Alexander Bolkvadze Partner BLC Professional Legal Services alex.bolkvadze@blc.ge

1. Alexander Bolkvadze Partner BLC Professional Legal Services alex.bolkvadze@blc.ge

2. Founded: 1999 • Field of Legal Practice: General Corporate and Commercial Practice • Composition: 3 Partners; 10 Associates; 2 Tax Advisers • Education: Local universities + foreign (US, Europe) LLM • Languages: Georgian, Russian, English, German, French • Clientele: mix of foreign and domestic clients • Membership: AmCham, ICC, Employers’ association • References: • 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 matters . . . . (Chambers Europe, 2007, Georgia) • 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, oil and gas, agriculture, aviation, NGO’s and infrastructure development. (Legal 500, 2007, Georgia)

3. Legal Profession • Statutory requirement: • Georgian Citizenship • Legal Education • Passing Bar Exam • Obedience of Norms of Ethics • Georgian Bar Association: • Bar Exams 2 times per year • Disciplinary Sanctions • Organizational Form: • Limited Partnership (LP) – at least one partner shall fully be liable • Insurance on Professional Liability is not practiced

4. 8 Main Reasons to Invest in Georgia • 1. The World’s Number 1 Reformer; • 2. Corruption Free Environment; • 3. Modern Legal System; • 4. Low Taxes; • 5. Aggressive Privatization Policy; • 6. Most Liberal Labor Code; • 7. Simplified Licensing and Permitting Procedures; • 8. Competitive Trade Regimes.

5. The World’s Number 1 Reformer • The World Bank'sDoing Business in 2007 report ranked Georgia as # 1 reformer in the world in improving the ease of doing business. Georgia jumped 75 places ahead, moving from 112th to 37th place out of 175 countries surveyed; • Heritage Foundation's Index of Economic Freedom for 2007, Georgia ranks 35th out of 161 countries. Georgia scored above world average in 7 out of 10 indicators, with particularly high ratings in business freedom, fiscal freedom, freedom from government, and labor freedom. Georgia's overall rank is expected to improve even more in 2008.

6. Corruption Free Environment • The World Bank and EBRD report that the percentage of firms that identified corruption as a significant obstacle fell from 60% to 39% from 2002 to 2005, and the percentage of firms that paid bribes during tax collection fell from 44% to 11% from 2002 to 2005. • 95 % of Georgians surveyed said they had not paid a bribe to receive a public service in the last 12 months according to a February 2007 International Republican Institute Poll.

7. Modern Legal System • Modern laws and regulations, all spheres are covered; • Easy to register business, takes 3-4 days; • Law on Promotion & Guarantees of Foreign Investors, GNIA; • Enforcement of Foreign Arbitration Awards; • No restrictions on Profit Repatriation and Money Transfer.

8. Low Taxes • In 2005, Georgia enacted a new Tax Code: • The total number of taxes was reduced from 21 to only 7. Georgia has Lowest Total Tax Rate in the Region; • Personal Income Tax - 12%; • Corporate Profit Tax - 20%; • VAT - 18%; • Social tax of 20%; • Property Tax • Excise • Customs Tax – 0%, 5%, 12% • Growing double taxation treaty network: • Entered in force with 19 countries • Negotiations underway with 14 countries.

9. Aggressive Privatization Policy • The Government of Georgia received $297 million USD from the privatization process in 2006. • Key features of Georgia's privatization policy include: • Flexibility - Use of Various Methods of Sale: • tender, auction, lease-redemption and direct sale. • Transparency • A special web-site, http://www.privatization.ge/, has been created to provide privatization related information. • Fairness - Equal Opportunities for all Potential Buyers • Investor - initiated privatization

10. Most Liberal Labor Code • Georgia's  new Labor Code has been hailed as one of the world's best; • The Heritage Foundation ranks Georgia 1st in the world in the Labor Freedom category of the Index of Economic Freedom, and the World Bank ranks Georgia 6th in the world on the Employing Workers indicator of its Doing Business Survey; • Terms & Conditions are defined in the Employment Contract, few statutory limitations; • “Termination at will”

11. Simplified Licensing and Permitting Procedures • ... Shorter time limits were imposed for issuing permits. Several procedures were abolished ... It is now as easy to comply with building regulations in Tbilisi as it is in Hong Kong. World Bank Doing Business in 2007 • The total number of licenses and permits was reduced by 84%. That , in reforms that eliminated 756 licenses and permits and streamlined procedures. • Licenses and permits may be required only for: • Safety and health protection • Security of living conditions and cultural environment of individuals • Reduced statutory time limits for government action: 30 days for issuing licenses and 20 days for issuing permits. • "Silence is consent"

12. Competitive Trade Regimes Among the key features of Georgia's progressive trade policy are the following: • Low Import Tariffs: Import tariffs have been abolished on almost 90% of goods, and only three low rates remain (0%, 5% and 12%). • No quantitative restrictions (quotas) on imports or exports • Equal VAT on imported and local goods • Equal 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 other markets. • MFN Tariffs with WTO Members: 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 provides lower tariffs for WTO members. • Preferential Tariffs with the USA, Canada, Switzerland and Japan: Georgia benefits from a Generalized System of Preferences (GSP). • GSP Plus with the EU and Turkey: 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 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. • Free Trade with CIS Countries: 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 Georgia's exports are to these markets.