Apparel manufacturing in Georgia.
Strategically located at the crossroads of trade and commerce between East and West, Georgia is ideally positioned to access markets of Asia and Europe, as well as the Middle East and the CIS countries. The young talent pool, business-friendly regulations, a favorable tax rate, customs framework, and the relatively low-cost work environment have played a key role in developing a well-functioning manufacturing sector in Georgia.
Average Gross Salary, Manufacturing Sector, 2018.
Electricity Tariffs, 2018.
Why manufacture in Georgia?
A rich history of apparel manufacturing.
Georgia has a rich history of manufacturing apparel dating back to the 60s and 70s. Contract manufacturing of apparel is well-developed in Georgia and existing factories produce apparel for famous international brands such as Marks & Spencer, Moncler, Nike, Adidas, Zara, Puma, and H&M. The largest companies in the industry are engaged in Cut, Make, Trim (CMT) operations.
Free Trade Agreements.
Georgia enjoys Deep and Comprehensive Free Trade Area (DCFTA) with the EU, Free Trade Agreements with Turkey, Ukraine, China (including Hong-Kong), EFTA and CIS countries as well as Generalized System of Preferences (GSP) with the USA, Canada, and Japan.
Favorable tax rates.
Georgia enjoys low tax rates and a transparent taxation system. The country does not have a corporate income/profit tax on retained and reinvested profit, and profit tax applies only to distributed earnings. This taxation model makes Georgia one of the most attractive tax regimes in the world. Additionally, Georgia has four Free Industrial Zones (FIZs) in Poti (seaport), Kutaisi (the second largest city), and Tbilisi (the capital). Businesses registered in Free Industrial Zones benefit from certain tax exemptions if they produce goods for export – companies are exempt from all taxes except Personal Income Tax (20%) and pension contribution, which are paid from the employees’ salaries.
Low utility costs.
The utility costs are quite favorable – the standard cost for 1 kWh is approximately 6 USD cents for 35-110 kV high voltage electricity (including VAT). Furthermore, up to 80% of power is generated via hydropower plants, leading to clean and cheaper energy costs.
Young, skilled and competitively priced labor.
Georgia offers young, skilled and competitively priced labor force. The average monthly salary in the manufacturing sector was 370 USD in 2018 including white and blue-collar workers. 56% of the unemployed population are in the 20-40 age category. According to the Heritage Foundation, Georgia has one of the most flexible labor codes and ranks 19th globally on the Labor Freedom Index. Additionally, there are dozens of state-owned vocational educational institutions providing courses in subjects relevant to the manufacturing sector and the government is ready to co-finance customized training based on manufacturers’ requests.
Visit us.
Georgian Textile Group
19 Avchala Street
Tbilisi, Mtskheta-Mtianeti
Georgia
Phone
+45 53 65 18 47