In the modern world for human resource specialists and CEOs’ one of the biggest deals is to create an appropriate environment for staff to keep them creative and productive. When they work in offices or do some physical work, they need to be fed fine to keep productivity during their working hours. In Georgia most of the companies don’t take this responsibility and the government doesn’t have any promotion on this issue. Even more, companies that give meals to their employees, have to pay the VAT, which is one more reason to avoid feeding their employees.
Despite that it’s not very popular in Georgia to provide meals for the employees there are some companies which offer this kind of service. Food Management Group is among them operating in Georgia since 2012. For now the company unites more than 100 employees and takes one of the leading positions in the field. Food management group provides several services, like Cafeteria management, Lunchbox system and buffet.
According to the quantity of employees they offer delivery service of prepared food or cooking on the place. As the top manager of the company mentioned in the interview with BUSINESS GEORGIA that the recipe of their success is high quality of products and services, which they are keeping for years. “We always have fresh commodity and try our best to meet the highest standards in our field. “
How did you get the idea of doing this business?
About ten years ago the company where my wife used to work was rejected in the last minute to be served by one of the catering companies. She was stressed, couldn’t find another company so fast. It was first time I provided the lunch for one of the leading insurance company in Georgia, of course without any refund. After that I started thinking about this gap. This made me inspired and I started providing lunches for other companies. First time I used to make food at home and offer it to small companies. But from time to time the demand has increased. Then I started offering this service to bigger companies and established the enterprise in 2012. For now our business unites about 100 employees and we provide service for some leading companies.
What motivates you to do this work for years?
The main motivation for me is that we created an opportunity for people to eat healthy and balanced food during working hours. The practice of our country is to eat fast food during the day because healthy food costs too much if you don’t cook by yourself. We are proud that we took this gap many years ago. Another thing that motivates us is that we try our best to set up the practice that companies should pay for the food of their employees.
What kind of challenges do you see in your field for now?
The biggest challenge is the preservation of prices and quality. That means to offer balanced food (balanced meals include one food from each food group – Dairy; Vegetables; Fruits; Grains and Protein.) with affordable price.
On June 4th the 3rd Tourism and Hospitality Conference within Welcome to Georgia! National Tourism Awards was held at the Biltmore Hotel Tbilisi.
The Conference was opened by Co-Founder/Managing Partner of the Project, Maryna Chayka. She welcomed guests and promised very interesting competition year for Nominees of the Welcome to Georgia! National Tourism Awards 2018. The first Vice Prime Minister/Minister of Economy and Sustainable Development of Georgia Dimitry Kumsishvili, CEO of Partnership Fund Davit Saganelidze, head of Georgian National Tourism Administration George Chogovadze also addressed the guests with the welcome speeches. They spoke about the importance of tourism for the development of our country, in general, as well as for Tbilisi, as one of the major tourist destination in the country, and emphasized the role of each company in contributing to this field.
During panel discussions, the representatives of government and private sector discussed the challenges and opportunities in tourism and hospitality industry, top market suppliers and field experts made presentations on international standards and safety for hospitality industry, and on the importance of digital marketing in tourism. Even more, the organizers of the Welcome to Georgia! National Tourism Awards introduced to the guests new Jury Board, new categories and a lot of other interesting news about the Project. The participants of the Conference had an opportunity to arrange B2B meetings with each other to communicate and to establish useful business connections
More than 350 representatives of respective industry, government officials, international and local experts and media were attending the 3rd Tourism and Hospitality Conference.
The Tourism and Hospitality Conference within Welcome to Georgia! National Tourism Awards Project is an annual business event held in Georgia since 2016 and is unique business platform, where different companies and organizations have an opportunity to exchange information, communicate and catch up with the latest trends and challenges in the spheres of tourism and hospitality, and in Georgian business industry in general.
Project supported by: the Ministry of Economy and Sustainable Development of Georgia, Tbilisi City Hall and Partnership Fund, Co-organizers: Georgian National Tourism Administration and Bank of Georgia. Project’s Independent Auditor – “BDO in Georgia”, General Sponsor – Alliance Group. BUSINESS GEORGIA is a media partner since the establishment of the project.
