Page 55 - GEORptDec20

Air Georgia to launch passenger transport services, possibly low-cost
Freight tariffs are set in US dollars, resulting in natural hedge for a company that operates in a country with a dollarised economic environment,” Fitch said. The ratings agency considered a potential default of GR on external obligations as potentially harmful to Georgia, as it could lead to reputational risk for the state.
“Both GR and the state tap international capital markets for debt funding, as well as loans and financial aid from IFIs. This leads us to assume that a default of GR could negatively influence the cost of external funds for future debt financing of other GREs or the state itself. It could also significantly impair the borrowing capacity of the latter due to potential reputational damage and the small size of the domestic economy,” Fitch Ratings said.
Giorgi Kodua, founder of the Hub Georgia organisation that addresses transport issues, has confirmed that his cargo carrier Air Georgia will receive its first Airbus A320 passenger aircraft on October 20 as it moves into passenger transport.​ Another such aircraft is expected within a month, with two more to arrive in December and March, respectively.
“The planes are new and are currently in the United States,” Kodua said in September when he announced his intentions for the first time. “[N]egotiations are underway with the investor,” he said at that time.
Air Georgia will operate as a low-cost carrier, charging fares even lower than those charged by Wizzair according to Kodua, but only if Georgian airports offer the same terms as they offer to Wizz Air, he stressed.
"As you know, we are negotiating with the government and if Kutaisi Airport gives us the same conditions as Wizz Air has, then after registering the plane, we will transfer it to Kutaisi and start flights from there," said Kodua.
However, if the state does not award Air Georgia conditions similar to those enjoyed by Wizz Air, the company will continue flights from Tbilisi at normal prices, he added.
9.2.2 ​TMT corporate news
US software developer EPAM sets up office in Georgia
American software development company EPAM has arrived on the Georgian market, Georgia’s economy minister Natia Turnava has announced.
Turnava said EPAM was attracted by state incentives for foreign investors in the IT and maritime services sectors.
"The government has introduced a special regime for IT companies. We already have the first positive feedback. This major US IT company has entered Georgia, and it has decided to open an office and locate part of its business to this country. The company's plans include creating at least 1,000 high-paying jobs in Georgia," Turnava added.
EPAM has operations in more than 30 countries and a workforce of more than 35,000.
Companies that offer IT and maritime services—namely shipping, logistics and trading enterprises—will enjoy favourable terms of taxation in Georgia if they are recorded as having an international status, Georgian finance minister Vano Matchavariani said back on October 8.
To be granted that status in Georgia, it is necessary for a company offering IT or maritime services to be registered in Georgia and to operate for at least two years in the country.
After obtaining the status, the company will enjoy reduced property (but not land), profit and income taxes, with profit and income taxes reduced to 5%. They will also be entitled to full exemption from dividend taxes.
55​ GEORGIA Country Report ​December 2020 ​ ​www.intellinews.com