International business expansion can bring even more successful and rapid results where there are unique opportunities. So I’m always on the lookout for them, especially in countries that aren’t top of most people’s lists. Last week I visited Georgia, and discovered an incredibly exciting pace of growth in a beautiful and welcoming country that exceeded all my expectations. As soon as you step off the plane you start to see the potential.
It’s a small country with a population of just 3.5 million, and from 1921 to 1989 was part of the USSR. Now it has reverted to proud independence, and is capitalising on its geographic position at the “crossroads of Europe”, a logical transport link between Asia and Europe. As a result, most Foreign Direct Investment has been in infrastructure – new rail lines and motorways, and a deep water port in Anaklia on the Black Sea coast. Now the country is starting to focus on other opportunities, and I see excellent potential for mid-range businesses – but it will be necessary to grasp them quickly.
At present, getting there can be a challenge – there are relatively few direct flights from Western Europe to the capital, Tbilisi (and none from the UK), and almost all of those arrive and depart at an unconscionable hour of the early morning. That’s set to change over the next year, with budget airlines now negotiating access to other airports that are convenient both for the capital and the coast. Once landed, immigration is a breeze, and it’s just the first warm welcome one receives.
In recent years Georgia has modernised rapidly, with glitzy new buildings and malls, but all the history has been retained. The old town of Tbilisi is charming, and the remote cave monasteries fascinating – and between the two is some of the most beautiful countryside in the world. The coastal resorts are similarly stunning. Costs are low, the people are welcoming, summers are hot and sunny, the food is delicious – and it’s the country where wine was invented. The potential for developing tourism, therefore, is huge, and arguably the top motive for FDI.
The country is also justifiably proud of being rated the 3rd safest in the world, and ranks highly for ease of doing business, economic freedom, lack of corruption and economic stability. Taxation, an important consideration for most businesses, is simple and low – it claims to be the 9th lowest tax burden country in the world – and new policies from 2017 will make the system more attractive still.
I met with the Ministry of Economy, and learnt that their other priorities are energy, transport and manufacturing. Even without the attractive government incentives, the free trade agreements with the EU, EFTA, CIS, GSP and Turkey, availability of a young educated workforce with low labour costs (average US$ 355/month) and inflation at a low 4.2% make a compelling case for considering manufacturing.
One thing there is no shortage of is water, and only 20% of the potential for hydro-electric generation has been exploited. The value here is not just domestic, but in exports to Turkey and Russia, neighbouring countries with power deficits.
I was quickly convinced that almost every type of business should think seriously about expanding to Georgia – the time is right.
by Oliver Dowson, CEO at ICC – International Corporate Creations