Investing in foreign countries is a new option for personal investors. Each foreign country has its own areas of economic focus for investors from other countries. Among different countries, because of the free and transparent atmosphere, Georgia is a great place to invest in. According to a report in 2018, Georgia is among the top transparent nations in the Black Sea region. This makes it a great opportunity to invest in Tbilisi, the capital, and other regions of Georgia too.
Tbilisi was a point of conflict among various global powers throughout history. It is not just because of its location on the crossroads between Europe and Asia, but also its nearness to the lucrative Silk Road. The city’s location to this day ensures its position as an important transit route for various projects. So, in this article, we are intending to give you the most important reasons why you should invest in Tbilisi.
If you are bringing your money to Georgia, we recommend that you choose Tbilisi, the capital and the largest city of Georgia; here’s why:
1. Capital of Georgia
In 1122, King of Georgia David IV moved his residence from Kutaisi to Tbilisi, making it the capital. From 12–13th centuries, Tbilisi became a regional power with a thriving economy and astonishing cultural output. By the end of the 12th century, the population of Tbilisi had reached 100,000. The city also became an important literary and cultural center not only for Georgia but for the Eastern Orthodox world of the time. So, in comparison to other cities, Tbilisi has more potential and is one of the best choices for investment.
2. Tbilisi’s real estate is cheap.
Although Tbilisi is improving these days, its real estate is surprisingly cheap. Tbilisi is one of five capital cities where you can buy city center real estate for under $1,000 per square meter. There are properties just a stone’s throw away from the main metro station, placed right in the heart of the most in-demand area in Tbilisi, but they are cheap. All foreigners can buy property in Tbilisi. They have the same rights when it comes to buying residential real estate as Georgian citizens do. There is only one type of real estate investment that is not open to foreign investors and that is agricultural land. Georgia is such a small country but small countries often treat wealth much better than giant ones do which have millions of apparently wealthy citizens. After all, if you want your money to pile up, then you should consider real estate in Tbilisi.
3. The government offers better opportunities
As Tbilisi is the capital of Georgia, there are more and better government incentives there. For instance, there is a Free Industrial Zone operating in Tbilisi. Businesses registered in Free Industrial Zones benefit from certain tax exemptions. You will find plenty of other interesting opportunities when you dig deeper. The food processing field is one of the government’s top priorities these days. The Georgian government has supported this field through the Agricultural Projects Management Agency. With the increase in production, which is expected to grow due to currently undergoing new projects, this field will become more important. Aquaculture, greenhouses, wine & spirits, fresh mineral water, and meat and poultry are other fields you can invest in.
4. Increasing Tourism Numbers
Tbilisi is the vibrant, beating heart of Georgia. It is a picturesque, old town with eclectic architecture and superb eating and drinking opportunities. What’s more, Tbilisi has a hipster culture, techno scene and general air of cool: a humid subtropical climate with considerable continental influences. The city experiences warm summers and moderately cold winters. In addition to this, it is famous for its numerous hot springs.
Tbilisi is famous as the South Caucasus’ most cosmopolitan city. A multi-cultural city on the crossroads of history which is neither European nor Asian but a mixture of both East and West. Because of all these features, tourism is Tbilisi’s fastest-growing industry. The number of tourists visiting Tbilisi each year keeps on growing. Currently, the majority of visitors to the city are coming from the Middle East, Ukraine, Russia and the states of Central Asia. The number of direct flights to Western Europe is still limited. But, with new routes being added constantly, Tbilisi can look forward to increasing numbers of high-spending European tourists visiting the city over the next few years.
As the number of tourists is increasing, Tbilisi can provide some of the best small business investment opportunities. This city has a lot to offer to its visitors and the activities offered are quite varied too. For example, most international hotel chains that have their Georgian branches are mostly upper-class hotels. There is a lot of investment potential for mid-class hotels since these are somewhat lacking.
5. Incredible Rental Yields and High Occupancy Rates
An interesting choice of investment in Tbilisi is a rental investment. Making a real estate investment in Tbilisi means choosing an economic capital city of a small country that opens up to the world full of dynamism, charms, breathtaking landscapes and which allows great hopes for the future. Tbilisi is an attractive city for foreign companies and investors from all over the world. It is a cultural and architectural attraction. A city with an oriental and at the same time deeply western face. It is also the main University City of the country.
