Alexander BolkvadzeAlexander BolkvadzePartnerPartner

BLCBLCProfessional Legal ServicesProfessional Legal Services

alex.bolkvadze@blc.gealex.bolkvadze@blc.ge

► Founded: 1999Founded: 1999► Field of Legal Practice: General Corporate and Commercial PracticeField of Legal Practice: General Corporate and Commercial Practice► Composition: 3 Partners; 10 Associates; 2 Tax AdvisersComposition: 3 Partners; 10 Associates; 2 Tax Advisers► Education: Local universities + foreign (US, Europe) LLMEducation: Local universities + foreign (US, Europe) LLM► Languages: Georgian, Russian, English, German, FrenchLanguages: Georgian, Russian, English, German, French► Clientele: mix of foreign and domestic clientsClientele: mix of foreign and domestic clients► Membership: AmCham, ICC, Employers’ association Membership: AmCham, ICC, Employers’ association

► References:References:

► This well organized Georgian practice has an excellent reputation in the market, acting This well organized Georgian practice has an excellent reputation in the market, acting for mix of international and domestic clients on a full range of corporate and commercial for mix of international and domestic clients on a full range of corporate and commercial matters . . . .matters . . . .

(Chambers Europe, 2007, Georgia)(Chambers Europe, 2007, Georgia)

► Described as having the ingredients of a very good practice. BLC is a three partner firm Described as having the ingredients of a very good practice. BLC is a three partner firm with a practice that covers insurance and banking, telecoms, international trade, energy, with a practice that covers insurance and banking, telecoms, international trade, energy, oil and gas, agriculture, aviation, NGO’s and infrastructure development.oil and gas, agriculture, aviation, NGO’s and infrastructure development.

(Legal 500, 2007, Georgia)(Legal 500, 2007, Georgia)

Legal ProfessionLegal Profession

► Statutory requirement:Statutory requirement: Georgian CitizenshipGeorgian Citizenship Legal EducationLegal Education Passing Bar ExamPassing Bar Exam Obedience of Norms of EthicsObedience of Norms of Ethics

► Georgian Bar AssociationGeorgian Bar Association:: Bar Exams 2 times per yearBar Exams 2 times per year Disciplinary SanctionsDisciplinary Sanctions

► Organizational Form:Organizational Form: Limited Partnership (LP) – at least one partner shall fully Limited Partnership (LP) – at least one partner shall fully

be liablebe liable Insurance on Professional Liability is not practicedInsurance on Professional Liability is not practiced

8 Main Reasons to Invest in 8 Main Reasons to Invest in GeorgiaGeorgia

► 1.1. The World’s Number 1 Reformer; The World’s Number 1 Reformer; ► 2.2. Corruption Free Environment;Corruption Free Environment;► 3.3. Modern Legal System;Modern Legal System;► 4.4. Low Taxes;Low Taxes;► 5.5. Aggressive Privatization Policy; Aggressive Privatization Policy; ► 6.6. Most Liberal Labor Code; Most Liberal Labor Code; ► 7.7. Simplified Licensing and Permitting Simplified Licensing and Permitting

Procedures;Procedures;► 8.8. Competitive Trade Regimes. Competitive Trade Regimes.

The World’s Number 1 The World’s Number 1 ReformerReformer

  ► The World Bank'sThe World Bank's Doing Business in 2007Doing Business in 2007 report ranked report ranked

Georgia as # 1 reformer in the world in improving the Georgia as # 1 reformer in the world in improving the ease of doing business. Georgia jumped 75 places ease of doing business. Georgia jumped 75 places ahead, moving from 112th to 37th place out of 175 ahead, moving from 112th to 37th place out of 175 countries surveyed;countries surveyed;

► Heritage Foundation's Index of Economic Freedom for Heritage Foundation's Index of Economic Freedom for

20072007,, Georgia ranks 35th out of 161 countries. Georgia Georgia ranks 35th out of 161 countries. Georgia scored above world average in 7 out of 10 indicators, scored above world average in 7 out of 10 indicators, with particularly high ratings in business freedom, fiscal with particularly high ratings in business freedom, fiscal freedom, freedom from government, and labor freedom. freedom, freedom from government, and labor freedom. Georgia's overall rank is expected to improve even more Georgia's overall rank is expected to improve even more in 2008. in 2008.

