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Georgia Introduces 10-Year Tax Incentives for Innovative Startups
Legislation under review offers substantial tax relief to foster innovation and attract global entrepreneurs.
Georgia is poised to implement a significant tax incentive aimed at fostering innovation and entrepreneurship within the country. The proposed legislation, currently under review by the Parliament, introduces a 10-year tax relief program specifically designed for businesses that attain the status of an "innovative startup."
Under this initiative, qualifying startups will benefit from a complete exemption from income tax for the first three years of operation. This initial period of tax relief is intended to provide emerging companies with the financial flexibility to invest in product development, market expansion, and talent acquisition without the immediate burden of tax liabilities.
Following the initial exemption period, the tax structure will gradually increase, with startups subject to a 5% income tax rate for the subsequent four years and a 10% rate for the final three years of the program. This phased approach aims to support startups during their critical growth phases while gradually integrating them into the standard tax framework.
To qualify for the innovative startup status, a company must be a legal entity engaged in the creation of innovative products. The status is granted for one year and can be renewed annually, with a maximum validity period of 10 years. This structure ensures that only companies actively contributing to innovation continue to benefit from the tax incentives.
The Deputy Minister of Economy and Sustainable Development, Irakli Nadareishvili, highlighted that this initiative is part of Georgia's broader strategy to enhance its innovation ecosystem and attract foreign investment. By offering substantial tax relief, the government aims to position Georgia as a competitive hub for startups, particularly in sectors such as artificial intelligence, biotechnology, and agricultural innovation.
This legislative move reflects Georgia's commitment to creating a conducive environment for innovation-driven enterprises, recognizing their potential to drive economic growth, create high-value jobs, and enhance the country's global competitiveness.
As the bill progresses through the parliamentary process, stakeholders within the startup ecosystem are closely monitoring its developments, anticipating the opportunities it will unlock for both domestic and international entrepreneurs seeking to establish or expand their ventures in Georgia.