Foreign Direct Investment

According to UNCTAD's World Investment Report 2022, FDI flows to Georgia in 2021 increased to USD 1.15 billion, doubling the level recorded one year earlier. In the same year, the total stock of FDI was estimated at USD 19.3 billion, around 103.7% of the country’s GDP. FDI is largely supported by natural resources, as more than 30% of inflows are related to extractive industries. Trade and finance attract 20% and 11% of FDI inflows respectively. Georgia attracts investments from several countries: Azerbaijan is the largest investor due to the ongoing construction of the Shah-Denizpipeline (the country holds 18.8% of the total FDI stock in Georgia), followed by the UK (13.9%), the Netherlands (8%), Turkey (6.8%), and Cyprus (5.6% - data National Statistics of Georgia). However, the country is increasingly opening up to Asian investment. According to provisional data from the National Statistics Office of Georgia, in 2022 FDI inflows reached USD 1.67 billion. One of the largest investors was Spanish water management company Aqualia, who bought 80% of the shares of Georgian Water and Power, investing USD 180 million.

UNCTAD estimates that FDI flows into Georgia will grow moderately in the coming years, supported by rising commodity prices and stronger economic growth. To attract investors, the country offers many tax and legislative advantages. The Georgian economy has been almost fully liberalised and currently offers an attractive economic climate for investment. Georgia does not have specific mechanisms in place for FDI as governmental reviews of investment projects can be requested on an ad hoc basis. Furthermore, the national law guarantees the investors’ right to convert and repatriate income after payment of all due taxes. Overall, business and investment conditions are sound and open-market policies are maintained along with low tax rates; however, there is an increasing lack of confidence in the judicial sector. Corruption, historically very present in the intermediate levels, has been largely eradicated - a major obstacle to attracting FDI. According to Transparency International, Georgia currently ranks 41st out of 180 economies on the 2022 Corruption Perception Index and 35th out of 176 in the 2023 Index of Economic Freedom.