Until the legislation is refined IT companies do not see prospects

As a result, more than 1,000 IT companies attracted by Georgia's tax incentives established in 2011 will not hesitate to seek better markets for operations. In this case, the Georgian government will need to make more efforts to retain the companies and benefits attracted by these tax incentives over time.


With the support of Basisbank, a residential complex is being built in...

The total cost of the project is 4 million US dollars, and the financial support provided by the Bank is 3 million US dollars.The construction of the complex of international standards includes 2800 sq. M. Residential complex of 144 apartments with open and closed parking, located in a safe environment, combines commercial, office and residential areas. "Bilderz Didi Digomi" have a well-maintained green yard with an area of 1000 sq.m, a children's room and a recreation area.The construction of the residential complex will be completed in December this year, and residential and office premises with an area of 45 sq.m., in a green frame condition, will be transferred to the customer. Those wishing to purchase an apartment can use a simplified mortgage loan from Basisbank. The application can be filled online.“The company Bilderz is established on a solid financial basis, from a team with long-term experience, and like all projects, “Bilderz Didi Digomi” is fully funded in advance. Bilderz Didi Digomi is a 12-story residential building that we managed to realize with the support of a strong and professional Basibank team. I am glad that, in partnership with Basisbank, we are implementing such an important project, which is highly reliable, and offer our residents a safe living environment built from environmentally friendly materials.” - said George Arveladze, Managing Partner of Bilderz.  “One of priorities of Basisbank  is to support the construction sector. The implementation of such projects is important for the country as a whole, and also contributes to the development of the construction industry and strengthening the economy. I am glad that we are partnering with a company that is highly reliable among customers, and we are proud that another successful project is being implemented in partnership with us, which, in general, will have a positive impact on the business environment.”- Said Gigi Gabunia, Commercial Director of Basisbank.


🎥 Partnership between BasisBank and Energy Drink Market Leader Boom Grou...

The drink is bottled from the raw materials of German Dieler and French Crystalco, which gives the company the opportunity to produce products that meet European standards.Boom Group employs up to 130 employees and it is a priority for every team member to ensure that products are available daily to customers throughout Georgia.“In “Basisbank” we found a team of professionals and a friendly atmosphere, which led to effective and successful cooperation. They understood the importance of the brand for Georgia and believed in our goals. Partnership with Basisbank helps us to develop in the market every day.In the person of Basicbank, we have a reliable and reliable financial partner, with whom we will implement many interesting and successful projects in the future,” Besarion Urumashvili, Commercial Director of Boom Group.“The energy drink market is growing not only in Georgia, but throughout the region. Boom Group has been able to take a leading position in such a competitive environment, where the world's energy drink brands are represented.Noteworthy is that Bumi is a brand created in Georgia that has expanded beyond the Georgian market and is already sold in 18 export markets in the region.Cooperation between Basisbank and Boom Group turned out to be quite effective. This is a fast growing company that develops with us every year and reaches new dimensions.We are pleased to be a reliable financial partner of Boom Group and support it on its way to development.  


The average salary in the IT industry is 2.5 times higher than the nat...

