Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Investment Climate & Gambling Business Opportunities in Georgia Georgian National Investment Agency (GNIA) 2015 Georgia - Country Overview Area: 69,700 sq km GDP 2014 (est): USD 16.9 bln Population: 4.5 mln GDP real growth rate 2014 (est): 4.7% Life expectancy: 75 years GDP CAGR 09 -14 (USD) (est): 5.6% Official language: Georgian GDP per capita 2014(est): US$ 3763 Literacy: 100% Inflation rate 2014 : 3.1% Capital: Tbilisi Currency (code): Lari (GEL) Total Public Debt to Nominal GDP (%) 2014 (est): 34.6% www.investingeorgia.org 2 Advantages of Investment Climate in Georgia A politically stable investment destination Efficient, pro-business and corruption-free government Enlargement of market size by Free Trade Agreements Competitive cost of labor and energy Entry gate in the region Solid sovereign balance sheet Stable banking sector Very low crime-rate BB- Stable www.investingeorgia.org BB- Positive Ba3 Positive 3 Doing Business in Georgia Country's impressive progress in improving business climate has been well documented in a number of international indices. Ease of Doing Business Singapore 1 United States 7 United Kingdom 8 GEORGIA Index Of Economic Freedom Up from 112 in 2005 15 Latvia Netherlands Bulgaria Armenia Turkey Russia 23 27 38 45 55 62 Azerbaijan China Ukraine Source: World Bank, DB 2015 (Rank out of 189 countries) www.investingeorgia.org 80 90 96 Hong Kong United States United Kingdom Germany GEORGIA Sweden Armenia Kazakhstan Turkey France Azerbaijan China Russia Ukraine 1 12 13 16 22 23 Up from 99 in 2005 52 69 70 73 85 139 143 162 Source: The Heritage Foundation, 2015 (Rank out of 178 countries) 4 Corruption Free Country Georgia is considered as essentially a corruption-free investment destination Global Corruption Barometer GEORGIA Denmark Hungary 0% 1% Norway 1% Korea (South) 1% Hungary 1% Canada 2% Switzerland 2% UK Percentage of users paying a bribe to tax authorities in the past year 9% Armenia 9% Ukraine 2% Norway 2% Korea (South) 2% Canada 2% UK United States Turkey GEORGIA GEORGIA Denmark Switzerland 4% United States Armenia Turkey 15% 18% 1% Ukraine 2% Percentage of users paying a bribe in registry and permit services 5% 11% 14% 16% 20% 22% Source: Transparency International 2013 (GLOBAL CORRUPTION BAROMETER) www.investingeorgia.org 5 Economic Structure and Trends Rapidly growing GDP per capita GDP: Strong rebound after a relatively small contraction in 2009 Nominal GDP (US$bln) 18 16 14 12 10 8 6 4 2 0 12.3% 9.6% 9.4% 5.9% 5.1 6.4 7.8 12.8 Real GDP growth, y-o-y (%) 16.9 15.8 16.1 14.4 10.2 2.3% 10.8 11 7.2% -3.8% 6.3% 3.2% 4.7% 6.2% 12.0% 7.0% 2.0% -3.0% -8.0% 4000 3500 3000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 E 2921 2315 1188 1484 3231 2455 2623 1764 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 E Source: Geostat, MOF Source: Geostat, MOF Favorable public debt situation Broad-based and diversified nominal GDP structure in 2013 Health and social work 6% Agriculture, forestry and fishing 9% Other sectors 12% Total Public Debt to Nominal GDP (%) 70% Industry 17% Education 5% 60% 40% Construction 7% Financial intermediation 3% Transport and Communication 11% www.investingeorgia.org Hotels and restaurants 3% Trade 17% 30% 20% 10% External Public Debt to Nominal GDP (%) 63.2% 50.5% 50% Public administration 10% 3763 3523 3600 41.0% 42.4% 40.0% 32.0% 44.9% 25.5% 31.2% 34.5% 26.8% 21.1% 23.5% 36.5% 34.9% 34.7% 31.7% 33.6% 28.8% 27.6% 27.2% 16.8% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Geostat, MOF Source: Geostat, MOF 6 Liberal Trade Regimes • Very simple and service oriented customs policy and administration – customs clearance in 15 minutes • ~80% of goods free from import tariffs • No quantitative restrictions Preferential Trade Regimes: • FTA with CIS countries and Turkey • DCFTA (Deep and Comprehensive Free Trade Agreement ) with EU was singed on June 27, 2014 • GSP agreement with USA, Norway, Switzerland, Canada, Japan • Member of WTO Duty free access to ~0.9 billion market provided by FTAs and DCFTA www.investingeorgia.org 7 Taxation - simple, low, efficient and fair Before Number of Taxes Current Change year No payroll tax or social insurance tax No capital gains tax 21 6 2005-2007 VAT 20% 18% 2005 Personal Income Tax 1220% 20% Social Tax 33% - Corporate Profit Tax 20% 15% 2004 - 2009 Personal income tax for interest, dividend, royalty – 5% Foreign-source income of individuals fully exempted Accelerated depreciation on capital assets 2008 Customs/ import Tax 0%, 5% or 12% Excise