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RAKIA`S First Freezone in Europe

23.06.2010
The Government of Georgia signed an agreement with Ras Al Khaimah Investment Authority (RAKIA) on the development of a Free Industrial Zone adjacent Georgia s biggest Black Sea port of Poti on April 11, 2008. The agreement was signed by Ms Sharashide, the former Minister of Economic Development of Georgia on behalf of Govt of Georgia and Dr.Khater Massaad on behalf of Rak Investment Authority, Govt.Of Ras Al Khaimah, U.A.E.
 
RAKIA itself as an expert in setting up and running Free Zones has already successfully brought up three Free Zones in the Middle East, and are in the process of setting-up/finalizing two in Africa (Sudan & Tanzania) and one in Asia (India) at present.

Basic Concept of a free-zone is to free an entrepreneur of all restrictions to enable him build world class cost competitive long-time self sustaining business enterprises which can serve customers all over the world and generate direct/indirect economic development in the place of its location. The freedom from restrictions include freedom from taxes / duties, import/export restrictions, local /municipal laws etc. An entrepreneur operating in a Free-zone, can focus full time on his business ,with-out diverting his attention on Tax / Regulatory matters and therefore is able to build business in the shortest possible time and with minimum possible resources. The local economy benefits in the form of generation of local employment , higher out puts in logistics/transportation/port segments with its resultant benefits, revenue on taxes for sales in the local country from the   Free-zone based companies ,skills developments , indirect increase in businesses in the Airlines ,Hotel / Tourism, Retail & Entertainment sectors etc. It also leads to development of ancillary Units and Services outside the Free-zone. Hence , it s a win-win for all stake holders !

Strategic Intent: As an Investor Friendly Company, taking into consideration the needs of EU manufacturers, RAKIA decided to set-up this  ultra modern Free Industrial Zone with state of art facilities right on the Gateway of the East and West – at Poti, Georgia. Georgia as a country and Poti as a destination is strategically located virtually at the center of the historical silk route connecting East and the West. The silk route has been the business corridor for centuries in the past between the businessmen based as far as China,India and South-East Asia and the countries of the E.U. region.

“RAKIA Georgia Free Industrial Zone” LLC has started its operations from June 09 2008. The most modern free industrial zone with the state of art infrastructure and facilities will be the first of its kind not only in Georgia but in the whole region. Its strategic location beside the Poti Sea Port (one of the largest Sea Port on the Black Sea, it is a 150 years old port traditionally serving trade & commerce through Georgia and beyond) almost at the center between Asia and Europe is expected to give the investors tremendous market reach, besides the cost and logistical advantages.

As the Free Zone is situated right next to the Poti Port it gives investors the advantage of lowest cost for import and export due to very low local Logistic/transportation cost (also no taxes are applicable in the Free Zone for import/export of raw materials/goods). The territory is well connected to the railway system and highways to the rapidly growing economies of Turkey, Azerbaijan, Kazakhstan and Russia etc. That makes the zone even more attractive. Also, Poti being located on Black Sea shore, right in the middle of ancient Silk Road is the shortest way from EU to the East.  That will give a Location wise advantage to the East oriented European manufacturers as well as Europe oriented manufacturers from China, India, & the Middle East !Europe based manufacturers considering to shift base due to cost considerations will have an attractive  alternate with almost same cost advantages , as compared to far away places like China / India /Africa etc. Similarly, companies from Asia, Africa and the Middle-East planning to expand businesses in the E U countries can make a low cost base in the proposed Free-zone with all the advantages of operating from Europe!

Good infrastructure facilities (railways, port, telecommunications, Highways/roads); Availability of low cost skilled labor; Pro – Business pro – active Government; Good European living conditions at low cost, low crime rate, good sub-tropical weather, beautiful Mountain Resorts and beaches, places of historical importance, good educational and medical facilities etc. are making Poti Free Industrial Zone one of the most attractive free zones in the whole region.

RAKIA GEORGIA FIZ LLC s vision is to make Poti Free Industrial Zone a global hub of manufacturing and services and an investment destination of choice for the Investors in the region. Create wealth and employment and to facilitate sustainability and profitability for every Investor. Rakia Georgia FIZ LLC will symbolize excellence and ultimate in customer service.  

Our mission is to offer complete “end to end” solutions to the needs of every investor and ensure complete customer satisfaction. Ensure minimum transaction and conversion cost and enable businesses in the quickest possible time. To make investment in  Poti Free-zone simple, easy and a pleasant experience. In doing all these to ultimately achieve the goal of improving the quality of lifestyle in the Poti region in particular and in Georgia in general.

