Free Industrial Zones in Georgia (FIZ)

A Free Industrial Zone (FIZ) is a specifically designated part of Georgia’s territory operating under a special legal, tax and customs regime.

Companies registered within a FIZ may benefit from significant tax and customs exemptions when conducting permitted activities within the zone. The regime is intended to encourage investment, production, processing, trade, service provision and the movement of goods through Georgia, while supporting the inflow of capital and technology.

What is a Free Industrial Zone enterprise?

A Free Industrial Zone is a type of free zone established within a clearly defined part of Georgia’s territory. As a general rule, its territory must exceed 10 hectares and operates under a special legal, tax and customs regime. Municipal authorities do not exercise their ordinary powers within a FIZ. The zone is also subject to customs supervision, with entry and exit taking place through designated customs-control points.

FIZ enterprises

A FIZ enterprise may have any legal form or ownership structure, provided that it is registered within the particular Free Industrial Zone.

As a general rule:

• activities inside a FIZ must be carried out by enterprises registered in that zone;

• a Georgian or foreign enterprise registered outside the zone may operate inside it through a permanent establishment registered within the FIZ; and

• when a FIZ enterprise conducts activities elsewhere in Georgia, outside the zone, those activities are treated as being carried out through a permanent establishment of a foreign enterprise.

Certain Georgian utility providers may operate within a FIZ without registering a permanent establishment there. This exception covers businesses supplying electricity, water, natural gas, communications and sewerage services, together with related activities.

Organiser and administrator

The organiser and administrator manage and operate the zone but are not themselves FIZ enterprises. They must be registered elsewhere in Georgia, outside the territory of the FIZ.

Tax and customs exemptions

Subject to the applicable conditions and exceptions, the principal benefits are:

Tax or transaction	Treatment
Corporate profit tax	Profit earned from permitted business activities carried out within the FIZ is exempt from profit tax. The exemption also covers distributions and certain expenses or payments connected with those activities.
VAT on foreign goods entering the FIZ	No import VAT is payable merely because foreign goods are brought into the zone, since the goods are not released for free circulation in Georgia.
Transactions within the FIZ	Transactions carried out within the zone are generally exempt from VAT, subject to the detailed rules of the Tax Code.
Property tax	Property located within the FIZ is exempt from property tax.
Import tax on foreign goods entering the FIZ	Foreign goods may enter the zone without payment of import tax or the application of trade-protection measures.
Goods manufactured in the FIZ and brought into the rest of Georgia	The goods are exempt from import tax, provided they meet the criteria for being treated as manufactured in the FIZ. However, import VAT generally applies when they are released into the rest of Georgia.
Dividends	Dividends received from a FIZ enterprise are not taxed at source and are not included in the recipient’s gross income.
Interest	Interest received from a FIZ enterprise is not taxed at source and is not included in the recipient’s gross income.
Employee salaries	Employment income is not exempt. Where the Tax Code does not require the FIZ enterprise to withhold tax, the employee must declare and pay the applicable personal income tax under the prescribed procedure.

Movement of goods

Bringing Georgian goods into a FIZ is treated in the same way as placing goods under an export procedure. As a result, those goods generally lose their status as Georgian goods and acquire the customs status of foreign goods.

Taking goods from a FIZ directly to a destination outside Georgia is treated as an export or re-export, depending on the origin and customs status of the goods.

Goods brought from a FIZ into the rest of Georgia are generally treated as foreign goods unless their Georgian customs status can be established. The applicable import formalities and taxes must therefore be considered when the goods leave the zone for the Georgian market.

The 4% payment on supplies to the Georgian market

The FIZ regime is principally designed for activities carried out within the zone and for transactions connected with international markets. Supplies to the Georgian domestic market are possible, but they may trigger additional tax and customs obligations.

The 4% payment

When a FIZ enterprise supplies goods to a person registered under Georgian law that is not another FIZ enterprise, the FIZ enterprise must pay 4% of the consideration received or receivable from the supply.

If the goods are supplied free of charge, the 4% payment is calculated on their market value.

Supplies between FIZ enterprises are not subject to this 4% payment.

Import VAT on goods manufactured in the FIZ

When goods manufactured within a FIZ are brought into the rest of Georgia:

• they may be exempt from import tax, provided they satisfy the applicable criteria for being treated as manufactured in the FIZ; but
• import VAT applies when the goods are released for free circulation in Georgia.

