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Private sector and human-resource development in Georgia

Private sector and human-resource development in Georgia

TBILISI, GEORGIA

Currency Unit = Georgian Lari (GEL)

1 USD = 2.11 GEL

Abbreviations and Acronyms

CAS

Country Assistance Strategy of the World Bank

CFAA

Country Financial Accountability Assessment

CIS

Commonwealth of Independent States

CPIA

Country Policy and Institutional Assessment

DFID

Department for International Development, U.K.

EBRD

European Bank for Reconstruction & Development

EDPRP

Economic Dev’t & Poverty Reduction Program

EU

European Union

FAO

Food and Agriculture Organization

FDI

Foreign Direct Investment

FIAS

Foreign Investment Advisory Service

FSAP

Financial Sector Assessment Program

FSU

Former Soviet Union

FY

Fiscal Year

GDP

Gross Domestic Product

GEL

Georgian Lari

GNP

Gross National Product

GoG

Government of Georgia

GSE

Georgian Stock Exchange

GTZ

German Technical Cooperation

IDA

International Development Association

IDF

Institutional Development Fund

IDP

Internally Displaced Persons

IFC

International Finance Corporation

IMF

International Monetary Fund

IOSCO

The International Organization of Securities Commissions

JSC

Joint Stock Company

KfW

German Financial Cooperation


1. Government Policies

LLC

Limited Liability Company

MDGs

Millennium Development Goals

MoF

Ministry of Finance

NBG

National Bank of Georgia

NGO

Non-Governmental Organization

NBG

National Bank of Georgia

NGO

Non-Governmental Organization

OECD

Organization For Economic Coop’n & Development

PER

Public Expenditure Review

PPP

Purchasing Power Parity

PRGF

Poverty Reduction and Growth Facility

PRSP

Poverty Reduction Strategy Paper

SAC

Structural Adjustment Credit

SATAC

Structural Adjustment Technical Assistance Credit

SEC

Security and Exchange Commission

SIDA

Swedish International Development Agency

SIF

Social Investment Fund

SME

Small and Medium Enterprises

SRS

Structural Reform Support Project

TACIS

Technical Assistance to the CIS (EU)

UNDP

United Nations Development Program

UNHCR

United Nations High Commissioner for Refugees

USAID

United States Agency for International Development

VAT

Value Added Tax

WTO

World Trade Organization

Wine Market in Japan

1.

Market Overview

1.1

Market conditions

1.2

Trends in local production

1.3

Wine imports

1.4

Consumption trends

2.

Import regulations

2.1

Import restrictions and application procedures

2.2

Labelling requirements

2.3

Tariff rates

3.

Distribution Channels

4.

Consumption trends

4.1

Prices

4.2

Wine categories

4.3

Japanese consumption traditions

5.

Market Entry

5.1

Entering Japanese market

5.2

Wine sales promotion strategies

6.

Annexes

. The International Monetary Fund has outlined a refund strategy that includes limiting entitlement to immediate refunds, distinguishing claimants with a history of compliance, and using pre-refund audits for high-risk refund claims and post-refund audits for claims of lesser risk.

. The International Monetary Fund has outlined a refund strategy that includes limiting enh1ment to immediate refunds, distinguishing claimants with a history of compliance, and using pre-refund audits for high-risk refund claims and post-refund audits for claims of lesser risk.

Mineral Waters in Japan

1.

Market Overview

1.1

Supply Trend

1.2

Import Trend

2.

Import System and Regulations

2.1

Imports Regulated by Food Sanitation Law

2.2

Tariff rates

2.3

Classification of Mineral Water

2.4

Labelling requirement and a labelling sample

2.5

Outline of Container/Packing Recycling Law

2.6

International Standards for Mineral Waters

3.

Distribution

3.1

Distribution Routes

3.2

The Function of Wholesalers

3.3

Distribution Expenses

3.4

Sales Promotions

4.

Consumption trends as shown by survey of retailers and consumers

4.1

Consumption trends seen in retailers

4.2

Trends revealed by consumer research

5.

Current Sales and consumption and future prospects

5.1

Current sales and consumption

5.2

Future prospects

6.

Advise on Accessing the Japanese Market

Appendix

1

Outline of provisions on mineral water provided for under the Foods Sanitation Law

2

Example Retail Price of Mineral Water

3

Selected domestic Suppliers and Importers

4

Wholesalers, Distribution Agents

5

Relevant Organization

6

Exhibitions and Trade Fair

Amount of taxable income during the tax year

Tax rate

Up to 200 GEL

12% of the taxable income

201 to 350 GEL

24 GEL + 15% of the amount in excess of 200 GEL

351 to 600 GEL

46.5 GEL + 17% of the amount in excess of 350 GEL

More than 600 GEL

89 GEL + 20% of the amount in excess of 600 GEL

Group

Types of Fixed Assets

Percentage Depreciation

1

Passenger automobiles, automobile and tractor equipment for use on roads, special instruments, miscellaneous accessories, computers, peripherals and equipment for data processing and storage.