The project is spread over 300 hectares of the land plot and will involve direct investments of more than 400 million USD including the investments in the Poti Sea Port. The services to be provided in the Free-zone include the primary and secondary roads giving complete access to all industrial plots with-in the project area, Street Lighting ,water supply, fire fighting system, sewerage network, storm-water drainage system, electric supply and telecommunication system and irrigation network for green-zone areas. The design criteria for each segment of development of infrastructure will be as per the International Specifications to ensure that the Free-zone facilities are comparable to the best in the world. A project presentation ceremony was held on 13th of March 09 attended by the President of Georgia Honorable Mr. Mikheil Saakashvili along with other senior officials of the Georgian Government and the CEO of RAKIA Dr. K.M. Massaad. The first investors were awarded with Poti FIZ license officially by the President of the State. RAKIA GEORGIA FIZ LLC Has already received investments from Companies in Azerbaijan , Armenia , Turkey, UAE, Ukraine, Iran besides Georgia and have issued Licenses to them.

Poti Free Industrial Zone is expecting to have the investors from different fields of industries. Such as: Small & Medium Scale Enterprises, High Technology Industries, Bio-tech Companies, Companies from the building materials and engineering industries, Enterprises from the FMCG & FMCD industries etc. RAKIA GEORGIA FIZ LLC expects Media, IT, BPO Services will be represented at the Free Zone as well. Also due to low cost of energy power intensive industries like steel manufacturers have also shown keen interest to be in this Free-zone.

At present successful companies as: Aray Tomorrow (LG Products, Georgia), Zamil Steel (Saudi Arabia), Azersun Holding (Azerbaijan), Multi Group (Armenia) JBF (India), Pran Foods (Bangladesh), Ghani Glass (Pakistan), Tegetta Motors (Georgia),  Mercury Holding (Iran), Vestel (Turkey) and etc.  has confirmed their interest and intentions to come to Poti FIZ.

RAKIA GEORGIA FIZ LLC also plans to set-up an offshore financial centre in the Free-zone in second phase which will offer all offshore financial services to the investors from all over the world.

Poti FIZ will be officially inaugurated in June 2010 after completion of the first phase of the construction of infrastructure.

Competitive advantage---Poti Free Industrial Zone(Why Georgia? Poti FIZ?)
    Strategic Location
-    First Free Industrial Zone in the Caucasus Region.
-    Located on the gateway of ancient Silk Road connecting west and east and vice versa.
-    Wide access to the EU&CIS with over 1 billion population market.
-    Free Trade Agreements of Georgia with 26 countries.
-    Strategic oil and gas corridor
    Economic Factors
-    0 Score in difficulty of the hiring and firing indices in the 2008 World Bank Doing Business Survey – one of the best Labor Codes in the world.
-    #1 Reformer in the world in 2006 (according to World Bank Doing Business Survey 2007)
-    460% Increase in budget revenues since 2003
-    7,200 Categories of goods Georgia can export duty- and tariff-free to EU & Turkey under the GSP+ regime.  The only country, other than Moldova, to have such facility.  The GSP Plus regime has been further extended recently. 
    RAK Investment Authority – Experienced developer and manager of several Free Zones in different parts of the world.
-    RAKIA has wide expertise in developing free zones consisting of three business parks in trading and services, heavy industries and warehousing and in manufacturing. With more than 2000 registered companies and trade turnover of around USD 8 billion within last few years.
    Easy business set-up
-    Simplified licensing procedures (License is issued within 24 hours after the application is received)
-    “One Stop Shop” system (all necessary procedures are conducted at one spot)
    Operational advantages
-    World class Infrastructure
-    Offer complete “end to end” solutions to the needs of every investor and ensure complete customer satisfaction. Efficient services
-    Located next to Poti Port—low supply chain cost.
-    Low Licensing and plot leasing tariffs.
-    Low cost of skilled labor.
-    Low cost of utilities. Low energy cost (Hydro-electric power)
-    Low housing costs.
    Investor friendly environment, transparent laws and regulations
-    The laws are in force that creates the easy conditions for the companies for easy start-up and operation of their businesses. The government is also open to suggestions from the investors to amend the laws for the benefit of all stakeholders.

    Minimum transaction and conversion cost, efficient international banking services. Safe living conditions.

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