POLICY PAPER N2024/05 - GEORGIA'S TAX CODE GAMBLE WITH OFFSHORE HAVENS

In summary, even if the stated intent behind Georgia’s tax code amendments is to boost foreign direct investment, the associated risks and negative perceptions far outweigh the potential benefits, and this policy brief recommends abolishing the law in the best interests of the country. [...] The third group consists of those jurisdictions with low quality supervision and little cooperation with onshore authorities, such as Panama, the British Virgin Islands, the Cayman Islands, the Marshall Islands, Mauritius, and others.9 The Financial Action Task Force (FATF), established by the G7 and other international bodies, has identified three primary methods of money laundering and of integr. [...] This is one of the key priorities in the 2023-2026 National Strategy of Georgia on the prevention, detection, and suppression of money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction.21 The strategy aims to further align the country’s legislation with international standards, particularly FATF Recommendations, relevant EU directives, and other. [...] The Ministry of Finance is likely to follow the established list of countries with preferential taxation, set under Resolution N615 of the Government of Georgia, issued in 2016.26 This list includes well-known offshore jurisdictions such as Panama, the British Virgin Islands, Cyprus, the Marshall Islands, and other similar offshore territories. [...] Considering the aforementioned uncertainties, if the objective of the recent amendments to Georgia’s Tax Code is to draw capital and spur investment, it would be reasonable to introduce minimum investment requirements in the legislation for qualifying companies, similar to the conditions set forth in the FDI grant program administered by Enterprise Georgia – such as minimum investment amounts and.