For more detailed information about the Project, please visit website www.awards-tourism.com
STYX a tech company from Georgia won Seedstars startup competition on May 29. Ten best startups from Tbilisi were invited to pitch in front of an investment panel and compete to be crowned the most promising seed-stage startup of Seedstars Tbilisi 2018 in Tech Park.
STYX is a tech-enabled logistic company that instantly connects shippers with carriers via mobile app and SAAS platform. “We found the way that help carriers grow their businesses on their own terms. Shippers do not get inflated prices and can track their freight 24/7”. Using STYX website and app is free for everyone, company only charges carriers when they earn money.
STYX does not participate in pricing. The startup will join the global Seedstars Family and take part in the regional and global Seedstars Summits that include our tried and tested bootcamp and investor forum. It’s a catalytic platform for high growth emerging market startups.
Mydoc.chat and gamasin.ge took third and second places respectively.
BUSINESS GEORGIA is a media partner of Seedstars startup competition.
According to the Doing Business Report commissioned by the World Bank,Georgia ranks 9th in the world in 2018 by ease of doing business. Moreover, Georgia is a country with the fourth smallest tax burden in the world, according to the Tax Misery Index Ranking by the Forbes Magazine, which is perfect rating for developing country.
The Government of Georgia is dedicated to a fair and transparent tax environment, protection of business interests and reliable tax administration system which is collected on both state and local levels here.
The country has only six taxes of which five (personal income tax, corporate income tax, Value added tax, excise tax and import tax) are on the national level and one – property tax is a local tax. Personal income tax, dividend and royalty is 5% and the most important, the country doesn’t have payroll, social security, capital gains, wealth or inheritance tax.
According to the Economic Liberty Act, Government is not allowed to increase national tax rates (except excise tax) or number of taxes without national referendum.
As for the individuals who are just starting economic activities in Georgia, they are required to register with the GTA prior to their start-up and obtain a Tax ID. Georgian citizen non-entrepreneur individuals may use a Personal ID and foreign citizen non-entrepreneur individuals have to register with the GTA prior to filing their annual personal income tax returns and obtain a Tax ID.
According to Tax Code of Georgia, if a company produces goods intended for export market, it can apply for a license about “Internal Processing Regime” to the Ministry of Finance. This license will grant the company a right to import raw materials without paying import/customs tax and VAT on these materials.
Furthermore, the Tax Code of Georgia gives an opportunity to the companies to use accelerated depreciation on capital assets (including full deduction during first year) and loss carry forward for corporate profit tax purposes (10 years).
Nowadays, Georgia has Double Taxation Avoidance Treaties with 52 countries and there’s no restrictions on currency convertibility or repatriation of capital and profit.
According to Global Corruption Barometer of Transparency International, 0% of interviewed reported paying bribe to the tax administration and World Economic Forum’s Global Competitiveness Report named Georgia among low tax rate countries, this information with all the above-mentioned data emphasize the simplicity and reliability of Georgian tax system for any interested person.
Author: Tamar Devdariani © BUSINESS GEORGIA
The number of trade partners of Georgia has increased during the past decade which mostly was the result of signing an Association Agreement between the EU and Georgia on 27 June 2014. This agreement has entered into force since 1 July 2016 and today the EU is the main trade partner of Georgia.
The agreement introduced a preferential trade regime (Deep and Comprehensive Free Trade Area), which based on having better-matched regulations, increases market access between the EU and Georgia. It’s also noteworthy that Georgia has been a member of the World Trade Organization since 2000.
According to World’s Top Exports, Georgia shipped US$2.3 billion worth of products around the globe in 2017. The exact list showcasing 15 of Georgia’s top trading partner countries that imported the most Georgian shipments by dollar value during 2017 looks like this:
- Russia: US$368.1 million (15.9% of total Georgian exports)
- Turkey: $202.5 million (8.7%)
- China: $191.6 million (8.3%)
- Bulgaria: $173.2 million (7.5%)
- Armenia: $153.5 million (6.6%)
- Azerbaijan: $124.3 million (5.4%)
- United States: $119.6 million (5.2%)
- Ukraine: $90.8 million (3.9%)
- Romania: $88.8 million (3.8%)
- Italy: $65.7 million (2.8%)
- Switzerland: $60.1 million (2.6%)
- Spain: $58.9 million (2.5%)
- Uzbekistan: $58.7 million (2.5%)
- Iran: $58.2 million (2.5%)
- Belarus: $47.4 million (2%)
Around 29% of Georgia’s trade takes place with the EU. As for EU export to Georgia, after the information given by European Commission, it is amounted to €1.96 billion in 2016. The key export products are mineral products, machinery and appliances, chemical products and transport equipment.
