Tbilisi Finding Its Niche
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Investor.A MAGAZINE OF THE AMERICAN CHAMBER OF COMMERCE IN GEORGIA ge ISSUE 21 JUNE-JULY 2011 Includes articles from the FT 10 Year Visas to America The End of Aggressive Audits? Boys (and Girls) of Summer Viva Batumi Tbilisi Finding its Niche Investor.ge Investor.ge CONTENT Investment/ 18 A Blossoming Development Business 6 Grabbing the FDI Greenhouses in georgia Opportunity are inching into the EPI’s investment country’s import-driven promotion specialist flower market and Rodrigo Ortiz says cultivating a demand Georgia is at a strategic for landscaping. moment to attract investment. 20 New Owner, New Plans for Poti Port Wine and Tourism 6 Ten Year Visas to the APM Terminals, part of United States Moller-Maersk Group, 52 Delegation to the USA A new visa policy from purchased 80 percent the U.S. government of Poti Sea Port in April extends the valitity from RAKIA 30 Health: A Culture of visas, but does New Frontier for 39 Overcoming the not affect criteria for 21 Trouble Shopping? Investors Lack of Cooperation applicants. Tbilisi has Plans This is the second of – Social Capital in New malls and brand three articles dedicated Georgia 8 Improved franchises might to the health industry. CRRC analysis the Regulations for change shopping in role of social capital Securities Market Tbilisi. The Financial Times in Georgia, and its Could Help 32 Medvedev Seen potential to influence Georgian Business 24 Privatization to Target Capital economic growth. Victor Kipiani, a partner Planned for Flight as Election Bid at Mgaloblishvili, Parliament? Evolves 41 Economic Crime Kipiani, Dzidziguri What will happen to the Russian President and the Spirit of (MKD) law firm, building on Rustaveli Dimitri Medvedev Capitalism analyzes changes to Avenue? is targeting new the Georgian securities investments. 44 Viva Batumi market. 26 In Brief Officials hope a A new feature on 33 Microsoft’s Skype summer full of festivals 9 Can a Leopard new investments and Gamble and concerts in Batumi Change its Spots? business news by Eteri Analysis of Microsoft’s will help boost the The Georgian Revenue Maisuradze decision to buy Skype region’s allure as a Service is changing, for $8.5 billion. destination. what does this mean for 26 A New Plan for your business? Tbilisi 36 FIFA Hit By New 47 Team Georgia City Hall, together Bribes Claims Over Far from the cries of 12 Attitude Toward with the World Bank, World Cup Bid fanatic fans, the World Business Shifting is working on a New allegations of Series and foot-long hot Attitudes toward the strategy for the city’s accepting bribes dogs, America’s favorite business community are development. dog FIFA’s executive pastime is going strong, improving. committee. thanks to a Georgian 26 Analyzing enclave of enthusiastic 14 Berta, Georgia’s Investment: How 38 Intel Hails 3D Chip players and dedicated New Manufacturing Cities Position Technology coaches. Adventure Themselves for FDI Intel to start production A case study of Berta, a on chips this year. new joint-venture light 27 Georgian industry production E-Healthcare, plant. Education and Training .................... 49 JUNE-JULY 2011 3 Investor.ge AmCham Georgia Patron Members: © The American Chamber of Investor.ge Commerce in Georgia, 2011 All rights reserved. No part of this magazine may be re-printed, or reproduced or utilized in any form or by electronic, AmCham Executive Director George Welton mechanical or other means now known or hereafter invented, including photocopying Editor in Chief Molly Corso and recording, or in any information Copy Editor Fiona Coxshall storage or retrieval system without permission. Marketing & Promotion Bella Makaridze, Diana Karibova The opinions expressed in this magazine Promotional Design Levan Baratashvili do not refl ect the opinion of the American Chamber of Commerce in Georgia nor its Magazine Design and Layout Giorgi Megrelishvili Board Members or staff, unless otherwise Writers Nick Clayton, Molly Corso, stated. AmCham Georgia neither endorses, Andrew Coxshall, Maia Edilashvili, nor can be held liable for any eventuality Monica Ellena, Victor Kipiani, arising from the use of any product or Eteri Maisuradze, George McGurn, FT Special Reports service advertised within the pages of this issue. Photographs Molly Corso, Adjara Department of Tourism Investor.ge is printed by CEZANNE Cover Batumi House of Justice AmCham Georgia Special thanks to the AmCham Editorial Board – Irakli Baidashvili, Betsy Haskell, 36a Lado Asatiani Street, 3rd fl oor Badri Japaridze and Stephanie Komsa – the AmCham staff, Nino Kacharava, Tel: 22-69-07 Michele Dunn, Sarah Williamson, and The Financial Times [email protected] [email protected], www.amcham.ge www.investor.ge 4 JUNE-JULY 2011 Investor.ge JUNE-JULY 2011 5 Investor.ge thousand CEOs and decision makers who Grabbing the FDI Opportunity should be interested in Georgia, not the umbrella