Caspian Sea Gas Heads to Europe Through Georgia Georgian Chatbots Georgian Banks Eye International Wealth Management
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CASPIAN SEA GAS HEADS TO GEORGIAN BANKS EYE GEORGIAN CHATBOTS EUROPE THROUGH GEORGIA INTERNATIONAL WEALTH MANAGEMENT Investor.geA Magazine Of The American Chamber Of Commerce In Georgia ISSUE 64 AUG.-SEP. 2018 Georgian Wine’s New Frontier LAW PRACTICE ǡǦ ϐ Ǥ ǡ Ǥϐ ǡǡ ǡǡ ϐ ϐǤ Ǧ Ǥ ǡ Ǥ ሺ ͳͻͻͻሻሺ ሻ ǤZPVS Ǧ Ǥ ǡ ontact us: a K, P ̷Ǥ ϐ ʹͺǡ Ͷǡ ͶǡͳǦǤ ǡͲͳͺǡ ǣΪͻͻͷ͵ʹʹʹͲͶͲ AUGUST-SEPTEMBER 2018 Investor.ge | 3 Investor.ge CONTENT 6 Investment News 10 Investor Spotlight Investor.ge is starting a column on new investments and investors to the country. 11 Innovators and Disruptors: Ideas to Bring Change Georgian entrepreneurs are pushing the country’s development forward. This column is about how Georgia’s best and brightest are challenging the limits of technology and the market to create the businesses that will change our lives today and shape our future. 11 14 The Best Minds In The Business: Famous Economists Weigh In On Georgia 16 New PM Overhauls Economic Team 18 Georgia in Mid-2018: A Positive Economic Trend Continues 20 Georgian Households: Positive Long- Term Trends, Though Poverty Remains 22 Georgian Banks Eye International Wealth Management 26 Southern Gas Corridor: Delivery of Caspian Sea Gas to Europe through Georgia 30 Georgian Wines on Mars? A New Initiative to 26 Grow Grapes in Space 32 Bank of Georgia Demerger: An interview with CEO Kaha Kiknavelidze 33 Georgia’s Tobacco Gambit 36 Reuse, Reduce, Recycle: Georgian Businesses Making a Difference 39 Off the Beaten Path: Georgia’s Untapped Potential for Agrotourism 43 Tasting Georgia: An Interview with Award- Winning Author Carla Capalbo 46 NEWS ...... 46 4 | Investor.ge AUGUST-SEPTEMBER 2018 ! "# $ " % ! & '$ ( ! AUGUST-SEPTEMBERAUGUST-SEPTEMBER 20182018 Investor.geInvestor.ge | 5 GEORGIA 17TH HIGHEST ing 17th place; Singapore was the most INVESTMENT COUNTRY FOR SAFETY secure country according to the survey. Georgia ranked in the top 20 out of 142 countries for security, according to a GEORGIA, HONG KONG SIGN NEWS poll by the American research company FREE TRADE AGREEMENT Gallup, agenda.ge reported on June 29. Georgia and Hong Kong signed The survey, known as the Law and a Free Trade Agreement on June 28, Order Index, uses four questions to agenda.ge reported the same day. INVESTOR.GE PROVIDES evaluate locals’ “sense of personal secu- Under the agreement, Georgia will A BRIEF UPDATE rity and their personal experiences with remove 96.6 percent of its tariff lines on ON INVESTMENTS crime and law enforcement,” according products from Hong Kong, the article AND CHANGES IN to the report. said. GOVERNMENT POLICY The questions are: In the city or area The article quoted Secretary for THAT COULD IMPACT THE ZKHUH\RXOLYHGR\RXKDYHFRQ¿GHQFH Commerce and Economic Development BUSINESS ENVIRONMENT. in the local police force?; Do you feel of Hong Kong Edward Yau as saying THE INFORMATION IN safe walking alone at night in the city or WKLVZDVWKH¿UVWIUHHWUDGHDJUHHPHQW THIS ISSUE WAS TAKEN area where you live?; Within the last 12 between Hong Kong and any country in FROM AGENDA.GE, months, have you had money or property the Caucasus. A GOVERNMENT- stolen from you or another household SUPPORTED WEBSITE, AND member?; Within the past 12 months, GEORGIA, CHINA START JOINT OTHER