Free Industrial Zones in Georgia (FIZ)
A Free Industrial Zone (FIZ) is a delimited part of Georgia with a special tax and customs regime. A company registered inside a FIZ is exempt from profit (corporate income) tax on its permitted in-zone activities, from VAT on transactions within the zone and on foreign goods brought in, from property tax on property located in the zone, and from import duty on foreign goods entering the zone. In return it pays income tax on employees by declaration and — when it supplies goods to a person in the rest of Georgia that is not another FIZ enterprise — a 4% payment on the value of that supply. FIZs suit manufacturing, processing, assembly and re-export businesses rather than local services. This is general information, not legal or tax advice.
Last reviewed: 10 July 2026 · Last checked: 28 July 2026
A Free Industrial Zone (FIZ) is a defined part of Georgia’s territory with a special tax and customs regime set out in the Law of Georgia on Free Industrial Zones and the Tax Code of Georgia. Companies registered inside a zone enjoy a package of tax exemptions designed to attract manufacturing, processing and re-export activity and to encourage capital and technology inflow.
This guide explains what a FIZ company is, which taxes are exempt, the 4% payment on sales into the rest of Georgia, who the regime suits, how to set up, and its limits. It is general information, not legal or tax advice — confirm current rules and any figures with the Revenue Service before relying on them.
What a Free Industrial Zone company is
A FIZ is a type of free zone under the Tax Code, established on a delimited territory (of more than 10 hectares) with a special legal and economic regime. Powers of local self-government do not apply inside it, and entry and exit run through a customs checkpoint.
A FIZ enterprise can be a company of any legal form and ownership that is registered inside a specific zone. Activity within a zone must be carried out by enterprises registered in that zone (companies registered outside operate in the zone through a permanent establishment registered there). Conversely, when a FIZ enterprise operates in the rest of Georgia, it does so as a permanent establishment of a foreign enterprise.
The organiser and the administrator of a zone are not themselves FIZ enterprises and must be registered outside the zone.
The tax exemptions
Taxation inside a FIZ is governed by the Tax Code. Under Article 9 of the Law on Free Industrial Zones, a FIZ enterprise benefits from the following (except as otherwise provided by the Tax Code):
| Tax | Treatment inside a FIZ |
|---|---|
| Profit (corporate income) tax | Profit from permitted activity conducted in the zone is exempt |
| VAT — foreign goods brought into the zone | Exempt |
| VAT — transactions within the zone | Exempt |
| Property tax | Property located in the zone is exempt |
| Import duty — foreign goods brought into the zone | Exempt |
| Import duty — zone-produced goods taken into the rest of Georgia | Exempt (but VAT applies on import — see below) |
| Personal income tax on employees | Payable by employees on the basis of an income declaration |
Bringing Georgian goods into a zone is treated as export, and taking goods out of a zone to another country is also treated as export.
The 4% payment on sales into the rest of Georgia
The FIZ regime is built around goods that move into and out of the zone rather than into the domestic market. Two rules apply when goods leave the zone for the rest of Georgia:
- The 4% payment. If a FIZ enterprise supplies goods to a person registered under Georgian law that is not another FIZ enterprise, the enterprise pays 4% of the consideration received or receivable for that supply. If the goods are supplied free of charge, the 4% is calculated on their market price. Supplies between FIZ enterprises are excluded. (Law on Free Industrial Zones; Tax Code; see also PwC Worldwide Tax Summaries.)
- VAT on zone-produced goods entering Georgia. When goods produced within the zone are brought into the rest of Georgia, they are subject to only VAT on import, regardless of quantity.
Confirm exactly how these apply to your goods and transactions with the Revenue Service.
Permitted and prohibited activities
Production and processing of any goods, and the provision of any services, are permitted inside a zone, except for the activities listed below. For goods produced in a zone, the Revenue Service issues a certificate of Georgian origin.
The Law prohibits the following inside a FIZ:
- manufacturing or trading in arms and ammunition;
- manufacturing or trading in nuclear and radioactive substances;
- bringing in, storing, manufacturing or selling narcotic and psychotropic substances;
- bringing in, storing, manufacturing or selling tobacco products or tobacco raw materials (tobacco may be brought in for consumption within the zone, but this is not treated as export).
An ordinance of the Government may impose further restrictions on particular activities in a given zone. Using buildings for living purposes is not allowed inside a zone.
Who it suits
The FIZ regime is aimed at businesses that make, process, assemble, store or re-export physical goods, especially with cross-border flows. It tends to work best where:
- inputs are imported and finished goods are exported (both movements are outside the domestic tax net);
- transactions are largely within the zone or with other FIZ enterprises (no 4% payment);
- the business can commit to the space, lease and operating terms of a specific zone operator.