Georgia’s main imports are oil, motor cars, pharmaceutical products, wheat and meslin, sugar and electrical equipment. The list of main import partners includes – Russia, Turkey, Ukraine, Azerbaijan, Germany, USA and so.
On January 1, 2008, Georgia signed Free Trade Agreement with China too and became the first country from Caucasus region to have such a deal with it. According to this agreement – honey, wine, tea, mineral water, vegetables and other agricultural products will be exported to China with zero tariffs and without any more custom fees or transition period.
But this is not a first time when two countries forged strong ties. Following the information given by Georgian National Wine Agency, our wine was the most wanted export product lately and around 7,585,407 bottles of Georgian wine were exported to China last year. In general, exactly this country takes third place as the largest importer of Georgian wine.
The DCFTA and Free Trade Agreement with China allows Georgian trade-related laws to generally match internationally legal frameworks. Georgia’s adoption of leading trade countries’ approaches to policy-making will improve governance, strengthen the rule of law and offer more economic opportunities by expanding our marker. That will also attract foreign investments to Georgia.
Author: Tamar Devdariani © BUSINESS GEORGIA
Georgia became startup-friendly country especially after the opening of the First Technology Park in 2016, Tbilisi. Tech Park started providing young creators with high quality equipment and great possibilities to turn their ideas into reality and it gave a big stimulus to young people to develop their businesses and contacts with potential investors.
In 2016, newly started project Start-up Georgia attracted 726 applicants from different regions of Georgia. 146 applicants were regarded as high technology business ideas and 580 were submitted as creative and innovative ideas. These entrepreneurs got great financial and theoretical support for developing their businesses.
Eight lucky winners of these startups became even globally known after presenting their innovative projects in front of 50 American investors in Silicon Valley, in 2017. Georgian start-ups also received specially organized training from local experts and attended special event dedicated to our country too.
Setting up a business in Georgia is a straightforward process and it creates even more business-friendly atmosphere for newcomers. The system is very efficient because it is based on promotion of the establishment of new enterprises.
For registration any start-up or firm must follow these 3 stages in Georgia: 1) Pay the registration fee – 100 GEL but if it’s very urgent one can fasten the procedure by doubling this amount, 2) Register the company with the Entrepreneurial Register and get an identification number and certificate of state and tax registration with no charge and 3) Open a corporate account in the bank from 10 to 100 GEL (depending on the bank) and the most important, all these procedures only take 1 day to complete.
Nowadays, Georgian startups also have great ability to show their products in various exhibitions, free-markets, etc. among of which Startup Market Expo’s annual exhibition is the guarantee of success for both small businesses and startups which introduce their products in front of potential customers. Startup Market Expo was already held in 2016 and 2017. Fortunately, organizers aren’t planning to lose pace.
Lately, banks in Georgia started making contribution in developing businesses. Most of them offer financial or non-financial support to business newcomers and have specially composed terms of loans for them, with personal payment schedule. These programs support and stimulate new startups and the information about each program is easily accessible for any interested person on banks’ online platforms.
It must be mentioned that according to the World Bank Group’s Doing Business 2018 report, Georgia has improved its performance by 7 positions over the past year, and has moved from 16th to 9th place. Doing Business rating encompassed 190 countries, and Georgia is among the leading 10, which objectively reflects the results of the economic reforms of the Georgian Government.
Of course entrepreneurial spirit of Georgia has a positive effect on the country’s economy as a whole but each entrepreneur who sets up a business, should make it clear will their project succeed or not before taking on financial risks in the hope of profit, as long as, companies and people standing on the another side are expecting the same from them too.