SOURCES. have you been assaulted or mugged? FILM PRODUCTION Georgia received a score of 87, rank- A memorandum of understanding has ADVERTISEMENT New Associate Partner Announcement at EY Georgia EY Georgia is pleased to announce that, effective 1 July 2018, we welcome George Svanadze as an Associate Partner who is taking a leading role in further growth of our EY Law practice and building a better working world. The promotion recognizes George’s contribution to our law practice and d emonstrates our ambition to be the leader in the Georgian legal market. Assigned to/from Georgia and wondering if you have any personal income or other tax liabilities in your host/home country? The EY Georgia Global Immigration and Expatriate Tax Services team will <]l]jeaf]qgmjlYphgkalagf^jgel`]dg[YdYf\afl]jfYlagfYdlYpdYoklYf\hgaflk3]fljq']pallYpZja]Õf_k 9\nak]gfl`]lYpaehda[Ylagfkj]dYl]\lgqgmjljYfk^]jlg'^jge?]gj_aY 9kkakloal`lYpj]_akljYlagfaf?]gj_aY =fkmj]^mddlYp[gehdaYf[]Yf\Ykkakloal`hj]hYjYlagfg^l`]YffmYdlYpj]lmjf 9kkakloal`gZlYafaf_f][]kkYjq\g[me]flk^jgel`]klYl]lYpYml`gjala]k ]&_&YlYp[d]YjYf[][]jlaÕ[Yl] on the taxes paid in Georgia to avoid double taxation, wherever applicable) Hjgna\]j]_mdYjmh\Yl]kgflYpdYo[`Yf_]kl`YleYqY^^][lqgmjafl]jfYlagfYdegZadalqhjg_jYe 9kkakloal`gZlYafaf_l`]j]imaj]\lqh]g^nakY 9kkakloal`gZlYafaf_']pl]f\af_ogjcj]ka\]f[]h]jealk^gjqgmYf\qgmj^Yeadqe]eZ]jk3 We also assist companies in developing international assignment tax policies that align closely with the organization’s business activities, are cost-effective and help to mitigate tax risks. Contact us: Tina Kachakhidze Miranda Morchadze Tax & Law Practice People Advisory Services Tel: +995 (32) 215 88 11 (ext. 2112) Tel: + 995 (32) 215 88 11 (ext. 2231) [email protected] [email protected] EHHQVLJQHGEHWZHHQ*HRUJLDDQG&KLQDWRERRVWWLHVLQWKH¿OP industry, agenda.ge reporting on June 25. The memorandum was signed during the 2018 Shanghai International Film Festival, the article said. 7KH¿UVW*HRUJLDQ&KLQHVH¿OPZDVDOVRDJUHHGWRGXULQJ WKH¿OPIHVWLYDOWKH¿OPZLOOWHOOWKHVWRU\DERXWKRZWZR &KLQHVHPHQ¿UVWEURXJKWWHDWR*HRUJLD A Chinese television show, The Mask, is also currently being ¿OPHGLQ*HRUJLDDFFRUGLQJWRWKHDUWLFOH NEW HIGHWAY BYPASS OPENS NEAR BLACK SEA RESORT A new 18-kilometer road was opened by Prime Minister Mamuka Bakhtadze on June 25, agenda.ge reported the same day. 7KHQHZURDGZLOOUHGXFHWUDI¿FRQWKHFRDVWDOURDGWKDW travels through the popular Black Sea resort of Kobuleti. It will also shorten the driving distance from the capital Tbilisi to the Black Sea port city of Batumi by an estimated 20 to 30 minutes. 7KHURDG¶VFRQVWUXFWLRQZDV¿QDQFHGE\WKH$VLDQ'HYHO- opment Bank. GEORGIA’S ECONOMY GROWS 6.1 PERCENT IN FIRST HALF OF YEAR The Georgia economy has grown 6.1 percent from January through May, agenda.ge reported on June 29, quoting GeoStat, WKHQDWLRQDOVWDWLVWLFVRI¿FH 6HFWRUVWKDWSRVWHGWKHKLJKHVWJURZWKGXULQJWKH¿YHPRQWK SHULRGLQFOXGHGWUDQVSRUWPDQXIDFWXULQJWUDGH¿QDQFHDQG hotels and hospitality. The government has forecast a 4.5 percent growth this year, the article said. GOVERNMENT TO CUT SPENDING – PRIME MINISTER Prime Minister Mamuka Bakhtadze has announced that government spending next year will be less than 3.9 percent of GDP, a reduction of around $40 million, agenda.ge reported on June 26. The Prime Minister also plans to reduce the number of government ministries from 14 to 11. OMAN AIRLINE ENTERS GEORGIAN MARKET 