Georgia is connected by the in the west, by Turkey and Armenia in the south, by Azerbaijan in the east, and Russia in the north. The republic also involves the and Ajara autonomous republics and .

History became a kingdom about 4 B.C. and Christianity was introduced in A.D. 337. During the reign of Queen Tamara (1184–1213), its territory included the whole of Transcaucasia. During the 13th century, Tamerlane and the Mongols decimated its population. From the 16th century on, the country was the scene of a struggle between Persia and Turkey. In the 18th century, it became a vassal to Russia in exchange for protection from the Turks and Persians.

Georgia joined Azerbaijan and Armenia in 1917 to establish the anti- Bolshevik Transcaucasia Federation and upon its dissolution in 1918, Georgia proclaimed its independence. In 1922, Georgia, Armenia, and Azerbaijan were annexed by the USSR and formed the Transcaucasia Soviet Socialist Republic. In 1936, Georgia became a separate Soviet republic. Under Soviet rule, the country was transformed from an agrarian to a largely industrial, urban society. Government Republic. Prime Minister Nikoloz Gilauri (2009) President Mikhail Saakashvili (2004) Minister of State Avtandil Jorbenadze (2001) Total Area 26,911 sq mi (69,700 sq km) Capital T'bilisi (2009) Languages Georgian 71% (official), Russian 9%, Armenian 7%, Azeri 6%, other 7% Religions Orthodox Christian 83.9%, Muslim 9.9%, Armenian- Gregorian 3.9%, Catholic 0.8%, other 0.8%, none 0.7% (2002 census) Population (2010 4,600,825 (growth rate: –0.3%); birth rate: est.) 10.7/1000; infant mortality rate: 15.6/1000; life expectancy: 76.9; density per sq km: 66 Capital and Largest , 1,440,000 (metro. area), 1,240,200 (city City (2003 est.) proper) Monetary Unit Lari National International US$ 2.11 billion (Source: World Bank; November Reserves 2010)

Economy Gold, silver, copper and iron have been mined in the Caucasus Mountains. Wine making is a very old tradition. The country has sizable hydropower resources. Throughout Georgia's modern history agriculture and tourism have been principal economic sectors, because of the country's climate and topography.

For much of the 20th century, Georgia's economy was within the Soviet model of command economy. Since the fall of the USSR in 1991, Georgia embarked on a major structural reform designed to transition to a free market economy. As with all other post-Soviet states, Georgia faced a severe economic collapse. The civil war and military conflicts in South Ossetia and Abkhazia aggravated the crisis. The agriculture and industry output diminished. By 1994 the gross domestic product had shrunk to a quarter of that of 1989. The first financial help from the West came in 1995, when the World Bank and International Monetary Fund granted Georgia a credit of USD 206 million and Germany granted DM 50 million.

Since early 21st century visible positive developments have been observed in the economy of Georgia. In 2007 Georgia's real GDP growth rate reached 12%, making Georgia one of the fastest growing economies in Eastern Europe. The World Bank dubbed Georgia "the number one economic reformer in the world" because it has in one year improved from rank 112th to 18th in terms of ease of doing business., The country has a high unemployment rate of 12.6% and has fairly low median income compared to European countries.

The 2006 ban on imports of to Russia, one of Georgia's biggest trading partners, and break of financial links was described by the IMF Mission as an "external shock". In addition, Russia increased the price of gas for Georgia. This was followed by the spike in the 's rate of inflation. The stated that the inflation was mainly triggered by external reasons, including Russia’s economic embargo. The Georgian authorities expected that the current account deficit due to the embargo in 2007 would be financed by "higher foreign exchange proceeds generated by the large inflow of foreign direct investment" and an increase in tourist revenues. The country has also maintained a solid credit in international market securities. Georgia is becoming more integrated into the global trading network: it’s 2006 imports and exports account for 10% and 18% of GDP respectively. Georgia's main imports are natural gas, oil products, machinery and parts, and transport equipment.

Since coming to power Saakashvili administration accomplished a series of reforms aimed at improving tax collection. Among other things a flat income tax was introduced in 2004 As a result budget revenues have increased fourfold and a once large budget deficit has turned into surplus.

Georgia is developing into an international transport corridor through Batumi and Potiports, an oil pipeline from Baku through Tbilisi to Ceyhan, the Baku-Tbilisi-Ceyhan pipeline (BTC) and a parallel gas pipeline, the South Caucasus Pipeline.

