Georgia's free industrial zones are territories with zero profit tax, no VAT, no property tax and no import or export duties. It sounds like a dream, but the regime has a firm logic: it was built for manufacturing and trade in goods, not for freelancers, property investors or apartment owners. Here is who a FIZ actually suits and why rental income cannot be moved into one.
- Three working zones: Poti (since 2008, 300 ha, over 100 companies), Tbilisi (since 2015, about 17 ha, around 150 companies), Hualing Kutaisi (since 2015, 36 ha).
- Exemption from profit tax, dividend tax, VAT, property tax and customs duties.
- The one material tax is 4% on transactions between the zone and the rest of Georgia.
- This is a regime for goods businesses: manufacturing, warehousing, logistics, re-export.
- An apartment and its rental income cannot be brought into a FIZ — they are different worlds.
What a FIZ is
A free industrial zone is a fenced territory with a special tax and customs regime. A company registered in the zone operates inside it and is, in effect, outside the country's ordinary tax perimeter.
The point of the mechanism is to attract manufacturing, processing and transit trade: goods come in, are processed or stored, and move on without creating a tax burden inside Georgia.
Which zones operate
Poti
The country's oldest and largest zone, next to the Black Sea port. The logical choice for anything tied to sea logistics, warehousing and re-export.
Tbilisi
A compact zone near the airport and the city, with access to the capital's labour pool. Suited to light manufacturing and businesses that need proximity to staff and air connections.
Hualing Kutaisi
A zone developed by the Hualing Group with government support. In Kutaisi there is neither a minimum investment nor minimum capital required to begin operations.
The tax regime
| Tax | In a FIZ |
|---|---|
| Corporate profit tax (standard rate 15%) | 0% |
| Dividend tax (normally 5%) | 0% |
| VAT | not applied to operations within the regime |
| Property tax | 0% |
| Import and export duties | 0% |
| Transactions with the rest of Georgia | 4% |
That last line is the key one. The zero rate works while the business faces outward: goods in, processed, goods out. As soon as you start selling into the Georgian domestic market, the 4% applies to those transactions and the economics change.
Who it suits
- Manufacturing and assembly: components in, finished product exported.
- Warehousing and re-export, especially in Poti with its port location.
- Processing followed by export.
- Companies with physical goods flows for which customs duties and VAT are a noticeable part of the cost base.
Who it does not suit
It is worth being direct here, because FIZs are often marketed as a universal "zero tax scheme".
| Situation | Why a FIZ is not the answer |
|---|---|
| Freelancing and services for foreign clients | The regime is built for goods businesses inside the zone; for services the 1% small business status is simpler and cheaper |
| Renting out an apartment | Rental income arises outside the zone and is taxed under its own rules |
| Selling your own property | The two-year ownership rule applies, not the FIZ regime |
| Local trade and services inside Georgia | Transactions with the rest of the country carry 4% and the advantage melts away |
For services and freelancing the sensible alternative is small business status at 1%, layered on top of an individual entrepreneur. It is cheaper, faster and requires no presence in an industrial zone.
FIZs and property
The most common misconception goes like this: "I will register a company in a free zone and rent out my apartment through it tax-free." It does not work, for three reasons.
- Territory. The relief is tied to activity inside the zone, and your apartment sits in an ordinary city.
- Nature of the income. Rental income is Georgian-source and taxed under its own rules — residential rent at the reduced 5% with no deductions, or 20% on net income through an IE; see renting out.
- Sale. Selling an apartment is governed by the two-year ownership rule — details in selling an apartment.
Property inside the zones themselves is industrial and warehouse space, not housing: it is leased for production rather than bought to live in or flipped like apartments.
What to choose instead
| Your situation | Sensible regime |
|---|---|
| Freelance, IT, services for foreign clients | IE plus small business status, 1% of turnover |
| Renting out an apartment | The ordinary rules for rental income |
| Manufacturing and exporting goods | A FIZ — this is where the regime genuinely works |
| Trading inside Georgia | An ordinary company; in a FIZ the benefit is eaten by the 4% |
If you are relocating a business and choosing a home at the same time, it helps to look at both together: prices and the structure of supply by district are on the district pages, shortlisting is in the sale search, and where you end up a tax resident is in tax residency.