Author: Tamar Devdariani © BUSINESS GEORGIA
Despite that in the past art was mostly perceived much like a hobby, in modern world artists have real opportunities to follow their artistic skills and transform their intentions into art-based businesses. As these activities are somehow linked to the economical welfare of the country, unfortunately there still exists states where art is hardly considered as a money earning business and unfortunately Georgia is among them.
Art is a diverse range of human activities which intends to be appreciated for their beauty and emotional power, including music, theater, film, dance and other performing arts, as well as literature, architecture, painting and many more. Some of them mentioned above are more successful in developing countries like Georgia than the others. For instance, if we are talking about material privileges, architects have wider prospects than painters or musicians here, as long as this kind of art, roughly speaking, is more practical and useful for so-called “real-businesses” to fulfill their plans than the others.
Statistically, according to the National Statistics Office of Georgia’s survey, the number of students enrolling for the bachelor’s programs to the faculty of Arts and Science grew almost 1.6 times in 2011 and 2015 years and every year, hundreds of young people are becoming students of Tbilisi State Academy of Arts of Georgia, which is the leading higher art institutions of Georgia offering high quality educations corresponding to modern requirements.
Giving a person education has become easier today than teaching them how to realize this knowledge and transform it into something materially beneficial for them and we usually lack the culture of teaching people how to make business with the profession they are perfectly good at.
This circumstances are still problematic in Georgia and so, graduate students mostly give up their profession. According to the survey conducted by Friedrich Ebert Foundation in 2016, 31% of young people are partly employed by their profession and 35% of them have lost connection with their first profession and had to fit different types of working activities.
Of course these numbers aren’t promising for so many students which enroll rather non-profitable faculties of Georgia like Art, but lately some events gave stimulus to creative young people to realize their handmade works or artistic services taking part in exhibitions with lower expenditures. For instance, painters now can post their works in e-auctions and this is one of the options of turning your creativity into a career in many countries.
Unfortunately, this kind of innovations stay unknown for older Georgian artist who try to sell own works or services in the streets, parks, etc., and there are no firm activities of gathering all of their artworks together. But even one glimpse around these artists is enough to see that usually tourists are the ones who are mostly interested in getting this kind of art.
Following the information given by FactCheck analysts of Georgia, the number of people living below the absolute poverty line grew by 0.5% in 2016 year and reached almost 21.3% of whole population and we can’t blame society about not paying enough attention to the art while living conditions are deplorable even for bigger number of population.
Even if modern Georgian writers will publish their books, only few readers can afford to “take a risk” while saving money for getting books to read a new authors works than worldwide known classical writer. We see also many talented musicians who strive for foreign countries and it’s obvious, whilst even winning some musical competitions doesn’t give them much chances to try career in mother land.
We can say that one of the most underrated fields of art in Georgia are film and theater, strangely even those international awards-winning Georgian films and animations are hardly seen on television, internet or cinemas and the reason for that, which is often mentioned even by artists themselves is that the media doesn’t pay enough attention to promoting our countries cultural achievements whilst in 21st century media became the strongest weapon in any direction you are aiming for.
So, as long as Georgian society realizes how strongly our indifference and ignorance affects art-makers whose career will always be directed to the foreign cultures, till the schools and universities will not approach more practical direction of developing students’ entrepreneurial skills, above-mentioned statistics about poverty will be under strong necessity of improving and country will always have issues with developing any fields of art and art business in Georgia.
Author: Tamar Devdariani © BUSINESS GEORGIA
Agricultural traditions are the main part of Georgian cultural heritage and mentality, as long as favorable climate with fertile soil make it one of the most productive economic sectors for the country and support production of a variety of high-value agricultural products including wine, nuts, citrus fruits, peaches, apricots, etc.
After signing a Deep and Comprehensive Free Trade Area (DCFTA) with the European Union in 2014, Georgia can produce agricultural products meeting the required safety and security standards and that makes it even more favorable for new investors of European markets, as longs as they can benefit from rising consumption on the local market, which is complemented by the Duty-free access to 900 million foreign markets under this agreement.
Georgia has emphasis on labor-intensive crops such as tea and grapes. In 2017, after the three-year study conducted by experts from seven countries, Georgia officially acknowledged as the cradle of wine and was invited to be a host of solo exhibition illustrating its oldest traditional viticulture and wine-making in Bordeaux, Paris.