Corruption Free EnvironmentCorruption Free Environment

► The World Bank and EBRDThe World Bank and EBRD report that the report that the percentage of firms that identified corruption percentage of firms that identified corruption as a significant obstacle fell from 60% to as a significant obstacle fell from 60% to 39% from 2002 to 2005, and the percentage 39% from 2002 to 2005, and the percentage of firms that paid bribes during tax collection of firms that paid bribes during tax collection fell from 44% to 11% from 2002 to 2005.fell from 44% to 11% from 2002 to 2005.

► 95 % of Georgians surveyed said they had 95 % of Georgians surveyed said they had not paid a bribe to receive a public service in not paid a bribe to receive a public service in the last 12 months according to a February the last 12 months according to a February 2007 2007 International Republican Institute PollInternational Republican Institute Poll. .

Modern Legal SystemModern Legal System

► Modern laws and regulations, all spheres are covered;Modern laws and regulations, all spheres are covered;

► Easy to register business, takes 3-4 days;Easy to register business, takes 3-4 days;

► Law on Promotion & Guarantees of Foreign Investors, Law on Promotion & Guarantees of Foreign Investors, GNIA;GNIA;

► Enforcement of Foreign Arbitration Awards;Enforcement of Foreign Arbitration Awards;

► No restrictions on Profit Repatriation and Money No restrictions on Profit Repatriation and Money Transfer.Transfer.

Low TaxesLow Taxes► In 2005, Georgia enacted a new Tax In 2005, Georgia enacted a new Tax

Code:Code:

The total number of taxes was reduced from The total number of taxes was reduced from 21 to only 7. Georgia has Lowest Total Tax 21 to only 7. Georgia has Lowest Total Tax Rate in the Region;Rate in the Region;

► Personal Income Tax - 12%;Personal Income Tax - 12%;► Corporate Profit Tax - 20%; Corporate Profit Tax - 20%; ► VAT - 18%;VAT - 18%;► Social tax of 20%;Social tax of 20%;► Property Tax Property Tax ► Excise Excise ► Customs Tax – 0%, 5%, 12%Customs Tax – 0%, 5%, 12%

Growing double taxation treaty network:Growing double taxation treaty network:

► Entered in force with 19 countriesEntered in force with 19 countries► Negotiations underway with 14 countries.Negotiations underway with 14 countries.

Aggressive Privatization Aggressive Privatization PolicyPolicy

► The Government of Georgia received $297 million USD The Government of Georgia received $297 million USD from the privatization process in 2006.from the privatization process in 2006.

► Key features of Georgia's privatization policy include:Key features of Georgia's privatization policy include:

► Flexibility - Use of Various Methods of Sale: Flexibility - Use of Various Methods of Sale: tender, auction, lease-redemption and direct sale. tender, auction, lease-redemption and direct sale.

► Transparency Transparency A special web-site, A special web-site, http://www.privatization.ge/http://www.privatization.ge/, has been created , has been created

to provide privatization related information. to provide privatization related information.

► Fairness - Equal Opportunities for all Potential BuyersFairness - Equal Opportunities for all Potential Buyers

► Investor - initiated privatizationInvestor - initiated privatization

Most Liberal Labor CodeMost Liberal Labor Code  ► Georgia's  new Labor Code has been hailed as one Georgia's  new Labor Code has been hailed as one

of the world's best;of the world's best; ► The Heritage Foundation ranks Georgia 1st in the The Heritage Foundation ranks Georgia 1st in the

world in the Labor Freedom category of the Index of world in the Labor Freedom category of the Index of Economic Freedom, and the World Bank ranks Economic Freedom, and the World Bank ranks Georgia 6th in the world on the Employing Workers Georgia 6th in the world on the Employing Workers indicator of its Doing Business Survey;indicator of its Doing Business Survey;

► Terms & Conditions are defined in the Employment Terms & Conditions are defined in the Employment Contract, few statutory limitations;Contract, few statutory limitations;

► ““Termination at will”Termination at will”

Simplified Licensing and Simplified Licensing and Permitting ProceduresPermitting Procedures

► ... Shorter time limits were imposed for issuing permits. ... Shorter time limits were imposed for issuing permits. Several procedures were abolished ... It is now as easy to Several procedures were abolished ... It is now as easy to comply with building regulations in Tbilisi as it is in Hong comply with building regulations in Tbilisi as it is in Hong Kong.Kong.

