees, has expanded its operations exponentially in just six years from a modest 100 employees.

A young, dynamic, and skilled workforce awaits in Georgia, boasting proficiency in multiple languages, particularly in the IT, engineering, and finance fields. Moreover, the average monthly salary for these talented individuals amounts to $635.

Mikheil Khidureli concludes that "the best time to invest in Georgia is before its EU candidacy at the end of 2023. Very high yields are available in the real estate, energy and logistics sector for UAE investors".

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