Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
Transit and logistics are a priority sector as Georgia seeks to benefit from increased East/West trade through the country. Goods enter through Poti and Batumi Sea Ports, several airports, or railroad and highways connecting Georgia to neighboring Turkey, Russia, Azerbaijan, and Armenia. Transport communication and related infrastructure is being upgraded, increasing the country’s potential to serve as a regional hub. Due to Russia’s 2022 war of aggression in Ukraine and resultant international sanctions on Russia, the “Middle Corridor” that bypasses Russia and connects Central Asia to Europe through Georgia is becoming a preferred route for many traders, creating opportunities for Georgia’s transport and logistics sector.
Using an Agent or Distributor
Several business associations operating in Georgia can serve as a resource for obtaining information about local companies, distributors, wholesalers, and retail outlets. The American Chamber of Commerce (AmCham), Georgian Business Association (BAG), International Chamber of Commerce (ICC), and Georgian Chamber of Commerce are available to assist interested investors. Information is also available via the Georgian Yellow Pages.
Several distribution companies have established networks for food, cosmetics, consumer goods, cars, etc. Some importers may still choose to handle their own distribution.
Some retail stores are sole proprietorships with one outlet, especially in the regions outside Tbilisi, but there are a growing number of market chains such as SPAR, Carrefour, Goodwill, Loli, 2Steps, Fresco, Smart, Agrohub, Nikora, Europroduct, Gastronom, etc. Retail chain shops sell Western brands of cosmetics, household goods, clothing, and electronics.
Turkish trading companies successfully operate in Georgia and opportunities may exist to form alliances with these companies and use their networks.
The U.S. Embassy in Tbilisi regularly fields inquiries from U.S. businesses. In addition to complimentary consultations for U.S. companies, the Political/Economic Section offers services such as “Gold Key Matching Service,” “International Partner Search,” or “Single Company Promotion” for a nominal fee on behalf of the Department of Commerce. Information may also be available from the Ministry of Economic Development’s Business Information Centers, as well as from the Ministry website (http://www.economy.ge/?lang=en). In addition, the Ministry also supports a website for privatizations and tenders.
Establishing an Office
Business entities include sole proprietorships, joint liability companies, limited partnerships, limited liability companies, joint stock companies, and cooperatives.
In general, the process of registering a business in Georgia is quick, streamlined, and usually takes one day to complete. Registration of companies is carried out by the National Agency of Public Registry (NAPR). For registration purposes, the law does not require a document verifying the amount or existence of the charter capital. A company is not required to complete a separate tax registration. Pursuant to Georgian legislation, initial registration includes both the state and tax registration.
The following information is required to register a business in Georgia: personal information on the founder and principal officers, articles of incorporation, and the company’s area of business activity. Other required documents depend on the type of entity to be established. Registration fees are minimal.
Current legislation does not consider a representative of an international company a legal entity. However, the registration procedure is the same as for other types of enterprises. Companies should consult with licensed attorneys and accountants prior to opening a business in Georgia.
Franchising is gaining popularity in fast food, production of soft drinks, hotels, and retail trading of consumer goods, cosmetics, and apparel. Coca‐Cola, McDonald’s, Pepsi, Wendy’s, Subway, Dunkin’ Donuts, KFC, Domino’s Pizza, Baskin Robins, Best Western, Wyndham Hotels & Resorts, Burger King, Marriott, and Holiday Inn all operate in Georgia. Franchise relationships are governed by contract and commercial laws.
Direct marketing is growing together with improvements in telecommunications and respective sectors. Express courier services operating in Tbilisi include FedEx, UPS, and DHL.
Joint ventures can be founded as any of the available entities for doing business in Georgia and operate subject to normal commercial laws. Licensing is regulated by contract and by the Law on Issuing Permits and Licenses for Entrepreneur Activity.
There are number of express delivery and courier services operating in Georgia, including FedEx, UPS, DHL, Aramex, Camex, Express Line Services, Inex Group, etc. The local company USA2Georgia LLC is successfully implementing package shipments from the United States, while GetIt.ge is preferred for shipments from/to the United Kingdom.
Time for shipment varies. For example, USA2Georgia has daily shipments to Georgia. Shipping takes approximately one week and includes a free delivery service to homes within Tbilisi. Shipping fees depend on package weight and dimensions. Due to the reduction in available flights after COVID-19 pandemic border closures, shipment delivery times have increased.
The state owned Georgian Post provides a universal postal service and has a significant comparative advantage as the largest network across the country. Georgian Post incorporates “Georgian International Express Mail Service” founded in 2001. It is included in the world network of the Express Mail Services providing mail services for EMS letters and parcels in 192 countries. The government announced a plan to privatize Georgian Post in 2019; however, a prolonged audit of Georgian Post and the COVID-19 pandemic led to the postponement of the sale to 2022.
Information on potential business partners and clients can be difficult to obtain in Georgia, although different online catalogues and web resources offer sufficiet data, but mostly in Georgian. Laws and regulations are subject to change. Local attorneys and consulting firms can be of assistance. A list of attorneys is available from the U.S. Embassy in Tbilisi.
The Political and Economic Section of the U.S. Embassy also offers Department of Commerce services such as “Gold Key Matching Service,” “International Partner Search,” “Single Company Promotion,” etc. for a nominal fee.