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Economic relations

There are many opportunities related to rebuilding and developing the country after the long period of communism and the most recent conflicts. A bilateral investment protection agreement came into effect in late 2000. An agreement to prevent double taxation and to prevent tax evasion in the area of income and wealth tax was signed on 7 March 2007 and the Coface loan insurance mechanism opened in 2009. An ambitious government reform and a vast privatization programme have been initiated since President Saakashvili’s team came into power. While our companies encountered numerous difficulties until 2003, these reforms have played a role in creating a more favourable environment for investors.

With a market share of 2.5%, France was Georgia’s 12th supplier in 2008. However, our trade could be revitalized through project assistance tools of the Ministry of the Economy, and the French Business Club created on the initiative of the French Embassy in Georgia to encourage bilateral trade in February 2008 in Tbilisi (70 French and Georgian members), and the signing, during Mr. Saakashvili’s visit, of a letter of intent on cooperation in the area of sustainable development.

In 2009, while French exports to Georgia held steady (+4.6% to €58M against €55M in 2008), imports from Georgia decreased considerably (€8M against €58M in 2008), due primarily to a very sharp reduction in purchases of oil, chemical and metal products. In this context, the trade balance appears to show a considerable surplus in France’s favour, of more than €49M.

French companies are positioned essentially in contracts related to infrastructure renovation. French investments are significant and visible. In September 2006, Société Générale acquired a controlling interest in “Bank Republic”, which has become the country’s third-biggest bank. Pernod Ricard acquired a controlling interest in “Georgian Wine and Spirit”. A “Novotel” hotel will open in Tbilisi in 2010. On 21 July 2009, President Saakashvili inaugurated the radar Thalès gave the Georgian company, Sakaeronavigatsia. In 2010, the company Aéroports de Paris carried out a feasibility study on renovating the runway at Tbilisi’s airport.

Updated on 25.11.10



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