Tourism is an increasingly significant part of the Georgian economy. About a million tourists brought US$313 million to the country in 2006. According to the government, there are 103 resorts in different climatic zones in Georgia. Tourist attractions include more than 2000 mineral springs, over 12,000 historical and cultural monuments, four of which are recognized as UNESCO World Heritage Sites( in Kutaisi and , historical monuments of Mtskheta, and Upper Svaneti).

As of 2001 54% of the population lived below the national poverty line but by 2006 poverty decreased to 34%. In 2005 average monthly income of a household was GEL 347 (about 200 USD). IMF 2007 estimates place Georgia's nominal GDP at US$10.3 billion. Georgia's economy is becoming more devoted to services (now representing 65% of GDP), moving away from agricultural sector (10.9%).

Gross Domestic Product - US$ 12.855 billion (2010 estimate) GDP GDP (Purchasing Power 23.934 billion of International dollars Parity) (2010 estimate) GDP per capita - Current US$ 2,927 (2009 estimate) Prices GDP per capita – PPP $5,450 International Dollars (2009 estimate) GDP - composition by sector • Agriculture: 12.2% • Industry: 26% • Services: 61.8% (2009 estimate) Gross Domestic N/A Expenditure on R&D (% of GDP) Household Saving Rates N/A Government Bond Ratings Standard & Poor's: B+/Stable/B Moody's rating: Ba3 Moody's outlook: STA

Human Rights Human rights in Georgia are guaranteed by the country's constitution. There is an independent human rights public defender elected by the to ensure such rights are enforced. Georgia has ratified the Framework Convention for the Protection of National Minorities in 2005. NGO "Tolerance", in its alternative report about its implementation, speaks of rapid decreasing of the number of Azerbaijani schools and cases of appointing headmasters to Azerbaijani schools who don't speak the Azerbaijani language.

The government came under criticism for its alleged use of excessive force on , 2011 when it dispersed protesters led by , among others, with tear gas and rubber bullets after they refused to clear Rustaveli avenue for an independence day parade despite the expiration of their demonstration permit and despite being offered to choose an alternative venue. While human rights activists maintained that the protests were peaceful, the government pointed out that many protesters were masked and armed with heavy sticks and Molotov cocktails. Georgian opposition leader Nino Burjanadze said the accusations of planning a coup were baseless, and that the protesters' actions were legitimate.

Foreign Relations Georgia maintains good relations with its direct neighbors’ Armenia, Azerbaijan, Turkey, and is a member of the United Nations, the Council of Europe, the World Trade Organization, the Organization of the Black Sea Economic Cooperation, the Organization for Security and Cooperation in Europe, the Community of Democratic Choice, the GUAM Organization for Democracy and Economic Development, and the Asian Development Bank. Georgia also maintains political, economic and military relations with Japan, Uruguay, South Korea, Israel, Sri Lanka, Ukraine and many other countries.

The growing U.S. and European Union influence in Georgia, notably through proposed EU and NATO membership, the U.S. Train and Equip military assistance program and the construction of the Baku-Tbilisi-Ceyhan pipeline, have frequently strained Tbilisi's relations with Moscow. Georgia's decision to boost its presence in the coalition forces in Iraq was an important initiative.

Georgia is currently working to become a full member of NATO. In August 2004, the Individual Partnership Action Plan of Georgia was submitted officially to NATO. On October 29, 2004, the North Atlantic Council of NATO approved the Individual Partnership Action Plan (IPAP) of Georgia and Georgia moved on to the second stage of Euro-Atlantic Integration. In 2005, by the decision of the , a state commission was set up to implement the Individual Partnership Action Plan, which presents an interdepartmental group headed by the Prime Minister. The Commission was tasked with coordinating and controlling the implementation of the Individual Partnership Action Plan.

On February 14, 2005, the agreement on the appointment of Partnership for Peace (PfP) liaison officer between Georgia and the North Atlantic Treaty Organization came into force, whereby a liaison officer for the South Caucasus was assigned to Georgia. On March 2, 2005, the agreement was signed on the provision of the host nation support to and transit of NATO forces and NATO personnel. On March 6–9, 2006, the IPAP implementation interim assessment team arrived in Tbilisi. On April 13, 2006, the discussion of the assessment report on implementation of the Individual Partnership Action Plan was held at NATO Headquarters, within 26+1 format. In 2006, the Georgian parliament voted unanimously for the bill which calls for integration of Georgia into NATO. The majority of and politicians in Georgia support the push for NATO membership.