It is generally less suitable for companies selling mainly to Georgian customers or providing purely local services, because supplies into the rest of Georgia attract the 4% payment and, for zone-produced goods, VAT on import. For a broader comparison of preferential regimes (virtual zone, international company, special trading company, small business), see Business statuses in Georgia and Corporate profit tax in Georgia.
The operating zones
As of 2026 there are four operating Free Industrial Zones, each run by a private operator that sets its own registration, lease and service arrangements:
- Tbilisi Free Zone — near Tbilisi.
- Kutaisi Free Zone — operated by Georgian International Holding.
- Hualing Kutaisi Free Industrial Zone — in the Kutaisi area.
- Poti Free Industrial Zone — at the Black Sea port of Poti.
Registration procedures, available space, minimum commitments and fees differ between operators, so you deal directly with the chosen zone. Because operator terms and pricing change, this guide does not quote zone fees; request current terms from the operator.
How to set up
In outline, establishing a FIZ enterprise involves:
- Choosing a zone whose location, logistics and terms fit your activity.
- Registering an enterprise inside that zone, in line with Georgian company-registration rules and the operator’s procedures. See registering a company in Georgia for the general framework.
- Confirming the FIZ status with the tax authorities, so the enterprise is recognised as a FIZ enterprise for tax purposes.
- Agreeing the lease or space allocation and on-site services with the operator, and beginning operations under the zone’s charter and customs regime.
Limits to keep in mind
- Exemptions cover permitted in-zone activity; other income may be taxed under the general rules of the Tax Code.
- Selling into the domestic market triggers the 4% payment and, for zone-produced goods, VAT on import.
- Employees pay personal income tax on the basis of a declaration.
- A zone can be liquidated on expiry of its term, at the organiser’s request, or by court decision — a factor when signing long-term leases.
- The regime is designed for goods and industrial activity, not for residential use or purely local services.
Legal sources
This guide is based on the Law of Georgia on Free Industrial Zones and the Tax Code of Georgia, with cross-reference to PwC’s Worldwide Tax Summaries for the 4% payment and exemption summary. Rules and figures are periodically updated, so confirm the current position with the Revenue Service before acting. This is general information, not legal or tax advice.
Frequently asked questions
What taxes does a Free Industrial Zone company avoid?
Under the Law on Free Industrial Zones, a FIZ enterprise's profit from its permitted in-zone activity is exempt from profit (corporate income) tax; transactions within the zone and foreign goods brought into the zone are exempt from VAT; property located in the zone is exempt from property tax; and foreign goods brought into the zone are exempt from import duty. Employees still pay personal income tax, and the company still pays a 4% charge on goods it supplies to the rest of Georgia.
What is the 4% payment?
If a FIZ enterprise supplies goods to a person registered under Georgian law that is not itself a FIZ enterprise, it pays 4% of the consideration received or receivable for that supply (or 4% of market price if the goods are supplied free of charge). This charge does not apply to supplies between FIZ enterprises. Confirm how it applies to your case with the Revenue Service.
Who is a Free Industrial Zone best suited to?
Businesses that produce, process, assemble, warehouse or re-export physical goods — especially with an import/export flow — benefit most, because the exemptions are built around moving goods in and out of the zone. It is generally not designed for companies whose customers are mainly inside Georgia, or for purely local services, because supplies into the rest of Georgia trigger the 4% payment and normal import rules.
Which Free Industrial Zones operate in Georgia?
As of 2026 the operating zones are Tbilisi Free Zone, two zones in Kutaisi (Kutaisi Free Zone, operated by Georgian International Holding, and Hualing Kutaisi Free Industrial Zone), and Poti Free Industrial Zone. Each zone is run by a private operator that sets its own registration, lease and service terms.
How do I set up a company in a Free Industrial Zone?
You register an enterprise inside a specific zone according to Georgian company-registration rules and the operator's procedures, then confirm the FIZ status with the tax authorities. The zone operator handles the lease or space allocation and the on-site services. Terms, fees and available space differ between operators, so you deal directly with the chosen zone.
Can a Free Industrial Zone company also trade inside Georgia?
It can, but sales into the rest of Georgia are treated as leaving the zone: the 4% payment applies to goods supplied to non-FIZ persons in Georgia, and goods produced in the zone that are brought into the rest of Georgia are subject to VAT on import. A FIZ enterprise that carries on activity elsewhere in Georgia does so as a permanent establishment of a foreign enterprise.