Georgian Tech survey indicates that even though salaries in IT companies with the aforementioned status vary in a number of ways, the industry will continue to be the most lucrative in 2022. According to the research, IT specialists aged 27-29 and 35-39 earn the highest salary, which is 8,500 GEL on average. The lowest salary comes to the age group of 15-17 years - 1,250 GEL.The research indicates that the range of salary volume is even sharper if we take seniority into account. Specialists with 6 to 12 years of experience earn the highest salaries, averaging 12,500 GEL per month. The salary for those with 4-6 and 12-15 years of experience is 8,500 GEL. Specialists with less than 1 year of experience have the lowest salary - 1,250 GEL.In terms of gender distribution, the study included 90% men (257 respondents) and 10% women (27 respondents). In this instance, the median or average salary is 4,500 GEL and is the same for both genders.Employees in the IT industry are paid differently depending on which programming languages they know. Specialists who work on Kotlin have the highest average salary - 8,500 GEL per month. TypeScript experts are in second place with 7,500 GEL. With a monthly income of 5,500 GEL, the most popular Javascript experts rank fifth. SQL specialists earn the least, with a monthly salary of 3,000 GEL.According to Shorena Kopaleishvili, Chairman of the Association of Georgian Virtual Zone Persons, information technology (IT) is not only one of the fastest-growing industries, but it is also an essential component of progress. She claims that the business community has identified several major economic effects of information technology.1. Direct job creation - The information technology industry is and will continue to be one of the biggest employers.2. The contribution of information technology to the growth of the gross domestic product (GDP)—instances from other nations support the positive effects of IT in this area.3. Creation of new business administration models - accessibility to public or private services via technology and the Internet.4. Business Advancement – The use of information technology tools by businesses boosts productivity and enhances businessData requested from the Revenue Service confirms that companies with the status of Virtual Zone Persons represent an important link in this direction in Georgia. If the taxes paid by these companies exceed 2,225,000 GEL in the budget in the first year (2011) after the introduction of tax benefits, this figure will exceed 70 million GEL in 2022.Supporting initiatives that work to build strong Western representation is crucial. High-tech start-ups and investment initiatives should receive more active support. The government should actively support the country's positioning in this direction. According to Shorena Kopaleishvili, Georgia has a real chance to compete with multiple advanced nations and draw sizable investments in the information technology sector with the right, open, and pro-business policy.Shorena KopaleishviliChairman of the Association of Virtual Zone Persons


🎥 Partnership of Basisbank and Nutrimax

Nutrimax is the most powerful high-tech enterprise in Georgia, producing up to 60,000 tons of food per year. The business that started with a few people, has about 120 employees today.Basisbank invested GEL 12 million in the construction of a new enterprise for food and food supplements for companion animals. The company is simultaneously pursuing expansion plans and is contemplating new markets. The official opening is scheduled in June.With mutual trust, flexible solutions and comfortable relationships, the agreement turned out to be fruitful. This partnership supports the achievement of both short- and long-term goals."Partnership between Basisbank and Nutrimax started in 2021. We discussed the idea of expanding the first large-scale enterprise in Georgia, we saw the growth potential and real prospects of business development.The financial support of Basisbank and the Produce in Georgia project have equipped the new enterprise with modern equipment and the improved, European-standard infrastructure. Now Nutrimax produces not only for the local market, but also for export.Nutrimax is a clear example of how to plan and develop a business with a reliable financial partner." - Gigi Gabunia, Commercial Director of Basisbank.Video story of partnership between Basisbank and Nutrimax