From the European commission website: President Saakashvili views membership of the EU and NATO as a long term priority. As he does not want Georgia to become an arena of Russia-U.S. confrontation he seeks to maintain close relations with the United States and European Union, at the same time underlining his ambitions to advance co-operation with Russia.

George W. Bush became the first sitting U.S. president to visit the country. The street leading to Tbilisi International Airport has since been dubbed George W. Bush Avenue. On October 2, 2006, Georgian and the European Union signed a joint statement on the agreed text of the Georgia-European Union Action Plan within the European Neighborhood Policy (ENP). The Action Plan was formally approved at the EU-Georgia Cooperation Council session on November 14, 2006 in Brussels.

Military Georgia's military is organized into land and air forces. They are collectively known as the Georgian Armed Forces (GAF). The mission and functions of the GAF are based on the Constitution of Georgia, Georgia’s Law on Defense and National Military Strategy, and international agreements to which Georgia is signatory. They are performed under the guidance and authority of the Ministry of Defense.

Since coming to power in 2004, Saakashvili has boosted spending on the country's armed forces and increased its overall size to around 45,000. Of that figure, 12,000 have been trained in advanced techniques by U.S. military instructors, under the Georgia Train and Equip Program. Some of these troops have been stationed in Iraq as part of the international coalition in the region, serving in Baqubah and the Green Zone of Baghdad. In May 2005, the 13th "Shavnabada" Light Infantry Battalion became the first full battalion to serve outside of Georgia. This unit was responsible for two checkpoints to the Green Zone, and provided security for the Iraqi Parliament. In October 2005, the unit was replaced by the 21st Infantry Battalion. Soldiers of the 13th "Shavnabada" Light Infantry Battalion wear the "combat patches" of the American unit they served under, the Third Infantry Division.

Since 2009, Georgia contributes nearly 1000 soldiers to the NATO- led International Security Assistance Force in Afghanistan, making it the highest per-capita troop contributor to the mission. As of September 2011, Georgia has suffered 10 deaths and 38 injuries.

Education The education system of Georgia has undergone sweeping modernizing, although controversial, reforms since 2004. Education in Georgia is mandatory for all children aged 6–14. The school system is divided into elementary (6 years; age level 6–12), basic (3 years; age level 12–15), and secondary (3 years; age level 15–18), or alternatively vocational studies (2 years). Students with a secondary school certificate have access to higher education. Only the students who have passed the Unified National Examinations may enroll in a state-accredited higher education institution, based on ranking of scores he/she received at the exams.

Most of these institutions offer three levels of study: a Bachelor's Program (3–4 years); a Master's Program (2 years), and a Doctoral Program (3 years). There is also a Certified Specialist's Program that represents a single-level higher education program lasting for 3–6 years. As of 2008, 20 higher education institutions are accredited by the Ministry of Education and Science of Georgia. Gross primary enrollment ratio was 94% for the period of 2001–2006. Culture Georgian culture evolved over thousands of years with its foundations in Iberian and Colchian civilizations, continuing into the rise of the unified Georgian Kingdom under the single monarchy of the Bagrationi. Georgian culture enjoyed a golden age and renaissance of classical literature, arts, philosophy, architecture and science in the 11th century.

The , and the Classical Georgian literature of the poet , were revived in the 19th century after a long period of turmoil, laying the foundations of the romantics and novelists of the modern era such as Grigol Orbeliani, Nikoloz Baratashvili, , Akaki Tsereteli, Vazha Pshavela, and many others. Georgian culture was influenced by Classical Greece, the Roman Empire, the Byzantine Empire, and later by the Russian Empire.

Georgia is well known for its rich folklore, unique traditional music, theatre, cinema, and art. Georgians are renowned for their love of music, dance, theatre and cinema. In the 20th century there have been notable Georgian painters such as Niko Pirosmani, , Elene Akhvlediani; ballet choreographers such as George Balanchine, Vakhtang Chabukiani, and Nino Ananiashvili; poets such as Galaktion Tabidze, Lado Asatiani, and Mukhran Machavariani; and theatre and film directors such as Robert Sturua,Tengiz Abuladze, Giorgi Danelia and Otar Ioseliani.