The VAT calculation may depend on the customs value, purchase price and structure of the transaction. The 4% payment and import VAT are separate obligations and may both need to be considered in the same transaction.

The treatment should be confirmed with the Revenue Service based on the goods, their origin, the contractual structure and the identity of the purchaser.

Permitted and prohibited activities

As a general rule, a FIZ enterprise may manufacture or process goods and provide services within the zone, subject to the restrictions established by law and any licensing or regulatory requirements that remain applicable.

Certificates of origin

The Revenue Service may issue a certificate of Georgian origin for goods produced within a FIZ where the goods satisfy the applicable Georgian rules of origin.

The fact that goods were produced or processed inside a FIZ does not, by itself, automatically establish Georgian origin. The nature and extent of the production or processing must meet the relevant origin criteria.

Prohibited activities

The following activities are prohibited within a FIZ:

• manufacturing or trading in arms and ammunition;
• manufacturing or trading in nuclear or radioactive substances;
• bringing into the zone, storing, manufacturing or selling narcotic or psychotropic substances; and
• bringing into the zone, storing, manufacturing or selling tobacco products or tobacco raw materials.

Tobacco products and tobacco raw materials may be brought into a FIZ for consumption within the zone. However, bringing them into the zone for this purpose is not treated as an export.

Additional restrictions

The legislation may establish further prohibitions or restrictions for particular activities. However, only restrictions introduced before the establishment of the relevant FIZ apply to that zone.

Buildings located within a FIZ may not be used for residential purposes.

Who the FIZ regime suits

The FIZ regime is generally best suited to businesses engaged in the manufacture, processing, assembly, storage, trading or re-export of physical goods, particularly where operations involve significant cross-border movement.

It may work well where:

• raw materials or other inputs are imported into the FIZ and the finished goods are exported abroad;
• goods move primarily between FIZ enterprises or are supplied to foreign customers;
• most business activities are physically carried out within the zone;
• the company can comply with the customs-control, reporting and operational requirements of the FIZ; and
• the business can commit to the premises, licence, lease and service conditions imposed by the relevant zone administrator.

Foreign goods may generally enter the FIZ without import tax or import VAT becoming payable merely on entry. Finished goods exported directly from the zone may also leave without entering Georgia’s domestic market, although customs formalities and destination-country taxes still apply.

Service businesses

Service activities may also be conducted within a FIZ, but the Tax Code imposes important restrictions:

• a FIZ enterprise generally cannot provide services to a person registered under Georgian law that is not another FIZ enterprise;
• it may purchase services from Georgian-registered persons only within the categories expressly permitted by the Tax Code or the Government; and
• services supplied to non-residents should fall within the categories recognised as permitted FIZ activities.

The regime may therefore suit certain internationally focused service providers, but the proposed services and the location and identity of the clients must be reviewed carefully.

When the regime may be unsuitable

A FIZ structure is generally less suitable where:

• most goods will be sold to customers in the Georgian domestic market;
• the company will provide services primarily to Georgian businesses;
• the company will regularly purchase goods or non-permitted services from Georgian suppliers;
• the operation does not require physical premises or customs infrastructure; or
• the zone’s lease, licence and administrative costs outweigh the tax savings.

Supplies of goods to Georgian-registered persons outside the FIZ may trigger the 4% payment. Goods manufactured in the zone and brought into the rest of Georgia may also be subject to import VAT. By contrast, providing services to Georgian-registered persons outside the FIZ is generally prohibited rather than merely taxed.

For a wider comparison, see Business statuses in Georgia and Corporate profit tax in Georgia.

Operating Free Industrial Zones

As of August 2026, Georgia has four operating Free Industrial Zones:

• Tbilisi Free Zone — located in Tbilisi and operated by JSC Tbilisi Free Zone;
• Kutaisi Free Zone — located at the former Kutaisi automobile plant and operated by Georgian International Holding;
• Hualing Kutaisi Free Industrial Zone — located near Kutaisi International Airport and operated by the Hualing Group; and
• Poti Free Industrial Zone — located in the Black Sea port city of Poti and operated by Rakia Georgia FIZ LLC.

All four zones are operated by private companies. Each operator establishes its own commercial terms concerning:

• admission to the zone;
• activity licences;
• office, warehouse, production or land leases;
• minimum space or operational commitments;
• administrative and service fees;
• utilities and infrastructure; and
• supporting documentation and onboarding procedures.