Tax Depends on goods Property Tax Up to 1% www.investingeorgia.org No wealth tax and inheritance tax Loss carry forward for corporate profit tax purposes (10 years) No restrictions on currency convertibility or repatriation of capital & profit Double taxation avoidance treaties with 47 countries 8 Leader in Forbes rating (Tax Misery & Reform Index) According to the latest Tax Misery & Reform Index, released by Forbes Business & Financial News, Georgia is the fourth least tax burden country after Qatar, UAE and Hong Kong www.investingeorgia.org 9 Georgia is expecting significant growth trajectory in tourist arrivals Number of international visitors has been growing rapidly +22% 5.4 4.4 +56% 2.8 +38% 2.0 0.6 2005 1 2006 1.1 1.3 1.5 2007 2008 2009 2010 2011 2012 2013 Source: Georgian National Tourism Administration www.investingeorgia.org 10 Hospitality - Fast Growing Sector Fast growing sector • Tourism contributed 6.5% of GDP in 2013. • Number of visitors increased by 38% reaching • • • 2.8 million in 2011 and by 56% in 2012 reaching 4.4 million. Georgia had 22% more visitors in 2013 reaching 5.4 million. Number of international arrivals reached 4 657 525 mln during the first 10 months of 2014. (2% increase compared to the same period of the last year). Majority of tourists come from: Turkey (30%), Armenia (23%), Azerbaijan (19%), Russia (14%), Ukraine (2%). Tourist number of international visitors from Europe increased by 3 % in 2014 Average duration of stay - 5 nights, average spend - USD 650 Potential • European Youth Olympic Festival 2015; UEFA Super Cup 2015. • UNESCO heritage sites; 8 national parks • Curative climate; mineral waters; • According the IUCN criteria there are 84 different categories of Protected Areas(Total area – 520 811 ha; 7,47% of the country’s territory) Source-Georgian National Tourism Administration www.investingeorgia.org 11 More international luxury hotel chains are coming to the market… Existing Hotel Chains (8 pipeline hotel projects in Tbilisi) With the growth of tourists the demand for hotel rooms has been growing in the last years in Georgia, which has stimulated investments in the hotel sector. Average occupancy rate of international brand hotels in Tbilisi Reached to 80% in 2013 , Tbilisi hotel market is expected growth this year of an estimated 83%; Supply of the rooms increased, but still there is a huge capacity for development of Hotel Industry. Upcoming international hotel brands in Georgia Batumi Tbilisi Batumi Tbilisi Batumi Tbilisi Tbilisi/Li kani Source: TBSC Consulting www.investingeorgia.org 12 Investment opportunities in Hospitality & Real Estate “Sun-beach” resorts 1 Expansion of summer ”sun and beach” franchise focusing on highend segment Description All inclusive summer resorts New master resort development Potential location Batumi Anaklia Kobuleti Other Black Sea locations www.investingeorgia.org Winter ski resorts 2 Master development of winter resorts with unique profile equivalent to the Alps Government is fully committed to provision of basic infrastructure Mestia Gudauri Bakuriani Goderdzi Summer mountains resorts Spa Resorts 4 3 Four season resort value preposition Development of Spa Resorts Majestic landscapes allow for a wide range of tourism activities such as camping, climbing, rafting, fishing, hunting etc. Include hotels, different types of clinics, fitness, outdoor activities Gambling 5 Development of large-scale integrated casino complex to Serve regional markets. Include hotels, casino entertainment, family Services and shopping Fiscal incentives available Mestia Gudauri Bakuriani Goderdzi Kazbegi Other locations Tskhaltubo Akhtala Other locations Batumi Tbilisi Other locations 13 Map of Regional Countries Fully of Partially Banning Gambling Activities • Legislation in surrounding • • • countries prevents people from enjoying gambling facilities, but Georgia will provide them with high quality gambling experience similar to world class gambling destination as Las Vegas or Monte Carlo Countries where gambling is completely or partially prohibited: Russia, Turkey, Azerbaijan, Iran, Israel, Kazakhstan, Saudi Arabia etc. Easy access by Land, Sea and Air makes Georgia attractive gambling destination for all above countries and beyond. Gambling business is fully decriminalized. www.investingeorgia.org 14 Gambling Business in Georgia • There are couple of choices for starting Gambling Business in Georgia: • Casino Slot Machines Table Games Bookmaker Bingo Lotto Promotional Drawing Game Georgia Revenue Service (Tax and Customs Administration