The automotive business is an important part of Georgia’s economy. Successful reforms have enabled Georgia to become car exporter without its own car production. Georgia imports cars from various countries and re-exports them to neighboring markets. This in turn led to the development of a strong domestic auto parts and repair & maintenance services industries as the imported vehicles are mostly used and require repair before being sold in the domestic and external markets. Furthermore, Georgia has rich history of manufacturing of auto, aircraft and locomotive products. During Soviet Union period, several manufacturing companies operated in Tbilisi and Kutaisi. Since the collapse of the Soviet Union, these enterprises redesigned the operating activities via manufacturing various machinery and spare parts, and currently manufacture agricultural machinery, ropeway, railway and mining products, electric locomotives, aircrafts and parts, military products etc. In the recent years, Georgia saw gradual revival of Aerospace Industry. Aero-Structure Technologies Cyclone (ATC), joint venture between the Israeli company Elbit Systems and the Georgian state-owned “Partnership Fund”, opened a production facility for composite aircraft parts in Georgia in 2018. ATC produces composite parts for the major players in the industry such as Boeing and exports products to various markets. Georgia is the only country in the region with Free Trade Agreements with the European Union, EFTA, Turkey, Ukraine, China (including Hong- Kong) and CIS providing excellent opportunities for exporting auto and aircraft parts and components from Georgia to 2.3 billion consumer markets without Customs Duty. Georgia offers skilled and competitively priced labor force - average monthly salary in automotive industry ranges between USD270–USD740 in Georgia. Vocational education for specialists in the industry are available in 7 cities of Georgia. Vocational Educational Institutions can provide customized short-term training courses per investor’s request and trainings are mainly financed by the Government. During the past 5 years, 120 961 students graduated from bachelor, master and professional programs, while 25 902 students graduated from the field of Science, Engineering, manufacturing and construction. Unemployment rate was 12.9% in 2019 and while total workforce amounts to 1.9 million, 48% of workforce is 45 years old or younger, which means that young workforce is available on the market. The territory of Georgia is rich in deposits of copper, manganese and lead ore. In addition, some other raw materials such as plastic, steel, aluminum, nickel and lithium are available in neighboring countries with which Georgia has 0% import tax.

Electronics manufacturing sector in Georgia is still nascent, but it is growing at a strong pace. Along with Georgian companies, which produce semiconductors, home appliances and other machineries, several major technologically advanced investments have been made in Georgia in recent years, including German AE Solar and French Groupe Atlantic, underlying the availability of skills and connectivity, which is so important for competitive supply chains. Consumption of electronics in Georgia and neighboring countries is expanding as well. Over the last 5 years, consumption and import of electronics and appliances in the Caucasus has been increasing at 5 % CAGR, while the export of electronics increases by CAGR 18 % and export of machinery and appliances by CAGR 28 % respectively. Georgia is the only country in the region with Free Trade Agreements with the European Union, EFTA, Turkey, Ukraine, China (including Hong- Kong) and CIS providing excellent opportunities for exporting electronic products from Georgia to 2.3 billion consumer markets without Customs Duty.

Strategically located linking Europe with Asia, BioPharma companies in Georgia find that the combination of short start-up timelines with low overheads enhance cost efficiencies while the cadre of world-class physicians and exceptional business environment sustains competitiveness Key Advantages of Georgia in Biopharma Sector: • Short and streamlined start-up procedures (<3 months) • Well-developed local industry • Fast and smooth import / export process • High quality of data accepted and validated by FDA inspections • Georgian Products approved by EMA, CIS and MENA regulatory bodies • Transparent regulatory requirements Pharmaceutical and Life Science Sector growing at a strong pace in Georgia and neighboring countries. Import of Pharmaceutical Products in Caucasus amounted 6.7 bln USD between 2016-2019, while Export of Pharmaceutical Products from Georgia amounted only 0.6 bln USD. Besides, 70 Manufacturers and 1,367 Pharmaceutical Products are produced in Georgia and over 13,000 employees in the sector. Over the last 5 years, export of pharmaceuticals from Georgia has been increasing at 21 % CAGR. Georgia offers young, skilled and competitive talent pool for Pharmaceutical Industry. During the past 5 years, 120 961 students graduated from bachelor, master and professional programs, while 27,477 from Science and Social Welfare programs. While total workforce amounts to 1.9 million, 48% of workforce is 45 years old or younger, which means that young workforce is available on the market. Georgia is the only country in the region with Free Trade Agreements with the European Union, EFTA, Turkey, Ukraine, China (including Hong- Kong) and CIS providing excellent opportunities for exporting electronic products from Georgia to 2.3 billion consumer markets without Customs Duty Additionally, companies in Georgia can benefit from growth friendly Tax Environment and low utility costs. Georgia is the 3rd least tax-burdened countries in the world (World Bank). Reinvested profit is free from profit tax, personal Income Tax is one of the lowest in the world, at 20% and the pension contribution is just 2% for the Employer (2% paid by Employee). 80% of goods free from import tariff in Georgia. Georgia also offers four Free Industrial Zones (FIZ) – where, company producing goods for export is exempt from all taxes except (personal income tax). Up to 80% of power is generated via hydro and wind power plants, leading to greener and cheaper energy. 1 kWh of high voltage electricity costs about 7 USD cents.

Georgia has a rich history of manufacturing apparel, footwear, bags and other leather products, dating back to 60s and 70s. Contract manufacturing of apparel is well developed in Georgia and existing factories produce apparel for famous international brands, such as M&S, Moncler, Nike, Adidas, Zara, Puma, HM, etc. Largest companies in the industry are engaged in Cut, Make, Trim (CMT) operations. Footwear and bags manufacturing sector has emerged recently as local manufacturers started to export their products to different international markets. Leather production is also developing and currently Georgian leather is exported to Italy and Turkey. Georgia Free Trade Agreements with strategic markets, such as EU, Turkey, China (including Hong Kong), CIS and EFTA countries. These preferential trade agreements offers a possibility to save up to 17-30% of customs duty on footwear & bags originated in Georgia (otherwise amounts up to 17% for EU and Turkey, and up to 30% for CIS countries). Georgia offers young, skilled and inexpensive labor pool - average monthly salary in apparel and footwear manufacturing is USD 267 in 2020. Unemployment rate was 12.9% in 2019 and while total workforce amounts to 1.9 million, 48% of workforce is 45 years old or younger, which means that young workforce is available on the market. 12 State owned Vocational Educational Institutions operate around Georgia providing professional courses in cutting, sewing, shoemaking and other practical subjects used in the industry. Most of the fees for courses are financed by the Government of Georgia, and in case of investor’s request, customized training is available for new companies/factories