A prospective FIZ enterprise should therefore contact the chosen operator directly to confirm whether its proposed activity will be accepted and to obtain current commercial terms. Company registration and tax/customs registration remain subject to the applicable procedures before the Public Registry, Revenue Service and other competent authorities.

Because availability, fees and lease conditions may change, this guide does not quote operator pricing.

Zones under development

Other FIZs have been legally established but are not included in the above list of operating zones. In particular, the legislation provides for:

• GIG Free Industrial Zone in Kutaisi, scheduled to begin operating no later than 1 December 2026; and
• Sagarejo Free Industrial Zone, scheduled to begin operating no later than 1 March 2027.

How to establish a FIZ enterprise

The exact procedure varies between zone operators, but it generally involves the following steps.

1. Select the appropriate zone

Compare the operating zones based on:

• location and access to ports, airports, roads and railways;
• available office, warehouse, production or land space;
• permitted and accepted activities;
• customs infrastructure;
• lease, licence and service fees; and
• minimum operational commitments.

2. Obtain preliminary approval from the operator

Submit details of the proposed business activity, ownership structure and space requirements to the selected FIZ operator.

The operator will determine whether the activity is acceptable and provide its commercial and onboarding conditions.

3. Secure an address or premises inside the FIZ

Conclude the required lease, space-allocation or service agreement, or obtain the operator’s written consent to use an address within the zone.

A FIZ enterprise must be registered at an address located inside the relevant FIZ.

4. Register the company

Register the enterprise under Georgian company law, using its address within the FIZ. The ordinary company-registration requirements continue to apply.

See Registering a company in Georgia for the general incorporation framework.

5. Obtain FIZ enterprise status

Register the company as a FIZ enterprise taxpayer and obtain formal recognition of its FIZ status under the procedure established by the Ministry of Finance.

Depending on the zone’s arrangements, the operator or the zone’s one-stop service may assist with or process this stage under delegated authority.

6. Obtain the required activity licence

Complete the operator’s licensing or authorisation process for the proposed activity. Any additional statutory licences or permits that remain applicable must also be obtained.

7. Begin operations

Once registration, status activation, premises and licensing requirements are complete, the enterprise may begin operating under:

• Georgian tax and customs legislation;
• the charter and internal rules of the relevant FIZ;
• its agreements with the operator; and
• any applicable customs-control and reporting procedures.

The precise documents, order of steps, processing time and fees should be confirmed directly with the chosen zone before starting the registration process.

Limits to keep in mind

• The exemptions are activity-specific. Tax benefits apply to permitted business activities carried out within the FIZ. Activities outside the zone or outside the permitted scope may fall under the ordinary tax rules and may also affect the company’s compliance with FIZ requirements.
• Domestic sales create additional liabilities. When a FIZ enterprise supplies goods to a Georgian-registered person that is not another FIZ enterprise, it must generally pay 4% of the consideration received or receivable. Goods manufactured in the zone and brought into the rest of Georgia may also be subject to import VAT.
• Purchases of Georgian goods may also trigger the 4% payment. When a Georgian-registered person that is not a FIZ enterprise supplies goods to a FIZ enterprise, the FIZ enterprise must generally pay 4% of the goods’ market value. Electricity, water and natural gas intended for consumption or production within the zone are excluded from this rule.
• Domestic service transactions are restricted. A FIZ enterprise generally cannot provide services to Georgian-registered persons outside the FIZ. It may purchase services from Georgian businesses only in the categories expressly permitted by the Tax Code or the Government.
• Employee salaries remain taxable. The FIZ regime does not provide a general personal income-tax exemption for employees. Where tax is not withheld by the FIZ enterprise, the employee must declare and pay the applicable tax under the prescribed procedure.
• The zone’s term matters. A FIZ may be liquidated when its established term expires, at the organiser’s request, or by a court decision following an application by the Government. The remaining term and the consequences of early liquidation should be considered before entering into a long-term lease or making substantial infrastructure investments.
• The regime is non-residential. Buildings within a FIZ cannot be used for residential purposes.
• The regime is primarily internationally oriented. Although both goods and services may be permitted, the structure is generally more suitable for production, processing, logistics, international trade and approved services supplied to foreign clients than for businesses focused on the Georgian domestic market.
• Operator costs still apply. Tax exemptions do not eliminate lease payments, annual licences, administrative charges, utilities, customs-compliance costs, accounting obligations or other fees imposed by the relevant zone operator or Georgian law.

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.