Virtual Zone Persons' budget contributions are up y-o-y

In particular, according to the data requested from the Revenue Service by the Association of Georgian Virtual Zone Persons, the taxes paid by these companies exceeded 2,225,000 GEL in the budget in the first year (2011), and after the introduction of tax benefits, this data exceeded to 70 million GEL in 2022.More detailed statistics clearly indicate the effectiveness of the resolution of the Government of Georgia "On the rules and conditions for granting the status of the Virtual Zone Person and the determination of the person granting the status of the Virtual Zone Person".In particular, the dynamics of taxes paid by this industry to the state budget of Georgia in 2011-2020 are as follows:Source: Revenue Service of the Ministry of Finance.As can be seen from the table, after the introduction of tax benefits, the budget revenues from the VZP IT sector are increasing almost continuously. In particular, in 2012, compared to the previous year, the taxes paid by these companies to the budget increased by 35.1%, in 2013 - by 14%, and in 2014, revenues increased sharply and amounted to 139.8%. In 2015, the growth was 41.5%, in 2016 and 2017, this indicator decreased; however, it returned to growth in 2018 and increased by 41.5% compared to the previous year.The volume of payments by VZP companies rose to another height in 2019, and the growth showed 270.7%. The dynamics were maintained even in the pandemic year 2020, and compared to the previous year, the increase amounted to 1.6%.In the table, if we observe the volumes of income taxes from year to year, we can see at what rate the volume of salaries paid by the Virtual Zone Persons in Georgia is increasing. This directly indicates the significant contribution of this industry to the economy of Georgia.Representatives of the sector say that if the Georgian government further refines the legal framework, which will reduce the opportunities for manipulation by the agencies, more international companies will enter the Georgian market, which will contribute to the growth and development of both the sector and the economy as a whole.The mentioned issue became relevant after the fact that, in recent years, companies with the status of Virtual Zone were fined due to the ambiguity in the legislation. This amount was several million.The Association of Georgian Virtual Zone Persons, which defends the interests of the participants in this industry, declares that they have recently started active cooperation with state agencies, and as for controversial issues, some of them have become the subject of court consideration.Shorena Kopaleishvili, the head of the Association of Georgian Virtual Zone Persons, in a conversation with GBC, claims that the promotion of this industry should be a priority for the state, which will contribute to the development of the country in all directions."As confirmed by the figures discussed above, the development of information technology and the promotion of this industry should become one of the state's priority directions, because this area affects almost all areas of work. Today, almost everything works with the help of information technology, and almost every industry recognizes the importance of information technology: business, education, finance, healthcare, and etc.  In today's competitive world, IT services are critical for any organization to increase productivity, streamline business operations, and drive efficient economic growth. As a result, the regulation of legislative and tax issues, as well as the creation of an appealing investment environment, are the prerogatives of the state, while the fundamental obligation of a private person is to pay taxes. It is a public relationship between the taxpayer and the state, where the state is dominant.As a result, the regulation of legislative and tax issues, as well as the creation of an appealing investment environment, are the prerogatives of the state, while the fundamental obligation of a private person is to pay taxes. It is a public relationship between the taxpayer and the state, where the state is dominant. Taking into account the dominant role of the executive branch of Government in tax matters, the legislative body should create such a legislative base where economic criteria will be the starting point along with fundamental human rights," says Shorena Kopaleishvili.


Loss-making "Sakaeronavigatsia" increases salaries by 9% and announces...

Acceptance of proposals in the tender starts on May 27 and will continue until June 1.According to the tender requirements, the bidder must have at least 15 years of experience in the production of air traffic control MSSR radars. In addition, the bidder must also submit at least three letters of recommendation for completed projects in the supply and installation of Monopulse Secondary Survey Radar (MSSR) in EU Member States within the last 7 years.LLC "Sakaeronavigatsia" is a 100% state company. "Sakaeronavigatsia" has been losing money for many years.In 2020, its loss amounted to 28.7 million GEL. In 2021, despite the 56% increase in sales to 76.7 million GEL, the company's annual loss amounted to 8.8 million GEL.The loss is mainly caused by the cost of personnel compensation, which is more than 61% of the company's total assets and amounts to 47 million GEL. Compared to 2020, the company increased employee salaries by almost 10% (2020 - 46 million GEL).According to the financial report, the company had 824 employees at the end of 2021. Accordingly, the average monthly salary of 1 employee is more than 4750 GEL.Supervisory Board:Chairman: Levan Karanadze,Deputy Chairman: Mariam Kvrivishvili;Member: Lela Chikovani;Member: Giorgi Butkhuzi;Member: Mikheil Dundua;Executive Director - Giorgi Edisherashvili;General Director - Gocha Mezvrishvili.


The Virtual Zone Persons contributed more than 66 million to the budge...

