A Free Industrial Zone in Georgia is a physical customs enclave, not a tax status you apply for from a laptop. If you landed here from our tax regime comparison or the Virtual Zone guide and you run a solo consultancy, a software product or any other remote service business, the honest answer is that this regime was never built for you, and the rest of this page will mostly confirm that. Free Industrial Zones exist for businesses that manufacture, process or physically move goods inside one of a small number of fenced sites the government has designated for exactly that. Here is where those zones actually are, who genuinely benefits, the tax package on offer, and the trade-offs that come with it.
What a Free Industrial Zone actually is, and why it is not for software or freelance work
A Free Industrial Zone, FIZ for short, is a defined territory the Georgian government has designated under the Law of Georgia on Free Industrial Zones, inside which a registered enterprise operates under a separate tax and customs regime from the rest of the country. The law allows an FIZ enterprise to carry out "production and processing of any goods, or rendering any services," with a short list of banned activities covered further down.
That framing is broader than it sounds in practice. The zones are built, marketed and staffed around manufacturing, processing, assembly, warehousing and trade, and the substance the Revenue Service expects is a company genuinely operating inside the fenced site: leased premises, equipment, inventory moving through customs control, people physically there. A services business with no goods to declare does not fit that picture, whatever the statute technically permits.
This is the point where Free Industrial Zones get confused with Georgia's other preferential regimes, and it is worth being direct about the difference. Virtual Zone status and International Company Status both target IT and service exports, and both let the company be based anywhere in Georgia with no requirement to occupy a specific physical site. A Free Industrial Zone is the opposite structure: the tax treatment attaches to the zone itself, and the company has to actually be inside it. If your business is software, consulting, design, marketing or anything else delivered over the internet, an FIZ has nothing to offer you that Virtual Zone or Small Business Status does not already do better and more simply. This guide is for the minority of readers running or planning a manufacturing, processing, assembly, warehousing or re-export operation who genuinely need a physical footprint in Georgia.
The zones that actually exist, and where they are
Georgia runs four Free Industrial Zones doing general goods and manufacturing business, plus a fifth that is effectively a single-purpose petroleum terminal and not relevant to most readers of this page.
| Zone | Location | Established | What it's built for |
|---|---|---|---|
| Poti FIZ | Poti, on the Black Sea coast | 2008 | The oldest and largest zone, attached to Georgia's main sea port. Hosts over 100 companies, mostly trading, logistics and re-export businesses moving goods through the port |
| Kutaisi FIZ | Kutaisi, western Georgia | 2009 | The original Kutaisi zone, built on the site of the former Kutaisi Automobile Plant |
| Hualing Kutaisi FIZ | Kutaisi, adjacent to Kutaisi FIZ | Operational since 2015 | The larger of the two Kutaisi zones, backed by the Chinese-owned Hualing Group, expanded to roughly 58 hectares, geared toward manufacturing and large-scale export production near Kutaisi International Airport |
| Tbilisi FIZ | Near the capital | Opened 2015 | Under new ownership since 2023. Reported to be close to fully occupied, hosting a mix of light manufacturing, food production, construction materials and pharmaceutical storage |
A fifth zone, Kulevi FIZ on the Black Sea coast, has operated since 2017 around SOCAR's oil transshipment terminal. It is built for petroleum handling specifically and is not a realistic option for a general manufacturing or trading business, so it is not covered further here.
None of the four zones is inherently "better" the way one preferential tax rate can beat another. Poti suits sea freight moved straight through the port, the Kutaisi zones suit export manufacturing near the airport, and Tbilisi suits a business that values proximity to the capital over port access, at a higher lease cost. The right one follows how your goods actually move.
Who the Free Industrial Zone regime actually suits
Businesses that get real value from an FIZ share one feature: physical goods to produce, process, store or move, where the zone's customs treatment removes friction at scale.
- Manufacturers assembling or producing goods for export, where duty-free import of raw materials and components meaningfully lowers input cost
- Processing operations, food, materials, components, that take goods in, add value, and ship them back out
- Logistics, warehousing and re-export businesses using Poti's port access to move goods through Georgia without the customs friction ordinary import would carry
- Trading companies holding inventory that will mostly leave Georgia again rather than sell into the domestic market
What all four have in common is that the exemption attaches to a specific physical operation, not to a company's income generally. A services business earning fees for work performed anywhere gets nothing from occupying industrial space it does not need, which is why Virtual Zone status, built around exported IT products rather than a physical site, is a separate track entirely. We compare Virtual Zone, International Company Status and the rest of Georgia's regimes in Georgia's tax regime comparison.
The tax package: what a Free Industrial Zone enterprise actually gets
Within the zone, an FIZ enterprise's qualifying activity carries a broader exemption than either of Georgia's other preferential regimes.