Architecture and Arts Georgian architecture has been influenced by many civilizations. There are several different architectural styles for castles, towers, fortifications and churches. The Upper Svaneti fortifications, and the castle town of Shatili in Khevsureti, are some of the finest examples of medieval Georgian castle architecture. Other architectural aspects of Georgia include Rustave liavenue in Tbilisi in the Hausmann style, and the Old Town District.

Georgian ecclesiastic art is one of the most fascinating aspects of Georgian Christian architecture, which combines classical dome style with original basilica style forming what is known as the Georgian cross-dome style. Cross-dome architecture developed in Georgia during the 9th century; before that, most Georgian churches were basilicas. Other examples of Georgian ecclesiastic architecture can be found outside Georgia: in Bulgaria (built in 1083 by the Georgian military commander Grigorii Bakuriani), monastery in Greece (built by Georgians in the 10th century), and the Monastery of the Cross in (built by Georgians in the 9th century).

The art of Georgia spans the prehistoric, the ancient Greek, Roman, medieval, ecclesiastic, iconic and modern visual arts. One of the most famous late 19th/early 20th century Georgian artists is a primitivist painter Niko Pirosmani.

Cuisine and wine have evolved through the centuries, adapting traditions in each era. One of the most unusual traditions of dining is Supra, or Georgian table, which is also a way of socializing with friends and family. The head of Supra is known as Tamada. He also conducts the highly philosophical toasts, and makes sure that everyone is enjoying themselves. Various historical regions of Georgia are known for their particular dishes: for example, Khinkali (meat dumplings), from eastern mountainous Georgia, and , mainly from , Samegrelo and . In addition to traditional Georgian dishes, the foods of other countries have been brought to Georgia by immigrants from Russia, Greece, and recently China. Religion The Georgian Apostolic Autocephalous Orthodox Church is one of the world's most ancient Christian Churches, founded in the 1st century by the Apostle Andrew the First Called. In the first half of the 4th century Christianity was adopted as the state religion. This has provided a strong sense of national identity that has helped to preserve a national Georgian identity despite repeated periods of foreign occupation and attempted assimilation.

According to the Constitution of Georgia, religious institutions are separate from government and every citizen has the right of religion. Most of the population of Georgia (83.9%) practices Orthodox Christianity and the is an influential institution in the country.

The Gospel was preached in Georgia by the Apostles, Andrew, Simon the Canaanite, and Matthias. Iberia was officially converted to Christianity in 326 by of Cappadocia, who is considered to be the Enlightener of Georgia and the Equal to Apostles by the Orthodox Church. The Georgian Orthodox Church, once being under the See of Antioch, gained an autocephalous status in the 4th century during the reign of King Vakhtang Gorgasali.

Religious minorities of Georgia include Armenian Christians (3.9%), Muslims (9.9%), and Roman Catholics (0.8%). Despite the long history of religious harmony in Georgia, there have been several instances of religious discrimination and violence against "nontraditional faiths", such as Jehovah's Witnesses, by the followers of the defrocked Orthodox priest Vasil Mkalavishvili.

Sports Among the most popular sports in Georgia is football, basketball, rugby union, wrestling, and weigh lifting. Historically, Georgia has been famous for its physical education; it is known that the Romans were fascinated with Georgians' physical qualities after seeing the training techniques of ancient Iberia. Wrestling remains a historically important sport of Georgia, and some historians think that the Greco-Roman style of wrestling incorporates many Georgian elements.

Within Georgia, one of the most popularized styles of wrestling is the Kakhetian style. There were a number of other styles in the past that are not as widely used today. For example, the Khevsureti region of Georgia has three different styles of wrestling. Other popular sports in 19th century Georgia were polo, and Lelo, a traditional Georgian game later replaced by rugby union.