2PDQ¶VEXGJHWDLUOLQH6DODP$LULVVWDUWLQJGLUHFWÀLJKWV between Muscat and Tbilisi, agenda.ge reported on June 26, FLWLQJWKH*HRUJLDQ&LYLO$YLDWLRQ$JHQF\7KHÀLJKWVZLOOEH offered three times a week, on Tuesdays, Thursdays and Satur- days. The new route is seasonal, and is planned to continue for this summer until October 27, 2018, the report said. 8 | Investor.ge AUGUST-SEPTEMBER 2018 SPECIAL OOFFER FOR AmCham members: RESERVER A TABLE FOR LUNCH OOR DINNER AT OUR STUNNINGSTUNNING RESTAURANT ANDND GET A COMPLIMENTARY BOTTLEBOTTLE OFOF TSINANDALI ESTATEATE WINEWINE Republic Rooftopop Rose Revolution Squareuare +995 591 08 71 722 reservations@ andropovsears.gevsears.ge www.andropovsears.ges.ge AUGUST-SEPTEMBERAUGUST-SEPPTEMBER 201820018 Investor.geInInveveststoorr.g.ge | 9 INVESTOR.GE IS STARTING A COLUMN ON NEW Investor INVESTMENTS AND INVESTORS TO THE COUNTRY. INVESTOR.GE SPOKE TO INFINITY ENERGY’S KRESIMIR CONDIC ABOUT THE COMPANY’S PLANS TO BUILD A Spotlight NEW WIND FARM IN GEORGIA. Infinity Energy Q¿QLW\(QHUJ\EHFDPHLQWHUHVWHGLQ is part of the Black Sea – Caspian Sea environmental impact of the wind farms investing in Georgia after hearing wind tunnel, which means there are good on the surrounding areas. Based on the Iabout the country’s wind energy indicators for wind conditions in terms study conducted, the selected territory potential at an EBRD conference. of energy production. Kresimir Condic is favorable in terms of environmental Jointly owned by Austrian Ivicom notes Georgia’s potential as a provider impact, as it is neither the primary, nor Holding GmbH and Georgian Consul- of wind-based energy and says that a secondary route for migrating birds. It WHDP/WG,Q¿QLW\(QHUJ\LVFRQVLGHU- memorandum of understanding has is also remote from the local popula- ing building an up-to-420-megawatts already been signed with the Georgian tion. Potentially, if all goes well with (MW) wind farm project in Imereti, with Ministry of Energy. Now the company ¿QDOQHJRWLDWLRQVZLWKWKHJRYHUQPHQW DFDSDFLW\RI0:LQLWV¿UVWVWDJH is in the process of studying the wind construction on the project could begin and the rest in the second stage. Imereti conditions and investigating the potential in spring-summer 2019. 10 | Investor.ge AUGUST-SEPTEMBER 2018 NINO BAKRADZE ministration had to spend on answering Innovators and students’ questions,” Asatiani said. veryone who has ever used Siri “That’s why we think chatbots are the Disruptors: Ideas or Alexa can attest to how great future of business: generally, communi- Echatbots can be—and how frus- cation by words is natural for humans and to Bring Change tratingly limited they can be. instead of clicking some images on the GEORGIAN ENTREPRENEURS Artist Zura Jishkariani and program- computer, it is more comfortable to tell ARE PUSHING THE COUNTRY’S mer Sandro Asatiani have taken those someone what to do and then wait while DEVELOPMENT FORWARD. limitations head on and are creating chat- WKLVGLJLWDOFUHDWXUHIXO¿OOV\RXUUHTXHVW THIS COLUMN IS ABOUT HOW bots as eloquent and erudite as a poet. Now technology is changing and turn- GEORGIA’S BEST AND BRIGHTEST $FWXDOO\WKHLU¿UVWFUHDWLRQZDVD ing to verbal communication more and ARE CHALLENGING THE LIMITS OF TECHNOLOGY AND THE MARKET poet—the well-known Georgian poet more,” he added. TO CREATE THE BUSINESSES Galaktion Tabidze. THAT WILL CHANGE OUR LIVES Ilia State University was quick to FUTURE OF BUSINESS TODAY AND SHAPE OUR FUTURE.