- Corporate profit tax: 100% exempt on profit earned from activity inside the zone, against the standard 15%-on-distribution rate an ordinary Georgian company pays, covered in full in corporate income tax in Georgia
- VAT: 100% exempt on the import of foreign goods into the zone and on qualifying transactions within it, against the standard 18% covered in VAT in Georgia
- Import and export duty: fully exempt on foreign goods entering the zone and on zone-produced goods leaving Georgia
- Property tax: exempt on property held and used inside the zone
- Personal income tax: unaffected. Employees of an FIZ enterprise pay the standard 20% on their wages, exactly as anywhere else in Georgia
| Ordinary LLC | Virtual Zone | International Company Status | Free Industrial Zone | |
|---|---|---|---|---|
| Corporate tax | 15% on distribution | 0% on qualifying export IT income | 5% on profit | 0% on qualifying zone activity |
| VAT | 18% above threshold | Standard rules apply outside export | Standard rules apply | 0% within the zone |
| Import/export duty | Standard rates apply | Not applicable | Not applicable | 0% |
| Physical presence required | No | No | Yes, real local staff | Yes, inside the zone specifically |
| Minimum trading history | None | None | 2 years | None stated |
| Status duration | Indefinite | Indefinite | Indefinite | Annual licence, renewed yearly |
Registering as an FIZ enterprise sits on top of an ordinary Georgian entity registration, not instead of it. The company is registered through the National Agency of Public Registry the same way any LLC is, at the standard 200 GEL standard or 400 GEL same-day fee. FIZ enterprise status itself is then a separate application to the Revenue Service, and a lease agreement with the zone's private operator for the physical premises the business will actually occupy. The zone administration issues a licence to conduct activity inside it, and unlike Virtual Zone status, that licence is annual and has to be renewed rather than granted once and left indefinitely.
The 4% catch: selling into the rest of Georgia
The exemptions above cover activity that stays inside the zone's customs boundary, or genuinely leaves Georgia as an export. What they do not cover is selling from the zone into the rest of the country, and this is the one place the otherwise clean 0% package leaks.
Under Article 25 of the Tax Code of Georgia, when a Free Industrial Zone enterprise supplies goods to a person outside the zone, anywhere else in Georgia, it owes 4% of the revenue from that supply, or 4% of market price if the goods are supplied free of charge, payable by the 15th of the month following the month of supply. The same 4% applies in reverse: when a person outside the zone supplies goods to an FIZ enterprise, the FIZ enterprise pays 4% of the market price of what it received.
The practical effect: a business genuinely exporting through the zone, or trading between FIZ enterprises, keeps the full 0% package. A business selling a meaningful share of output into the Georgian domestic market pays 4% on that portion, worth modelling before committing to a zone lease over an ordinary import structure. For a business selling mostly inside Georgia, an ordinary company clearing goods through standard customs, covered in import duties in Georgia, is very often simpler and cheaper, since it avoids the zone lease and licence renewal without gaining much the 4% doesn't already erode.
Registering in a Free Industrial Zone, and what it actually costs
The direct government cost is the same registry fee any Georgian entity pays, 200 GEL standard or 400 GEL same-day through LLC registration, plus the FIZ enterprise status application to the Revenue Service. Beyond that, the real cost is the zone lease itself, quoted directly by whichever zone operator you choose rather than published as a fixed fee, and it varies meaningfully between the four zones depending on location, infrastructure and how much space the operation actually needs.
After the entity itself is registered, two steps remain: agree a lease with the chosen zone's operator for the physical premises the business will occupy, then apply for FIZ enterprise status with the Revenue Service, describing the qualifying activity. The zone's own operating licence follows, running for one year and renewed annually rather than granted permanently.
Compliance for an FIZ enterprise sits at a higher tier than a plain company's, for a similar reason to a Virtual Zone company: filings have to correctly separate zone-exempt activity from any domestic-sale revenue subject to the 4%, which is precisely what an audit tests. Our accounting service prices FIZ companies on the same higher tier as VAT-registered and Virtual Zone LLCs, not the entry-level tier built for a plain IE.
Free Industrial Zone, Virtual Zone and International Company Status all sit under the general heading of "Georgian tax incentives," and treating them as interchangeable versions of the same idea is the most common mistake we see. Virtual Zone and International Company Status exempt or reduce tax on IT and specified services exported from anywhere in Georgia, with no requirement to occupy a particular site. A Free Industrial Zone exempts tax on production, processing and goods handling carried out physically inside a designated territory, and the exemption simply does not attach if the activity happens anywhere else. Picking between them is not a question of which rate is lower - it is a question of which one your actual business model can qualify for at all.
The trade-offs worth weighing before you commit
A zero-tax package sounds like an easy decision until the practical constraints that come with it are priced in properly.
- Real premises, not a registered address. The exemption attaches to genuine physical operation inside the zone - an unused lease survives scrutiny no better than a Virtual Zone certificate with no real development behind it.
- An annual licence, not a one-time status. Budget for yearly renewal and the admin that comes with it, rather than treating registration as a single event.
