With a population of almost 4 million people, Georgia is a country that’s rapidly moving toward becoming a prime interest of many potential investors. In the first quarter of 2022, the National Statistics Office of Georgia recorded $568.2 million in foreign direct investments.
Currently, the top investments come from Spain, reaching almost $200 million for Q1 of 2022. The US is positioned in fifth place with $31.7 million.
One of the main reasons for the increase in investments is the country’s strategic location. Namely, Georgia is at the crossroads between Asia and Europe, bordering several big countries, including Russia and Turkey, and the Black Sea to the west. All of this opens the way for high business traffic, not just between these countries but between the two continents in general.
Tbilisi, the capital of Georgia, is where most of the investments – $455,363 million – were poured. This is thanks to the thriving economy as well as the help of several enterprises like the multifunctional business center Vake Plaza.
What Makes Georgia an Attractive Investment Opportunity?
Aside from the country’s location, in recent years, Georgia has seen an increase in its economic growth. Namely, the GDP rate for April 2022, stated in the latest report by the National Statistics Office of Georgia, was 2.6% year-on-year (YoY), meaning it had a 2.6% increase from the same period last year. Additionally, the average GDP between the months in Q1 2022 was 10.8%.
It is important to note that this growth happened amidst huge global events (the Covid pandemic and the Russian-Ukrainian war) close to the country’s border. In the report published by the World Bank, this body predicts that Georgia’s economy will reach around 5.5% by 2023 and keep a steady pace with an additional 5% increase in 2024.
Moreover, the current inflation rate has managed to stay below the average, with predictions of it returning to 3% in 2024.
The 2014 trade agreement between Georgia and the EU (which entered into force in 2016) has allowed Georgia to boost its trading power. This enabled the export rates to jump by $3 million between 2020 and 2021 and now round at $8.480 million for Q1 2022.
What Drives US Companies to Invest in Georgia?
Rapidly developing as a modernist country, Georgia prides itself on having a skilled labor force, low taxes, competitive energy costs, and a working environment free of corruption.
Georgia’s fast-growing tech sector is the key point that attracts US companies to invest in the country. The fair taxation policy, the competent skill force, and Georgia’s geographical position, among the previously stated advantages, draw the attention of American investors.
As mentioned before, US businesses are slowly but steadily keeping up with some of the biggest investing counties in Georgia, such as Spain, the UK, and Turkey.
Another incentive for bringing in investors from overseas is the fact that the government of Georgia doesn’t impose any working visas or permits for 90 days, allowing investors to bring in their professional knowledge.
Vake Plaza to Boost Georgia’s Economy
As previously stated, some Georgian enterprises have aided the unceasing growth of the Georgian economy. One such company is Vake Plaza. This business hub is a result of the vision of David Kezerashvili – former Georgian Minister of Defense, now entrepreneur, and angel investor – to make Georgia a leading destination for US investments.
Vake Plaza, the multifunctional business center in Georgia’s capital of Tbilisi, is a prime example of Georgia’s metropolitan views of modern business-doing. Geostat positioned this company as the second most-sought after real-estate property in Georgia, elevating the price for an sq/m to GEL 3845.
The 11-story facility was created and designed to hold offices for the emerging number of companies choosing to do business in Tbilisi. With 22,000 sq/ft, the Vake Plaza has been deemed the focal point of the business community in Georgia’s capital.
Will the US-Georgia Investments Continue?
Seeing that Georgia offers many advantages for US businesses, the growth of the US-Georgia investments has firmly solidified its increase. Historically, the United States of America has firmly backed Georgia in its establishment of democracy and continues to trace the same path even today.
In the field of investments, the two countries have the High-Level Trade Dialogue, enforced since 2012, which is in continuous use today. This framework deepens the relations between Georgia and the US and builds bridges for ongoing mutual investments.