Among them, according to the information from the Revenue Service, the Virtual Zone Persons paid 33,142,127 GEL in the form of VAT and 235,988 GEL in the form of property tax (including agricultural/non-agricultural land).During the analysis period, the import tax on Virtual Zone Persons amounted to 15,786 GEL, the profit tax was 8.3 million GEL, and the income tax exceeded 24.5 million GEL.According to the most recent data, approximately 1100 IT companies in Georgia have been granted the status of Virtual Zone Persons, and their tax contribution to the Georgian economy appears to be substantial.Strengthening local IT companies, and attracting Virtual Zone Persons and international IT companies with tax incentives to Georgia was one of the important steps in the direction of increasing the country's economy, employment market, and the qualification and remuneration of employees.The Association of Georgian Virtual Zone Persons claims that thanks to the tax incentives in this field, hundreds of Georgian IT specialists, without leaving the country, receive the same remuneration as their colleagues in developed Western countries. The Association also says that the young generation is well aware that the future is in technology, and they believe that the IT market should not appeal only to writing codes and that it is necessary to promote other IT directions as well. For all of this, it is critical to improve legislation and popularize the field so that global companies do not relocate their operations to other countries. Especially since today Georgia has many competing countries in the world that are trying to attract international IT companies to their markets with tax incentives.However, due to the ambiguity of tax legislation, this industry has already encountered some difficulties in recent years. This became the basis for the interpretation of the tax authorities, and the companies were fined millions of GEL as a result. The aforementioned circumstances had a significant impact on these companies' motivation, and these processes also caused significant reputational damage to the country. The Association of Georgian Virtual Zone Persons, on the other hand, has been actively communicating with the government in order to resolve recent issues.The Association notes that there have been some changes in this direction, and it is hopeful that the Ministry of Finance will take action. Members of the Association, in particular, work to bring the positions of business and the state closer together, to promote the attractiveness of the industry, to improve legislation, and to address other important issues.


Cement Invest acquired its joint venture partner's, Heidelberg Materia...

HCG is the leader in the Georgian cement and related products market. It operates two integrated cement plants (one in Kaspi and one in Rustavi), two aggregates plants, a cement grinding mill in Poti, a cement terminal in Supsa and 14 concrete batching plants across the country. HeidelbergCement Georgia supplies cement and concrete to almost every major construction project in Georgia.Since the formation of the JV partnership (the “JV”) in 2017 between Heidelberg Materials and the Investors, the JV under joint management, successfully accomplished several high-impact production capacity and efficiency improvement projects, including the inauguration of a state-of-the-art new dry kiln plant in Kaspi. This investment of over 100,000,000 US Dollars, together with other initiatives has brought HCG to a new level of technological excellence, quality improvements and unprecedented growth.Heidelberg Cement Georgia will retain its name and brand and technical support throughout the year, but may continue operations with a different brand name in future.The Investors plan to continue its growth strategy through further investments in capacity expansion, technology improvement and energy efficiency. Georgia is the only country where the Investors own cement and related businesses and thus, they hope that HCG would benefit from this new, Georgia-focused investment approach. The Investors own and manage businesses in Georgia in a number of industries, including building materials, hospitality, financial institutions, telecoms and media, steel, real estate, agriculture and energy.


Kartli power plant of Gori has a profit of 12 million

The company's cost of sold goods decreased by 1.1% and amounted to 6.8 million GEL in 2021.Although in the reporting period the company's total profit decreased by 8.5% to 10.7 million GEL, the company increased its net profit by 478% to 11.8 million GEL. The mentioned increase was caused by the loss caused by the company's financial obligations, in which the company lost 4.8 million GEL in 2020.The increase in the company's net profit is also due to financial income, which increased by 446% compared to 2020 to 5.6 million GEL.During the reporting period, the company's assets decreased by 17.4% to 62 million GEL, but the capital increased by 61.5% to 27.3 million GEL.Kartli Wind Power Plant LLC was registered in 2012. Its current owner is JSC "Georgian Renewable Energy Operations". The station was put into operation in 2016 and its average annual output is 84.1 million kilowatts. The installed capacity is 21.7 megawatts.The total cost of the Gori wind power plant project was 34 million USD, of which 22 million USD was financed by the European Bank for Reconstruction and Development (EBRD).100% share of the Kartli wind power plant was sold at the auction held on November 15, 2019 for $14,400,000 (11 hectares of land, 6 wind turbines, etc.). "Georgian Wind Company" LLC, which is part of the investment holding "Georgian Capital" (GCAP), won the auction.