Innovative Startups’ New Opportunities In Georgia
Innovation as Economy Driving
Innovation and technology are becoming increasingly important for economic growth in Georgia. The 2025 Law on Innovation and the Innovative Startup Acceleration Program create an environment where new companies can go from idea to international market much faster.
Obtaining the status of an innovative startup by the company
To obtain the status, a company must create an innovative product, implement an innovative process or service, and have received a significant investment or government grant in the last two years. Financial transparency and no tax arrears are required. The status is granted for one year, although it can be extended up to a maximum of 10 years if certain conditions are met.
Three-phase acceleration program
Program Includes Three Stage:
- Refining the idea and going-to-market strategy – developing a business model with the help of mentors.
- Product Optimization – minimal Viable Product (MVP) development and consumers’ feedback use .
- Global Growth – implementation of sales strategy and entry into international markets..
The Georgian Innovation and Technology Agency offers financial support to companies involved in the second and third phases – in the amount of 50,000 or 150,000 GEL.
Tax and other benefits
Innovative startups enjoy tax benefits: exemption from income tax in the initial years, and reduced rates on both salaries and profits in later stages. This allows the company to devote more resources to growth and development.
Innovative small and medium-sized company
Under Georgian legislation, the status of an innovative small and medium-sized company is granted in accordance with certain criteria, which aims to encourage innovative activities and promote research and development in the country.
1. What kind of enterprise can be granted the status of an innovative small and medium-sized company?
Only an entrepreneurial society that is registered under the Law of Georgia “On Entrepreneurs” and meets the conditions below can receive the status.
2. Basic Requirements
a) The company must have incurred research and development expenses during the previous financial year, which amount to:
- No less than 100,000 GEL;
- and constitutes at least 5% of the volume of revenues received in the same year.
In addition, the company must meet at least one of the following conditions:
- The company has a patent or a deposited computer program, and research and development expenses are directed to the development of a product, service or process created by the said patent or program;
- The company has incurred the mentioned costs for the purchase of research and development services from scientific and research institutions or companies with relevant status;
- The expenses are recorded in accordance with the Research and Development Expenditure Guidelines approved by the Government of Georgia and are aimed at creating or improving an innovative product, process or service.
b) At the time of granting the status, the company must not have any tax arrears, must not be registered in the debtors' register, must not have any insolvency proceedings pending against it, and must not be in the process of liquidation.
c) The company must belong to the following categories as defined by the Law of Georgia on Accounting, Reporting and Auditing:
- Third category enterprises or
- Fourth category enterprises.
3. Status validity period
The status of an innovative small and medium-sized company, if granted, is granted for life.
Strong ecosystem for success
Today, the innovation ecosystem in Georgia unites the state, universities, research centers, private investors, and mentors. This joint effort creates conditions where startups can quickly develop and compete in the global market.
Scientific/Technological Park
A scientific/technology park is a structural space that provides a favorable environment for various participants in the innovation ecosystem — including higher education institutions, scientific research organizations, and innovation entities.
The park's goal is to provide these entities with both infrastructural and professional services, allowing them to jointly develop and rapidly implement new technological solutions.
Basic Functions:
- Facilitating collaboration - The park creates a space where academic and research institutions, startups, and innovators collaborate and share experiences.
- Technological development - here, special attention is paid to the rapid introduction of new technologies, which helps encourage and strengthen innovative processes.
- Creation of new products and services - the park creates an environment where innovative ideas are born, transformed into products and brought to the market, which creates economic value and new jobs.
The Scientific/Technology Park is one of the main platforms that contributes to the development of the country's innovative and technological potential, connecting science and business, and supporting sustainable economic growth.
Conclusion
The development of innovative startups is increasingly becoming a key driver of economic growth in Georgia. A new legislative framework, a three-phase acceleration program, and tax incentives create an environment where startups are given the opportunity to grow rapidly and enter international markets.
The status of an innovative small and medium-sized company further strengthens the motivation for innovative activities, while the science and technology park promotes cooperation between academia, business, and the research sector.
This ecosystem creates a solid foundation for innovation and technologies in Georgia to achieve success of not only local but also global significance.
Authors: Svanidze Melano, Iashagyan Oksana
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