Tbilisi is a real estate market with strong, short-term rental demand, particularly throughout the year. Rents are the highest in Tbilisi and prices are rising for both rent and sale, 25% since 2017. A properly located property in Tbilisi will gain in value over the years and can be sold easily. The average rental yield in Tbilisi is 12 % but can reach 15% gross or even much more. A dynamic real estate- safe real estate investment- high rental yields, are positive elements if you wish to invest in Tbilisi. As a matter of occupancy rates, we can consider the number of tourists visiting Tbilisi which is increasing at a much faster rate than the number of hotel rooms being added to the market. This can make excellent occupancy rates – more than 80% for well-marketed properties and relatively high room rates, especially in the busiest summer months.
6. Doing business in Tbilisi is easy.
Georgia is now widely regarded as one of the most business-friendly countries in the world.
According to Dominik Istrate: ”After a sharp decline in 2015, Georgia’s economy has managed to return to a steady level of economic growth, reaching 4.7 percent over the last two years. The country is on course to become one of emerging Europe’s best performers when it comes to real economic growth. It is crucial for Georgia to maintain its economic expansion, however, foreign direct investment inflows. From this perspective, the country has seen its ups and downs. What the future holds heavily relies on how the country aims to attract international investment”.
Due to three key reforms, starting-up is easy in Tbilisi. First, administrative procedures such as tax registration or licensing made it easier to start a business. Besides, the Georgian government introduced laws that simplified tax compliance procedures. It leads to a reduction in the number of tax returns, making payments easier. Finally, the introduction of an e-payment system simplified the enforcement of business contracts. In short, Tbilisi does offer a business-friendly investment climate.
7. Possibility of renting all year long
Georgia’s capital, Tbilisi, enjoys pleasant weather throughout the year. Considering humidity, temperatures feel cold for about half of the year and otherwise nice with a very low chance of rain or snow throughout the year. The area is somewhat temperate compared to tourist destinations worldwide.
This is a great potential for investors as you can expect people to arrive in the city all year long. Unlike Batumi, which is a touristy city, where you can only see tourists show up during the tourist months, in Tbilisi, investing in rental properties can happen 365 days a year. Even during fall and winter, when the weather gets colder, the city starts to have different festivals, shows, and gatherings including New Year’s Eve and Christmas.
8. Most people speak English
In many countries, the local people can speak at least some English. However, you should not rely on this as a fact, when you travel. Well, Georgians speak Georgian, English (which is becoming 2nd most-common spoken language) and Russian. Older people speak Russian and Georgian only, while the younger generation mostly speaks English and Georgian. Tbilisi is a city full of universities and colleges. So, there is a flock of youngsters who can speak English everywhere in Tbilisi. These days, Tbilisi is always crowded by tourists throughout the year, and this fact has made local people speak English more than before.
9. Liberal Visa Regime
Georgia has one of the world’s most liberal visa laws. As a result, wherever in the world you’re from, you’re unlikely to have much trouble getting into this country. Depending on the purpose of your travel to Georgia, there are different categories of visas that will apply to the occasion. Whether you are planning to go on a visit, study or work and reside there permanently, you will have to apply for a different Georgian Visa, accordingly.
A citizen of a foreign country who seeks to enter Georgia generally must first obtain a Georgian visa, which is placed in the traveler’s passport (a visa blank) or is issued electronically (electronic visa). Certain international travelers may be eligible to travel to Georgia without a visa if they meet the requirements for visa-free travel. The visa policy of Georgia became comparatively liberal, allowing citizens of 98 countries (Ministry of foreign affairs of Georgia) to enter, reside, work and study in Georgia without the necessity to obtain either visa or residence permit.
Also, the Georgian Government approved the list of 50 countries whose visa and/or residence permit holders may enter Georgia without a visa for an appropriate period and under appropriate conditions. Last but not least, anyone investing $100,000 or more in real estate has the opportunity of receiving one-year, temporary residence in Georgia – receiving all of the same benefits as native Georgians.
10. Tbilisi Property Offers Great Values
Prime real estate in the city center usually costs US$1,000 per square meter ($90 per square foot) at the very minimum. That’s true almost anywhere on the planet. It doesn’t matter if the local economy is underdeveloped. However, a nation’s capital or main business center has a certain type of vibe that other cities do not. On the other hand, there are many capital cities where you can buy centrally-located property for under US$1,000 per square meter. Tbilisi makes that list, joining others like Karachi and Cairo which are far less developed. Rental yields in Tbilisi, as mentioned before, are also high, around 5-6% range. Buying an apartment to rent out while awaiting long-term capital appreciation is certainly an option. Then, a permanent second home in Tbilisi is an ideal choice.
To sum up, there are many ways to make smart business investments in Tbilisi. The Georgian government has made Tbilisi a thriving destination for business investments. If you are considering investing abroad, Tbilisi has tried to make it easy and profitable for you. By taking smart steps, you won’t regret bringing your money to Tbilisi.