Demographic Statistics Total population 8,186,453 100.0

Male 4,027,113 49.2 Female 4,159,340 50.8 Population and National Origin U.S. Rank Total Hispanic Population in Georgia 816,000 10 Hispanics as Percent of State Population 8% 22 Hispanics as Percent of U.S. Hispanic Population 1.7% Native-Born Hispanics (Percent of Hispanics) 50% 48 Foreign-Born Hispanics (Percent of Hispanics) 50% 4 Mexican Origin (Percent of Hispanics) 62% 10 Non-Mexican Origin (Percent of Hispanics) 38% 13

Age Median Age (years) All Hispanics 25 Native-Born Hispanics 10 Foreign-Born Hispanics 33 Non-Hispanic Whites 38 Non-Hispanic Blacks 31 Marriage and Fertility Marriage: Persons Ages 15 and Percent Married Older All Hispanics 49%

Native-Born Hispanics 37%

Foreign-Born Hispanics 54%

Non-Hispanic Whites 55%

Non-Hispanic Blacks 31% Fertility: Women 15 to 44 Births to Hispanic Women (12 month period prior to 20,000 survey) Hispanic Births as a Percent of All Births in Georgia 14% Births to Native-Born Hispanics 5,000 (26%) Births to Foreign-Born Hispanics 15,000 (74%) Economic Status U.S. Earnings: Persons 16 and older Median Rank Annual Personal Earnings of Hispanics $18,000 36 Annual Personal Earnings of Non-Hispanic Whites $32,000 20 Annual Personal Earnings of Non-Hispanic Blacks $24,000 17

Percent in Poverty Poverty Hispanics 17 and Younger 40% Non-Hispanic Whites 17 and Younger 11% Non-Hispanic Blacks 17 and Younger 32% Hispanics 18-64 27% Non-Hispanic Whites 18-64 4% Non-Hispanic Blacks 18-64 14% Homeownership: Homeownership U.S. Householders Rate Rank Hispanics 43% 28 Non-Hispanic Whites 77% 9 Non-Hispanic Blacks 51% 6 Health Insurance Percent Uninsured Hispanics 49% Native-Born Hispanics 23% Foreign-Born Hispanics 75% Non-Hispanic Whites 14% Non-Hispanic Blacks 23% Hispanics 17 and Younger 28% Non-Hispanic Whites 17 and Younger 7% Non-Hispanic Blacks 17 and Younger 10% School Enrollment U.S. Rank Number of Hispanics Enrolled in K-12 194,000 9 Hispanics as Percent of All K-12 Students 11% 22 Language Language at Home: Persons 5 and Older 123,000 Only English Spoken at Home (18%) Language Other than Only English Spoken at 573,000 Home (82%) Georgia Demographics & Household Information

Georgia Household Information

Number of Households 3,006,369

Households: Family 2,111,647

Households: Non-Family 894,722 Households: With 1,174,114 Children

Age 0-4 595,150

Age 5-9 615,584

Age 10-14 607,759

Age 15-19 596,277

Age 20-24 592,196

Age 25-34 1,299,256

Age 35-44 1,353,508

Age 45-54 1,079,992

Age 55-59 375,651

Age 60-64 285,805

Age 65-74 435,695

Age 75-84 261,723

Age 85+ 87,857

Georgia Income & Jobs $0-10,000 9,039 $10,000 - $14,999 176,059 $15,000 - $24,999 369,279 $25,000 - $34,999 378,689 $35,000 - $49,999 502,961 $50,000 - $74,999 593,203 $75,000 - $99,999 311,651 $100,000 - $149,999 234,093 $150,000 - $199,999 66,084 Over $200,000 70,843

Georgia Education Less than 9th Grade 393,197 Some High School 718,152 High School Graduate 1,486,006 Some College 1,058,692 Associate Degree 269,740 Bachelor's Degree 829,873 Graduate Degree 430,305 Percentage High School or Higher 78.6%

Georgia Residential Statistics Average Home Sale Price $111,200 Total Housing Units 3,281,737 Owner Occupied 2,029,154 Rental Occupied 977,215 Rental Vacancy Rate 8.2% Vacant Housing Units 275,368 Median Travel Time to Work 28 minutes Transportation to Work: Public 90,030 Transportation to Work: Drive / Carpool 557,062 Transportation to Work: Walk / Bike / Other 107,815 Work at Home 108,986 Georgia Ethnicity Statistics

White 5,412,371

African American 2,393,425

Hispanic or Latino 435,227

Asian 199,812

American Indian or Alaska Native 53,197

Hawaiian / Pacific Islander 9,689

Other 241,298

Government and Politics Georgia is a democratic semi-presidential republic, with the President as the head of state, and Prime Minister as the head of government.