of Georgia) is responsible for issuing permits, regulation and supervision of gambling business 15 Casino Fees Annual fees: • 5 000 000 GEL (with exceptions) • These exceptions vary according to the location of the company: Batumi, Kobuleti, Borjomi, Bazaleti Lake, Gurjaani district, vill. Katchreti – 250 000 GEL Akhaltsikhe – 100 000 GEL Some of the regions are totally exempt from annual state fees: Gudauri, Khazbegi, Bakuriani, Sighnagi and Tskaltubo – are totally exempt from annual fees with no conditions Batumi, Kobuleti, Khelvachauri, Anaklia and Ganmukhuri are exempt from an annual fee on a condition that the casino will operate in newly opened 100 or 80 room hotel Quarterly fees: • For each Casino Table - 15 000 - 30 000 GEL (Tournaments tables are not subject to quarterly fees ) www.investingeorgia.org 16 Casino Fee Payment Map Exempt from annual fee + 100 Room Hotel Exempt from annual fee + 80 Room Hotel Exempt from annual fee with no conditions 250000 GEL annual fee 100000 GEL annual fee www.investingeorgia.org 17 Other Gainful Games Fees Slot Machines Annual State Fees: 50 000 – 1 000 000 GEL (Tbilisi – 1 000 000 GEL) In case of locating slot machine club within Casino in Tbilisi: 100 000 GEL Quarterly Fees: For each Slot Machine: 1500 – 3000 GEL Table Games Annual state fees: Only Casino permit and gaming machine permit holders are allowed to open table gaming club Casino Permit holders are allowed to open 3 Gaming Clubs in any part of Georgia for free Gaming Machine Permit holders are allowed to open 1 Gaming Club in any part of Georgia for free Each following Gaming Club: 10 000 – 50 000 GEL Quarterly fees: For each Table in Table Game: 3 000 – 10 000 GEL Bookmaker Annual state fees: 30 000 - 300 000 GEL Quarterly fees: Free Bingo/Lotto Annual state fees: 15 000 GEL Quarterly fees: Free Promotional Drawing Game Annual fees: 15 000 GEL Quarterly fees: 10% of Prize Fund 18 Land Based Gambling and Gainful Games Taxing • Casino Personal income tax (salaries) – 20%; Property tax – up to 1%; Corporate Income Tax– 15%; W/H - only during tournament – 20%; • Slot Machines • Table Games • Personal income tax (salaries)– 20%; withholding liability- only during tournament – 20%; Property tax – up to 1%; Bookmaker • Personal income tax (salaries)– 20%; Property tax – up to 1%; Personal income tax (salaries) – 20%; Property tax – up to 1%; Bingo/Lotto Personal income tax (salaries)– 20%; Corporate Income Tax– 15%; withholding liability – 20%; Property tax – up to 1%; • Promotional Drawing Game Personal income tax (salaries) – 20%; Corporate Income Tax– 15%; withholding liability – 20%; Property tax – up to 1%; www.investingeorgia.org 19 iGaming Permits • iGaming permit is only issued to the land-based permit holders (of Georgia). • Gambling and gainful games may be arranged by internet for: • A company in Georgia is prohibited from providing iGaming services to an offshore company • iGaming permit holders pay quarterly fees. Quarterly fees are determined by Local Administrations, which vary from 30000 to 60000 GEL Casino Slot machines Bookmaker Promotional Drawing Game www.investingeorgia.org 20 iGaming Taxation • Casino Personal income tax (salaries)– 20%, Corporate Income Tax – 15%, property tax – up to 1%, withholding liability– only during tournament -20% • Slot Machines Personal income tax (salaries) – 20%, Corporate Income Tax – 15%, Property tax – up to 1%. • Bookmakers • 5% of the turnover (gross revenue). Personal income tax (salaries) –20%; property tax–up to 1%. Promotional Drawing Game personal income tax (salaries)– 20%; property tax – up to 1%, Corporate Income Tax– 15%; withholding liability - 20% www.investingeorgia.org 21 GEORGIAN NATIONAL INVESTMENT AGENCY • STATE AGENCY – Promoting Georgia internationally Investors – Supporting foreign investments and investors before, during & after investment process • “One-stop-shop” for investors Local Companies GNIA Government • Moderator between Investors, Government and Local Companies Mission - Attracting Greenfield and M&A Investments www.investingeorgia.org 22 WHAT YOU CAN GET FROM GNIA • INFORMATION - General data, statistics, sector researches • COMMUNICATION - Access to Government at all levels/Local partners • Organization of site visits & Accompanying investors • AFTER CARE - Legal advising & Supporting services www.investingeorgia.org 23 www.investingeorgia.org GEORGIAN NATIONAL INVESTMENT AGENCY 7 Bambis Rigi, Business Center Mantashevi, II floor 0105, Tbilisi, Georgia Tel: (+995 32) 2 473 696 E-mail: [email protected] 24