Economy
Posted: 2 months ago

Strategy to Turn Georgia into "Regional Financial Hub" Costs the Budget ₾ 1.8 million

In December 2021, the Georgian government signed a contract with asset management company Rothschild & Co., which included the preparation of economic reforms for Georgia.

As Prime Minister Irakli Gharibashvili stated, as a result of these reforms, Georgia should be established as a "Regional Financial Hub". A document published by the Ministry of Finance shows that the contract with the company costs the state budget 1,857,225 GEL.

"To allocate GEL 1,857,225 to finance the costs of consulting services required to attract foreign investment and support Georgia's position as an international regional financial and banking hub," reads the document, which reflects the costs of the Government Reserve Fund.

What reform should be prepared?

The Government of Georgia announced on January 17, 2022, that they plan to create a new type of free economic zone. If FIZ is currently focused on manufacturing and logistics, the new type of FIZ will focus on financial activities. "Special Financial Zone" - this will be the name of this new FIZ.

According to the government, two locations have already been selected for these zones. In particular, the zone will be located on 110 hectares in Tbilisi and Gonio.

In other words, Rothschild & Co is working on a reform project, which envisages the development of the Temka area and Gonio International Financial Center, for which the Georgian government pays almost 2 million GEL.

"Special financial zones will offer international companies a legal regime based on the principles of common law, as well as regulatory and fiscal regimes based on international experience. Most importantly, more than half of the employees of companies operating in these zones must be Georgian citizens. High-profile international companies, such as the Rothschild Company, will be involved in setting up these centers.

These centers will focus on fintech, asset management companies, trading companies, and so on. "Ultimately, we assume that this will contribute to the development of the capital market," Prime Minister Irakli Gharibashvili said in January.