The executive branch of power is made up of the President and the Cabinet of Georgia. The Cabinet is composed of ministers, headed by the Prime Minister, and appointed by the President. Notably, the ministers of defense and interior are not members of the Cabinet and are subordinated directly to the President of Georgia. is the current President of Georgia after winning 53.47% of the vote in the 2008 election. Since February 6, 2009 Nikoloz Gilauri has been the prime minister of Georgia.

Legislative authority is vested in the Parliament of Georgia. It is unicameral and has 150 members, known as deputies, from which 75 members are proportional representatives and 75 are elected through single-member district plurality system, representing their constituencies. Members of parliament are elected for 4 four-year term. Five parties and electoral blocs had representatives elected to the parliament in the 2008 elections: the United National Movement (governing party), The Joint Opposition, the Christian-Democrats, the Labour Party and Republican Party.

Although considerable progress was made since the , Saakashvili states that Georgia is still not a "full-fledged, very well-formed, crystallized society." The political system remains in the process of transition, with frequent adjustments to the balance of power between the President and Parliament, and opposition proposals ranging from transforming the country into to re-establishing the monarchy.[85][86] Observers note the deficit of trust in relations between the Government and the opposition.

Different opinions exist regarding the degree of political freedom in Georgia. President Saakashvili believes that the country is "on the road to becoming a European democracy." Freedom House puts Georgia in the group of partly free countries, along with countries like Ukraine, Bosnia and Herzegovina, and Macedonia.

Doing Business in Georgia Setting up a business in Georgia is a straightforward process. Procedures are simple and efficient, based on a transparent system that promotes the establishment of new enterprises. In fact, the registration process takes only 1 day to complete.

As industries in Georgia develop, firms and investors are looking for opportunities to invest. The combination of dynamic economic growth, pro- business legislation, a liberal tax code, a strong legal framework to protect investors and an educated and skilled workforce presents a solid platform for successful business opportunities in Georgia.

Currently, there are approximately 260,000 businesses operating in Georgia, with more than 4,600 businesses established by foreign capital or with its participation.

Foreign Trade As industries in Georgia develop, firms and investors are looking for opportunities to invest. The combination of dynamic economic growth, pro- business legislation, a liberal tax code, a strong legal framework to protect investors and an educated and skilled workforce presents a solid platform for successful business in Georgia.

More than 4,600 companies in Georgia were established by foreign investors. These firms have capitalized upon the skills and talents of Georgias multi- lingual and highly educated workforce. Ü Georgia offers competitive cost factors (labor, utilities, real estate, taxes). Ü Georgia's workforce of 1.9 million people is highly educated – 30.8% have university degrees. Ü Average Gross Monthly Salaries are lower than European equivalents – USD 343 in 2009. Ü Georgia boasts low tariffs, streamlined border clearance procedures and preferential trade regimes with major partners, including the EU, CIS countries, the U.S. and Free Trade with Turkey. Georgia has been a member of the WTO since 2000 and has no quantitative restrictions on trade. Ü Georgia hosts an excellent infrastructure. Extensive public and private investment has developed a dynamic nationwide network of roads, railroads, waterways, harbors and airports. Ü Georgia's foreign trade has been growing rapidly since 2003 as a result of aggressive policy reforms to make it easier and less expensive to trade across borders. Ü Georgia offers a high quality of living to visitors. Its environment is clean, with a focus on Green Energy and organic food production.

Certification and Licences Information on the quality of product is necessary when exporting goods from Georgia, as well as the information on entities that can provide quality certification service in the country.

Most countries apply The WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) to regulate requirements for food products and animal fodder. Quality certification systems such as ISO; OHSAS; HACCP are widely applied in international trade.

Quality Certificate Quality certificates can be obtained from laboratories that operate in Georgia and are registered in the National Accreditation Body – Accreditation Center (GAC)

Legal Framework Since 2004, Georgia has implemented a proactive strategy in developing its legal framework in order to attract investment as well as to protect investors and their assets. Below are highlights of Georgia’s legal framework as it relates to international investment.

INVESTOR PROTECTION Promoting investment is considered to be a primary goal of the State economic policy. Georgian legislation provides for the protection of investors and their assets through domestic regulations, as well as through the number of Bilateral Investment Treaties and international agreements with partner countries and organizations. With few exceptions, foreign investors are guaranteed fair and equal treatment under the law, regardless of their nationality, and have the same rights and guarantees as Georgian companies.