- Banned activities. Arms and ammunition, nuclear and radioactive materials, narcotics and psychotropic substances, and tobacco products (narrow internal-consumption exceptions aside) cannot be conducted inside a Free Industrial Zone.
- The 4% domestic-sale leak. A business selling meaningfully into Georgia alongside exporting loses part of the benefit on exactly that local revenue, covered above.
- Zone choice is a logistics decision, not just a tax one. Poti for sea freight, the Kutaisi zones for manufacturing near the airport, Tbilisi for capital proximity - the right zone follows how your goods move, and getting it wrong is expensive to reverse once a lease is signed.
Weighed honestly against these constraints, a Free Industrial Zone is a strong fit for a real manufacturing, processing or logistics operation and a poor one for almost everything else, including businesses that assume "free zone" means an easier version of Virtual Zone status. It is not that; it is a different tool built for a different kind of company.
Bring us your activity, your goods and where they move, and we will check it honestly against a Free Industrial Zone, Virtual Zone or International Company Status, including whether an ordinary import structure would simply cost you less.
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Key takeaways
- Rule an FIZ out immediately if your business has no physical goods to produce, process or move - go to Virtual Zone or Small Business Status instead rather than reading further.
- Model the 4% domestic-sale tax against how much of your output will actually stay in Georgia before signing a zone lease.
- Budget for the zone lease and the annual licence renewal on top of the standard registration fee, not instead of it.
- Pick the zone by how your goods physically move, sea through Poti, manufacturing near Kutaisi's airport, or capital proximity in Tbilisi, rather than by tax terms, since the exemptions themselves are identical across all four.
- Set your accounting up on the higher compliance tier from day one, since separating zone-exempt income from any domestic-sale revenue is exactly what an audit tests.
Frequently asked questions
What is a Free Industrial Zone in Georgia?
It is a physically designated territory where a registered enterprise operates under a separate tax and customs regime, exempt from corporate profit tax, VAT, import and export duty and property tax on activity carried out inside the zone. It is built for manufacturing, processing and goods handling, not for remote services.
Which Free Industrial Zones are currently operating in Georgia?
Four general-purpose zones: Poti, on the Black Sea coast; Kutaisi FIZ and the larger Hualing Kutaisi FIZ, both in western Georgia; and Tbilisi FIZ, near the capital. A fifth, Kulevi, is a specialised petroleum terminal zone and not relevant to most businesses.
Is a Free Industrial Zone the same as Virtual Zone status?
No. Virtual Zone status gives 0% corporate tax on IT products exported from anywhere in Georgia, with no requirement to occupy a specific site. A Free Industrial Zone gives a similar exemption, but only for activity physically carried out inside the designated zone. They are separate regimes for genuinely different kinds of business.
Can a software or consulting business register in a Free Industrial Zone?
Technically the law does not exclude services, but in practice the zones are built and marketed for manufacturing, processing and goods handling, and the substance a company needs to show is a real physical operation inside the zone. A software or consulting business with no goods to move gets nothing from an FIZ that Virtual Zone status or Small Business Status does not already provide more simply.
What taxes does a Free Industrial Zone enterprise actually pay?
Profit earned from qualifying activity inside the zone is exempt from corporate profit tax, VAT and import and export duty, and zone property is exempt from property tax. Employees still pay the standard 20% personal income tax on their wages, exactly as anywhere else in Georgia.
What happens if I sell goods from the zone into the rest of Georgia?
That specific transaction falls outside the exemption. The Tax Code charges the FIZ enterprise 4% of the revenue from that supply, and the same 4% applies in reverse when a Georgian business outside the zone supplies goods to the FIZ enterprise, both payable monthly by the 15th of the following month.
How do I register a company in a Free Industrial Zone?
Register the underlying entity, typically an LLC, through the standard process, agree a lease with the zone operator, apply for FIZ enterprise status with the Revenue Service, and obtain the zone's operating licence. Monthly filing and the ordinary Georgian compliance calendar apply from the point the business starts operating.
Does Free Industrial Zone status expire?
The underlying enterprise registration does not, but the zone's own operating licence is issued for one year and has to be renewed annually. That is different from Virtual Zone status, which is granted once and does not carry a renewal cycle.
What activities are banned inside a Free Industrial Zone?
Arms and ammunition manufacturing or trading, nuclear and radioactive substances, narcotic and psychotropic substances, and tobacco products, with limited exceptions for internal consumption within the zone. Outside that list, the law permits a broad range of production, processing and service activity.
Which zone should I choose - Poti, Kutaisi or Tbilisi?
It depends on how your goods physically move rather than on tax terms, since all four zones carry the same statutory exemptions. Poti suits sea freight through Georgia's main port, the two Kutaisi zones suit manufacturing near the international airport, and Tbilisi suits a business that values proximity to the capital over port access.
Do employees working in a Free Industrial Zone pay less income tax?
No. Personal income tax is unaffected by an employer's Free Industrial Zone status. Employees pay the standard 20% on their salary regardless of whether their employer holds any preferential corporate status.