1993
Billion Coupon
311
142
270
168
-
1994
55821
30769
41758
25000
-
1995
Million Lari
127
65
90
19
43
1996
170
60
91
24
86
1997
266
67
114
19
180
1998
512
915
244
16
401
1999
364
119
248
76
169
2000
349
141
181
89
119
2001
362
201
101
33
128
2002
246
158
86
59
29
Source: Ministry of Construction and Urbanization
* The construction of dwellings in Georgia is mainly based on up-front deposits made by people who will live there after the construction is completed.
According to the table investments in main capital from 1995-2002 constitutes 2396 million Georgian Lari (1109 million USD) which includes: Government investment – 906 million GEL (419 million USD) – 37.8%, personal funds of the population – 335 million GEL (155 million USD) – 14.0%, foreign investment – 1155 million GEL (534 million USD) – (48.2%). Derived from this data we can state that investment in main capital shows a trend toward a positive increase (+2.7) from 1995-2001 compared to 1995. In addition, the increase in foreign investment is quite noticeable. This was mainly due to the construction of the oil pipeline and Supsa oil terminal in 1998.
In 2002 the positive developments in the construction sector continue to accelerate, resulting in construction of 545 buildings, among theses are the construction of a new Marriott hotel, 62 stores, 38 gas stations, and 12 food outlets (all in Tbilisi).
Market demand (Construction Materials). Even though several local construction material manufacturing plants have been restructured and rehabilitated, the goods manufactured by them do not have a high demand among Georgian customers. Mainly this is due to low quality and narrow assortment. The only Georgian made product of comparatively good quality is cement, produced by the Rustavcement and Kaspicement companies. This situation represents a good opportunity for U.S. firms to invest in and/or upgrade local building materials manufacturing plants. Presently, product imported from Turkey, Dubai, Iran and Russia occupies almost 95% of the Georgian building materials market. Even though they are perceived to be of a lower quality, the majority of people still buy them because of the low price. Nevertheless, another Georgian customer segment, the high income family, still prefers building materials made in the U.S. or Europe, due to the high quality and regardless of the higher price.
The following imported materials are in the highest demand on the Georgian market:
· Ceramic Products (tile, mats)
· Insulated American style windows, doors.
· Various colored wood and flooring materials.
· Heat, ventilation, air conditioning systems.
· Roofing materials
· Varnish paints
· Plastic tubes for water communication
· Wallpapers
· Lights and bulbs
· Vinyl sidings
Due to the growing wave of construction, a large market share still remains unoccupied and is ready for new companies and potential investors. The construction sector will play an essential and important role in Georgia’s further economic development and integration into the world economy.
4. Business
4.1 Company Registration and Licensing System
4.1.1 Company Registration System
Enterprise register. Registration of an enterprise is to be carried out by the Court by making due records in the Enterprise Register. The information concerning the registration is to be recorded into the Register Card. The Register Card specimens are presented below:
Registration card (sample) for Limited Liability Companies (LLC)
Ser. No.
Date
Subject of activity and aggregate capital of the society
Name, date and place of birth, occupation, address of partners
Name, date and place of birth, occupation, address of directors
Name, date and place of birth, occupation of members of the supervisory council (if any)
Representation of directors
Trade representatives (procurators)
Registration card (sample) for Joint Stock Companies (JSC)
Ser. No.
Date
Subject of activity and capital
Tapes of shares; sharing
Name, date and place of birth, occupation, address of directors
Name, date and place of birth, occupation address of members of the supervisory council
Representation of directors
Trade representatives (procurators)
The
Law on Entrepreneurs provides that data on newly registered companies should be
published in the official newspaper. The Law also guarantees information on any
company entered into the enterprise register held by courts be available to the
public. Any person should be able to view the records and obtain extracts from
the registration file.
Procedure for registering (establishing) an enterprise. Figure
4.1.1.1 provides an outline of the sequence of the procedures to register and
establish a business in Georgia.
Figure 4.1.1.1 Business Registration Procedures
* Statistical Department registration and stamp approval. Although the law no longer requires these procedures, they are still being followed by some entities and required by certain authorities due to uncertainty, lack of information, and corruption.
In practice, the entire registration process reportedly takes 2 to 3 weeks. However, it is possible to register a company within few days by means of unofficial payments.
Registration with the Local Court. In accordance with the procedures set forth in the Law on Entrepreneurs, all legal businesses are required to register at the local court that has jurisdiction over the legal address of the enterprise. Further, all registered companies are required to officially record any changes in their registration data.
In order to register an LLC, the following documents must be submitted to a local court:
(1) Application form signed by the founders. Application form must include:
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