INVESTMENT GUARANTEES Georgian legislation offers unconditional protection of investments. Assets of a foreign investor shall not be subject to expropriation, except when it is explicitly provided in the law, decision of the court or constitutes a matter of urgent necessity as envisaged in the respective organic law and with fair compensation, including the amount of damages born by investor from expropriation. In any event investors have the right to challenge the decision regarding the expropriation of the investment in the local courts of Georgia.

The State protects investment during the state of war and provides equal treatment of foreign and domestic investors while compensating for damages.

Most significantly, should new laws be adopted worsening the investment conditions it shall not have a retrospective application to the existing investment for the period of ten years and the investor will conduct its activity in accordance with law applicable at the time when the investment was carried out.

LABOR LAW Georgia has one of the most liberal Labor Codes in the World. According to the Heritage Foundation, Georgia's ranking on the Labor Freedom Index was 99.9. Georgia is a member of the International Labor Organization, and investors are guaranteed authorization to hire foreign workers, who are permitted to transfer their income abroad once they have complied with all state duties and levies. CHOICE OF LAW Georgian legislation provides the possibility to foreign investors to have their contractual obligations governed by the law of the country they choose. The choices of law provisions are legal, valid and binding under the laws of Georgia and will be recognized and followed by Georgian courts.

DISPUTE RESOLUTION According to the Law of Georgia on Promotion and Guarantees of Investment Related Activities, unless otherwise agreed between the parties, any dispute arising out of or in connection with the investment activity between the Government of Georgia and a foreign investor shall be resolved by the courts of Georgia. However, the most commonly favored tribunal is the International Center of Settlement of Investment Disputes decisions of which are final and binding on the parties and are easily enforceable through the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards to which Georgia joined on June 2, 1994.

INTERNATIONAL AGREEMENTS EU & OECD REGULATIONS AGREEMENTS Georgia is party to the EU initiative, the European Neighborhood Policy, which, from a legislation standpoint, means that Georgian legislation should be brought in line with the EU laws.

Furthermore, Georgia has recognized technical regulations of European Council, Organization for Economic Cooperation and Development (OECD), and its main trading partner countries and permitted their comparable activities, which will consequently promote the development of business environment and the reduction of technical obstacles in trading.

INTERNATIONAL TRADE AGREEMENTS Georgia has been a member of The World Trade Organization since 2000 and benefits from Most Favored Nation Regime with WTO Members, which provides lower tariffs for WTO members. It has joint major bilateral agreements within the WTO.

Georgia benefits from a Generalized System of Preferences when trading with the USA, Canada, Switzerland and Japan. Accordingly, lower tariffs are applied on goods exported from Georgia into these countries.

Georgia is beneficiary of GSP Plus trading regime, which allows Georgia to export 7200 products to the 495 million EU market duty free. From January 2006, Georgia has also enjoyed GSP Plus status with Turkey which envisages entire liberalization of trade on industrial goods as well as essential preferences in the field of agriculture.

Aggressive Privatization Policy Georgia’s government is aggressively privatizing state-owned property to attract private capital to state owned assets in order to introduce efficient management, increase investment and boost economic growth and jobs creation. The Government of Georgia received US$266 million USD from privatization in 2007. Key features of Georgia’s privatization policy include: Ü Flexibility – Use of Various Methods of Sale: To promote an efficient privatization process, the Government of Georgia utilizes various methods to privatize state-owned property such as tender, auction, lease-redemption and direct sale. Ü Transparency – To ensure a high level of fairness and transparency, the Government actively works towards establishing international contracts with interested organizations and potential investors. A special web-site, www.privatization.ge has been created to provide privatization related information. Ü Fairness – Equal Opportunities for all Potential Buyers - Any Georgian or foreign person or company has the right to take part in the privatization process in compliance with the laws of Georgia. Ü Investor-initiated privatization: Investors can initiate an expedited, transparent and competitive privatization of particular assets necessary to an investment project.

Why to invest in Georgia Ü Workforce Ü Business environment Ü Strategic location Ü Business ranking Ü Investment incentive

Key Factors Ü Infrastructure Ü Agriculture Ü Tourism Ü Energy Ü Manufacturing Ü Real estate development Ü Financial & insurance Ü Transportation & logistic Ü IT & communications