World Bank Doing Business in 2007World Bank Doing Business in 2007

► The total number of licenses and permits was reduced by The total number of licenses and permits was reduced by 84%. That , in reforms that eliminated 756 licenses and 84%. That , in reforms that eliminated 756 licenses and permits and streamlined procedures. permits and streamlined procedures.

► Licenses and permits may be required only for: Licenses and permits may be required only for: Safety and health protection Safety and health protection Security of living conditions and cultural environment of Security of living conditions and cultural environment of

individuals individuals

► Reduced statutory time limits for government action: 30 days Reduced statutory time limits for government action: 30 days for issuing licenses and 20 days for issuing permits.for issuing licenses and 20 days for issuing permits.

► "Silence is consent" "Silence is consent"

Competitive Trade RegimesCompetitive Trade RegimesAmong the key features of Georgia's progressive trade policy are the following:Among the key features of Georgia's progressive trade policy are the following:

► Low Import TariffsLow Import Tariffs: Import tariffs have been abolished on almost 90% of goods, and only three low rates : Import tariffs have been abolished on almost 90% of goods, and only three low rates remain (0%, 5% and 12%). remain (0%, 5% and 12%).

► No quantitative restrictions (quotas) on imports or exportsNo quantitative restrictions (quotas) on imports or exports

► Equal VAT on imported and local goodsEqual VAT on imported and local goods

► Equal excise tax on most imported and local goodsEqual excise tax on most imported and local goods

► Georgia offers a number of favorable trade regimes that make it an attractive production platform to serve Georgia offers a number of favorable trade regimes that make it an attractive production platform to serve other markets. other markets.

► MFN Tariffs with WTO MembersMFN Tariffs with WTO Members: Most of Georgia's trade partners are members of the World Trade : Most of Georgia's trade partners are members of the World Trade Organization (WTO). Trade relations with them are based on Most Favored Nation (MFN) trade status, which Organization (WTO). Trade relations with them are based on Most Favored Nation (MFN) trade status, which provides lower tariffs for WTO members. provides lower tariffs for WTO members.

► Preferential Tariffs with the USA, Canada, Switzerland and JapanPreferential Tariffs with the USA, Canada, Switzerland and Japan: Georgia benefits from a Generalized : Georgia benefits from a Generalized System of Preferences (GSP).System of Preferences (GSP).

► GSP Plus with the EU and TurkeyGSP Plus with the EU and Turkey: Georgia is one of the only two CIS beneficiaries (besides Moldova) of : Georgia is one of the only two CIS beneficiaries (besides Moldova) of the new EU GSP Plus trading regime, and one of only 15 beneficiaries worldwide. GSP Plus status allows the new EU GSP Plus trading regime, and one of only 15 beneficiaries worldwide. GSP Plus status allows Georgia to export 7200 products to the 495 million EU market duty free. From January 2006, Georgia also Georgia to export 7200 products to the 495 million EU market duty free. From January 2006, Georgia also enjoys GSP Plus status with Turkey as well. enjoys GSP Plus status with Turkey as well.

► Free Trade with CIS CountriesFree Trade with CIS Countries: Georgia has a free trade regime with CIS countries resulting in duty free : Georgia has a free trade regime with CIS countries resulting in duty free trade of goods and services. CIS countries account for 39% of Georgia's foreign trade turnover, and 40% of trade of goods and services. CIS countries account for 39% of Georgia's foreign trade turnover, and 40% of Georgia's exports are to these markets.Georgia's exports are to these markets.