Nowadays, wine export growth gives positive prospects to the sector, for instance after the data published in National Wine Agency of Georgia in January-February (2018) 10,8 mil. bottles of wine have been exported to 38 countries worldwide, that is 23% higher than the similar data of the last year.
There is fierce competition connected to the tea in Georgia, because strong local manufacturers are not allowing the international players to take over tea entirely but as Euromonitor International reveals, consumers of tea in Georgia stay quite conservative and most brands produce only black or green tea.
According to the Strategy for Agricultural Development in Georgia for 2015-2020, it is estimated that 25% of Georgia’s total land area is classified as permanent pastureland and about 70-80% of pasturing is self-regulated among local and nomadic pasture users, which gives good grounds for stockbreeding, but without having strong supporting policies small farmers which make 95% of all farmers, typically cultivating around one hectare of land with low output aren’t able to compete with imported products, which except dairy food and beverages mostly relies on meat products, as well as grains and egg. Generally, Georgia imports 80% of its packaged food products which has a significant negative impact on its trade balance.
The Georgian government identifies agriculture as a priority for development and has also set up the Agriculture Investment Fund to support the sector by providing credits for farmers. The projects of building new agricultural products processing plants can get grant from the government with a total value of up to 250 000 USD. In addition to this, investor can symbolically buy state owned immovable non-agricultural property only for 1 GEL.
Government of Georgia intends to create a favorable business environment because full use of Georgian agriculture potential is vitally important for country’s economy, for this purpose, in 2015, Parliament passed a bill allowing foreigners to own the land but with certain limitations as long as foreigners now may own agricultural land if they inherit it, co-own the land through marriage to a Georgian citizen or by being a member of a Georgian citizen household or hold a residence permit.
Georgia has 22 micro-climates varying from cool and dry to warm and humid. These diversified micro-climates allow for a longer than normal harvesting season and a range of growing conditions. Soils are of volcanic origin in the river valleys, which tend to be quite fertile and reasonably easy to cultivate.
Country has easy and cheap access to water as well and the prices of other utilities such as energy and gas is low too, but on the other hand, according to the 2017 budget, by GEL 83,000,210 reduced agricultural financing resulted in decreased funding for financing programs like the agricultural development program, food safety, epizootic goodwill and plant protection, viticulture, implementation of scientific research activities and so on.
During the last years, as a result of good international cooperation, the positive tendencies are being observed in regard to expanding the export market, increase of production and attracting the investment in the agricultural sector. But local production is still under strong necessity of boosting as long as even though having rich resources, trade balance between import and export is still unenviable in Georgia.
Author: Tamar Devdariani © BUSINESS GEORGIA
Photo: Tamuna Ubiria © BUSINESS GEORGIA
Georgian mineral waters are very famous not only in Georgia but in foreign countries also. Especially this product is realized by summer because hot weathers make bad effect to people, so consumers need minerals to be strong enough. And it’s no surprise that entrepreneurs are preparing for this season and for exporting in all over the world. The bestselling mineral waters of Georgia are: Borjomi, Nabeghlavi and Likani.
Georgia had mineral water export growth in every year from 2010 to 2014 years. Witch had acted good for Georgia’s economy. The export of mineral water was increasing by 12% -25% annually until the opening of the Russian market, after the opening of the Russian market in 2013, the export of waters increased by 45%, and in 2014 the figure was $ 137 123 million. In 2014, the Mineral waters took fourth place in the export products list.
In 2015, due to the crisis in the Russian market, export indicators continue to decline.
- 2010 – Export to $ 36 Million, increase by 33%
- 2011 – Exports Increase $ 47 million, increase by 23%
- 2012 – Exports amounted to $ 59 million, increase by 20%
- 2013 – Exports amounted to 106 million, increase by 44%
- 2014 – export $ 137 million, increase by 22%
From 2015 mineral and freshwater exports from Georgia are growing annually. According to the National Statistics Office of Georgia, in January-April 2017, 45.8 million liters of mineral and fresh water have already been exported, which is 18.4% more than the same period last year.
Below are the figures of mineral water export (2010-2017)
Photo: Lake Shaori. Racha, Georgia.
© Tamuna Ubiria