of CNN watchers. Georgia is at a strategic moment to attract investment but it needs a target “This is not a mass consumption and consistent approach, says Rodrigo Ortiz, a senior investment promotion audience,” he said. “You probably want specialist with USAID’s new Economic Prosperity Initiative. to target 100 thousand key executives in the whole world.” odrigo Ortiz paints a tantalizing market place, it will keep growing and It is not politics, Ortiz stressed, but future for Georgia; a future that growing.” the potential for profi ts that will bring Rfollows Costa Rica and Singa- Organization is also vital, Ortiz add- business to Georgia – and keep it here. pore – countries that seized a policy to ed. The Georgian National Investment That means the government has to attract foreign investors, and keep them Agency is at the core of the country’s fi gure out its precise – “consistent” -- coming. efforts to promote investment, but its message to businesses, Ortiz noted. And the secret of successful policy, real power could be in the structure of And once Georgia captures busi- Ortiz said, is a strategy that evokes im- its board. Ortiz noted that the GNIA is nesses’ attention, decision makers need ages of a complex dance: the perfect overseen by a powerful group of minis- to have access to information, like aver- timing, message, and organization -- plus ters and Prime Minister Nika Gilauri – a age pay. That data, he said, is currently consistency. cross section of decision makers that diffi cult to obtain. “It is all about promotion …it is all should make it easy for the government Georgia, he stressed, is in a “strate- about having a consistent and sustained to identify and resolve obstacles for gic moment of time” when it is on the approach ... And it is not something that investors quickly. world’s radar screen. is going to happen in three months,” he Ortiz warned however that the GNIA “But you won’t stay there for very stressed. should readjust its approach. long,” he warned. “So there is an op- “It is going to happen in the next Promotion has to be “laser” – direct portunity to go in there and play in the two or three years and if you stay in the and proactive, tailored to target 100 game. Or just watch it.” U.S. Government: Ten Year Visas for Georgians A new, ten year visa for Georgians But the change does not signal a “Do not apply for a green card as traveling to America simplifies shift in how visas are issued or how the an expeditious way to get to the United travel but does not affect the long embassy determines who is eligible for States and avoid the visa process,” he standing laws on who is eligible and a visa, since the law remains unchanged. said. how visa applications are approved. The process of determining who fi ts “If they don’t plan on living in the that criteria is not “a formula,” Wingate United States right now and they are mar- explained – underscoring a persistent ried to an American citizen, then wait… eorgians traveling to the United impression that the application process go ahead and travel on the ten year visa.” States will now receive mul- is erratic. Gtiple-entry business-tourism “It is on a case-by-case basis,” he The consular section also works for visas valid for ten years – up from the 12 said – and boils down to demonstrating American citizens, ranging from the fi nal month visas issued previously. social and economic ties. visa for adoptions to for-a-fee notary ser- The program is a refl ection of fewer The ten-year visa is also potentially vices. For more information on citizen, visa violations, and a visa waiver system signifi cant for Georgian citizens who and non-citizen, services, visit in Georgia for American citizens. have a US Green Card – but currently georgia.usembassy.gov ”The main point there is actually reci- reside in Georgia. In addition, the consular section has procity,” Patrick Wingate, the consular Green Cards are “a benefit” that a registration system for US citizens chief at the embassy, told Investor.ge: allows people to stay indefi nitely. The visiting the country – the Smart Traveler Georgia allows Americans to stay for up catch, however, Wingate noted, is Green Enrollment Program (STEP): to 360 days without a visa. Card holders are “expected to stay”. travelregistration.state.gov 6 JUNE-JULY 2011 Investor.ge JUNE-JULY 2011 7 Investor.ge the possibility of placing local currency placed with a recognized foreign stock denominated government debt securi- exchange. Improved ties. If, however, the transaction occurs In December 2010 the National through a stock exchange licensed Regulations Bank of Georgia took an even more under Georgian law, there is no need to radical step when the bank’s president notify the National Bank of Georgia: for presented a list of “foreign recognized” a locally licensed stock exchange con- stock exchanges – opening them up to tacts the regulator to notify it about the the local securities market.