20

2

Automotive transport, trucks, buses, special automobiles and trailers, machines and equipment for all sectors of industry and the foundry industry, forging and pressing equipment, electronic equipment, construction equipment, agricultural machines and equipment, office furniture.

15

3

Railway, sea, and river transport vehicles; power machines and equipment; turbine equipment; electric motors and diesel generators; electricity transmission and communication facilities; pipelines.

8

4

Buildings and structures

7

5

Assets subject to depreciation not included in other groups.

10

. This tax is imposed on the transfer of real estate located in Georgia, inheritances and gifts, and the transfer of motor vehicles. The transferee is subject to the tax. Transfers of title, as well as certain leases of real estate are taxable.

. This tax is imposed on the transfer of real estate located in Georgia, inheritances and gifts, and the transfer of motor vehicles. The transferee is subject to the tax. Transfers of h1, as well as certain leases of real estate are taxable.

For property received as inheritance, the tax is due no later than 6 months from the receipt of documents transferring title. For property received as gifts, the tax is due within 1 month of the transfer.

For property received as inheritance, the tax is due no later than 6 months from the receipt of documents transferring h1. For property received as gifts, the tax is due within 1 month of the transfer.

· A general shareholders' meeting is entitled to elect the supervisory board members, make amendments into the charter of the company, approve the annual report presented by the company directors, elect auditors and so on;

· A general shareholders' meeting is enh1d to elect the supervisory board members, make amendments into the charter of the company, approve the annual report presented by the company directors, elect auditors and so on;

Taxpayers

Taxes Paid by Employers and Entrepreneurs

Taxes Paid by Employees

Social Tax

Employment Tax

Social security Tax

Physical person entrepreneurs and legal persons who pay wages to employees.

27%; not less than 16 GEL per month

1%

Physical persons who receive remuneration as employees or on a contract basis.

1%

Physical person entrepreneurs.

27%, not less than 16 GEL per month

1%

Physical persons who carry out non-entrepreneurial economic activities in Georgia.

27%, not less than 16 GEL per month

1%

OECD Principles of Corporate Governance

O

LO

MNO

NO

NA

Comments

Principle 1

X

Difficult to access the records of the court enterprise registers and uncertainties in knowing if shareholders are sharing in company’s profits

Principle 2 - Fundamental corporate changes.

X

Principle 3 - Shareholder meetings.

X

Not uncommon practice of failing to hold the required shareholders’ meetings

Principle 4 - Proportionate control.

X

Principle 5 - Markets for corporate control.

X

Limited by low liquidity in stock market

Principle 6 - Equal treatment of shareholders.

X

Effective redress requires review under a court system that is heavily overburdened and has not yet made any decisions on similar cases

Principle 7 - Procedures for shareholder meetings.

X

Principle 8 - Insider trading.

X

Effectiveness of legal restrictions limited by low liquidity of the stock exchange and small size of the business community

Principle 9 - Insider disclosure.

X

Minor role played by supervisory boards in the strategic guidance of companies

Principle 10 - Rights of stakeholders.

X

Principle 11 - Corporate disclosure.

X

Less than complete disclosure by most reporting companies, particularly of financial and operating results

Principle 12 - Accounting and auditing.

X

Weak auditing practices and an audit law that allows liability to be capped in the contract between the company and the auditor

Principle 13 - (Supervisory) Board responsibilities.

X

Absence of detailed guidelines for supervisory boards

 

 

 

 

 

 

 

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IOSCO Principles for Securities Regulation

C

PC

MNC

NC

NA

Comments

Principle 1

X

Principle 2 - Independence and accountability.

· The scope of accountability is limited.

Principle 3 - Adequate power, resources and capacity.

X

Seriously insufficient budget. As the market develops, more revenue from fees can be expected.

Principle 4 - Clear and consistent regulatory process.

X

Principle 5 - Professional standards.

X

Code of ethics awaited, and introduction of a system of independent assessment may be considered.

Principle 6 - Use of Self‑Regulatory Organizations (SROs).

X

Principle 7 - Supervision of Self‑Regulatory Organizations (SROs).

X

No specific oversight program to supervise SROs has been established.

Principle 8 - Adequate inspection, investigation and surveillance powers.

X

· Inspection power over Reporting Companies and their major shareholders is not adequate.

Principle 9 -

X

Enforcement power on the basis of criminal legislation limited.

Principle 10 -

X

Limited power was well used. Faced with a severe resource constraint.

Principle 11 -

X

Principle 12 -

No specific MOU or other agreement / procedure has been established.

Principle 13 -

X

Lack of legal immunity of NSCG staff in handling sensitive information in good faith.

Principle 14 -

X

Sound rule but compliance needed (due to the lack of enforcement power of NSCG over Reporting Companies?)

Principle 15 -